News Summary
Wolfspeed Semiconductor is on the verge of filing for Chapter 11 bankruptcy as its stock price plummets 66%. With a debt of $6.4 billion and layoffs of approximately 1,250 workers, the company struggles under financial pressure and regulatory scrutiny over a withheld $750 million CHIPS grant. As it prepares for a prepackaged bankruptcy, Wolfspeed seeks to restructure its debts while diversifying into new business areas like data centers and solar farms.
Wolfspeed in Durham Faces Imminent Bankruptcy as Financial Struggles Mount
Durham—Wolfspeed Semiconductor, a major player in the silicon carbide manufacturing industry, is on the brink of filing for Chapter 11 bankruptcy, according to multiple sources familiar with the matter. The company’s stock price has plummeted by approximately 66% following reports that it is preparing a bankruptcy filing within the upcoming weeks. This development marks a significant turning point in the company’s financial trajectory, which has been strained by declining demand and substantial debt.
Key Financial and Restructuring Details
Wolfspeed, formerly known as Cree, is reportedly planning to pursue a “prepackaged” bankruptcy, a process where a restructuring plan is agreed upon with creditors before the formal filing, allowing for a faster and more streamlined process. The company’s total debt load is roughly $6.4 billion, mostly accumulated due to expenses related to manufacturing expansions in New York and Chatham County, North Carolina.
The company has rejected recent offers from creditors aimed at restructuring part of its debt, seeking what it describes as a more comprehensive solution. The ongoing negotiations involve various investment firms, with Apollo Global Management leading efforts to negotiate a restructuring plan. Under Chapter 11, Apollo is expected to be prioritized for repayment, as part of the normal debt resolution process.
The U.S. government, under the Biden administration, has delayed releasing a $750 million CHIPS grant until Wolfspeed addresses its debt obligations scheduled for 2026, indicating heightened scrutiny over the company’s financial commitments.
Operational Impact and Layoffs
Wolfspeed has taken significant steps to reduce costs amid its financial problems. The company has cut approximately 25% of its workforce since last summer, resulting in the loss of about 1,250 jobs. These layoffs come alongside other cost-cutting measures such as attrition and buyouts. The company originally employed around 5,000 workers before the downsizing.
In addition, Wolfspeed is closing a device manufacturing plant in Durham. This move is part of a broader strategic shift aimed at launching a new facility in Chatham County. The transition is part of the company’s efforts to streamline operations as it navigates its financial difficulties.
Recent Business Developments and Industry Position
In 2022, Wolfspeed opened a new silicon carbide chip fabrication plant in New York, making it a prominent name in the electric vehicle technology supply chain. Despite this, the company’s financial health has suffered due to modest demand for electric vehicles, which are key customers for silicon carbide products. Additionally, delays at the New York manufacturing facility have further hampered revenue growth.
Wolfspeed’s stock has seen a dramatic decline from a peak of approximately $140 in late 2021 to just above $1 today, reflecting investors’ waning confidence in its future prospects.
Newly appointed CEO Robert Feurle, who began his tenure in May 2025, aims to diversify Wolfspeed’s business lines into new industries such as data centers supporting artificial intelligence and large-scale solar farms. This strategic shift is intended to increase product demand and stabilize the company’s revenue streams amid current difficulties.
Background and Industry Context
Wolfspeed, formerly known as Cree, pivoted toward manufacturing silicon carbide, which is crucial for electric vehicle technology and other high-power applications. Its focus on this advanced material positioned it as a key supplier in the clean energy transition. However, the company’s growth has been hindered by delays at its manufacturing facilities and slower-than-expected demand for electric vehicles, the primary market for silicon carbide components.
The ongoing financial struggles have also prompted tensions among investment firms involved in Wolfspeed’s restructuring negotiations. While Apollo Global Management leads the negotiations, some creditors are pushing for different terms, highlighting disagreements as the company moves toward potential bankruptcy.
Summary of Key Facts
- Wolfspeed is preparing to file for Chapter 11 bankruptcy in the coming weeks.
- Its stock price dropped by 66% following news of the potential bankruptcy.
- The company has a total debt of approximately $6.4 billion, largely from manufacturing expansions in New York and North Carolina.
- Wolfspeed rejected recent offers to reduce its debt and is seeking a more comprehensive solution.
- The Biden administration has withheld a $750 million CHIPS grant until Wolfspeed addresses its 2026 debt obligations.
- The company has reduced its workforce by about 25%, or roughly 1,250 jobs, since last summer.
- Wolfspeed is closing a Durham factory to reopen a new facility in Chatham County.
- In 2022, Wolfspeed opened a new silicon carbide manufacturing plant in New York.
- The company’s stock peaked at around $140 in late 2021 but now trades just above $1.
- New CEO Robert Feurle aims to diversify into data centers and solar farms to boost product demand.
- There are tensions among creditors, with Apollo Global Management leading negotiations for debt restructuring.
Frequently Asked Questions
Q: What is Wolfspeed preparing to do? The company is reportedly preparing to file for Chapter 11 bankruptcy in the coming weeks.
Q: How much debt does Wolfspeed have? The company has a total debt load of $6.4 billion.
Q: What happened to Wolfspeed’s stock price? The stock dropped by approximately 66% following reports of bankruptcy preparations, declining from a peak of around $140 in late 2021 to just above $1.
Q: What are the recent operational changes at Wolfspeed? The company has cut about 1,250 jobs (roughly 25%) since last summer and is closing a plant in Durham to open a new facility in Chatham County.
Q: What is the status of the government grant? The $750 million CHIPS grant has been withheld until Wolfspeed addresses its debt obligations scheduled for 2026.
Q: Who is leading the restructuring negotiations? Apollo Global Management is leading efforts for debt restructuring and negotiations.
Q: What is Wolfspeed’s recent strategic focus? Under new CEO Robert Feurle, Wolfspeed is trying to diversify into industries such as data centers for artificial intelligence and solar farms.
Deeper Dive: News & Info About This Topic
HERE Resources
Wolfspeed Emerges from Bankruptcy with Major Restructuring
Wolfspeed Emerges from Bankruptcy After Successful Restructuring
Wolfspeed Completes Bankruptcy Restructuring with Debt Relief
Additional Resources
- Axios: Wolfspeed Close to Filing for Bankruptcy
- News Observer: Wolfspeed in Financial Trouble
- News Observer: Business Developments in the Area
- Wikipedia: Wolfspeed
- Baker Donelson: Corporate Restructuring News
Author: STAFF HERE RALEIGH WRITER
RALEIGH STAFF WRITER The RALEIGH STAFF WRITER represents the experienced team at HERERaleigh.com, your go-to source for actionable local news and information in Raleigh, Wake County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the North Carolina State Fair, Raleigh Arts Festival, and the Hopscotch Music Festival. Our coverage extends to key organizations like the Greater Raleigh Chamber of Commerce and Visit Raleigh, plus leading businesses in technology and education that power the local economy such as Red Hat and NC State University. As part of the broader HERE network, including HEREAsheville.com, HERECharlotte.com, HEREGreensboro.com, and HEREOBX.com, we provide comprehensive, credible insights into North Carolina's dynamic landscape.
