NC chipmaker Wolfspeed says bankruptcy is possible as it faces looming debt
Executives of the struggling Durham semiconductor firm Wolfspeed said they are exploring “in-court or out-of-court options” to address the company’s approaching debt obligations.
“We remained actively engaged with our lenders addressing our capital structure,” board chairman Tom Werner said during a first-quarter earnings call Thursday.
Wolfspeed owes creditors $575 million in convertible debt on May 1, 2026 — with more money due in 2028, 2029, and 2030. The company ended March with $1.3 billion in cash, and Werner said Wolfspeed has the liquidity to operate in the short term.
Werner discussed Wolfspeed’s aggressive cost cutting, including shrinking its 5,000-person workforce by a quarter since last year through buyouts and mass layoffs. As a further step, he announced Wolfspeed would cut 30% of its senior leadership team. The chipmaker is also shutting its 150-millimeter device factory in Durham.
“We’ve engaged external experts to continue to identify additional cost-saving measures beyond those already underway,” Werner said.
Whether this will be enough to stave off bankruptcy remains unclear. The looming debt issue appears to have scared analysts, several of whom downgraded the company Friday. The investment firm William Blair even suspended its coverage of Wolfspeed, noting bankruptcy and Wolfspeed’s ability to restructure its debt as risks.
Wolfspeed stock fell 26% Friday after it forecast lower-than-expected revenue for next year — $850 million against analysts’ expectations of more than $950 million. The selloff may also have been prompted by the company publishing financial information it had previously provided to debt holders, which signaled the failure of one potential restructuring deal.
‘We will likely need a comprehensive solution’
Wolfspeed has issued more than $3 billion in convertible bonds in recent years to fund its transformation from traditional LED lighting operations toward exclusively manufacturing a unique type of semiconductor called silicon carbide. This material is used in electric vehicles, power systems, defense equipment and other applications.
In 2022, the company opened a new chip fabrication facility in New York State’s Mohawk Valley and a massive silicon carbide materials plant near Siler City in western Chatham County, which Wolfspeed expects to open this summer.
Wolfspeed began last summer with more than 5,000 employees worldwide, financial records show. Most were based in North Carolina, where the company was Durham County’s fifth-largest employer. Over the past six months, the chipmaker has also shaken up its executive team; Thursday’s earnings call was the first attended by new CEO Robert Feurle and the last one for outgoing chief financial officer Neill Reynolds.
“One thing is abundantly clear,” Feurle said. “Wolfspeed is a company with enormous potential underpinned by strong foundational elements already in place.”
The company did not take analysts’ questions during the earnings call.
While some creditors have offered the company a deal to restructure its debt obligations, Wolfspeed leaders indicate that they want a broader answer as they contemplate “a strategic in-court transaction.”
In an email Friday, Wolfspeed head of investor relations Tyler Gronbach said the “in-court” language conveyed the company’s belief that it “will likely need a comprehensive solution to strengthen our balance sheet over the next 12 months.”
This story was originally published May 9, 2025 at 5:10 PM.
