💥New Chapter 11 Bankruptcy Filing - Wolfspeed, Inc. ($WOLF)💥
CHIPS Act couldn't save this sucker.
On June 30, 2025, Durham, NC-based Wolfspeed, Inc. ($WOLF) and venue-creating shamco Wolfspeed Texas LLC (collectively, the “debtors” and together with their non-debtor affiliates, the “company”) filed prepackaged chapter 11 cases in Ray Schrock’s locale of choice, the Southern District of Texas (Judge Lopez).* The company develops and manufactures silicon carbide (“SiC”) products useful as wide-bandgap semiconductors, which are “… targeted for various applications such as electric vehicles, fast charging and renewable energy and storage” and “ … military communications, radar, satellite and telecommunication[s] …” And solar too, of f*cking course.
Anyway, the company operates its biz through two primary segments: materials and power devices, depicted below.
Materials products are used by customers (e.g., governments and universities) to research, develop, and make products for radio-frequency and power applications, while various customers and distributors purchase power device offerings for “… applications in electric vehicles, including charging infrastructure, server power supplies, solar inverters, uninterruptible power supplies, industrial power supplies, and other applications.” Yes, that stellar drafting reads “applications … including other applications.”
We’d be remiss if we didn’t point out that, formerly known as Cree, Inc., the company went …
… on a “future”-oriented pivot (again, EVs, solar, 5G — all of the hot sh*t that traded at crazy multiples mid-pandemic), transforming itself from an LED manufacturer to a SiC manufacturer in ‘21.** What does “all in” mean? In this case, it means an absolute ton of capex in just the last several years building out a bunch of facilities. The company manufactures “[m]ost” of its products at its facilities in (i) Durham, NC, (ii) Siler City, NC (the “Siler City Facility”), (iii) Marcy, NY (the “Mohawk Valley Fab”), and (iv) Fayetteville, AR.***
Over the past few years, revenue looks like this:
But notwithstanding those respectable figures, the rest of the company’s financials are a mess – in large part due to underutilization at its facilities. Simply put, the company lights cash on 🔥, posting net losses in FYs ‘24,**** ‘23, and ‘22 of $864.2mm, $329.9mm, and $200.9mm, respectively. To put those 👆numbers in perspective, according to the company’s own projections (Slide 54, albeit from ‘22), it was supposed to top $1b in revenue for the first time (and stay there – important to break even against adjusted EBITDA) in FY’23. The last year has been particularly bad: YOY growth is negative in each of the last four quarters.
That performance is particularly daunting when considered against the company’s formidable petition-date debt stack:
The company issued the first $750mm of those senior secured notes back in October ‘24 in connection with its signing of a “… non-binding preliminary memorandum of terms (‘PMT’) …” with the U.S. Department of Commerce for another $750mm in direct funding under the Biden-era CHIPS and Science Act (the “CHIPS Act”). But non-binding means just that, and to move toward actual PMT funding, the company was first required to (i) refinance or restructure its ~$3.1b in existing convertible notes, (ii) defer $120mm in cash interest payments to Renesas Electronics America Inc., a wholly-owned U.S. subsidiary of Japanese semiconductor co. Renesas Electronics Corporation ($6723.T) (“Renesas”), under a $2b customer refundable deposit agreement, (iii) raise $300mm in new equity capital, and (iv) complete “… operational and capital expenditure milestones of the Siler City Facility and the Mohawk Valley Fab.”***** That, however, would take time, and there was some sort of major event happening in November ‘24, right?
