Three months after filing for Chapter 11 protection, the North Carolina semiconductor supplier Wolfspeed is out of bankruptcy.
“Wolfspeed has emerged from its expedited restructuring process, marking the beginning of a new era,” CEO Robert Feurle announced in a statement Monday. “Which we are entering with new energy and a renewed commitment to the growth mindset and entrepreneurial spirit that have powered Wolfspeed since its inception.”
Through restructuring, the Durham chipmaker eliminated nearly 70% of its debt, representing billions of dollars, and pushed its earliest loan repayment date to 2030. Wolfspeed creditors, including the semiconductor manufacturer Renesas and the investment firm Apollo Global Management, had their debt holdings converted to equity, with previous shareholders receiving a 3-5% fraction of the new company’s stock.
On Monday, Wolfspeed canceled its old shares and issued new ones under the same stock ticker, WOLF, at an exchange ratio of 0.0084. Some online stock platforms showed Wolfspeed stock rising upwards of 1,700% before trading was temporarily halted midday due to volatility, though these websites appear not to have calculated that the restructured Wolfspeed (trading under the same ticker) had significantly reduced its number of shares, the financial advice outlet The Motley Fool reports.
The company also reincorporated in Delaware on Monday, a move it says won’t impact its North Carolina operations. The same day, Wolfspeed introduced five new board directors and the departure of seven. Anthony Abate, the chairman of GTT Communications, will replace Tom Werner as Wolfspeed board chair.
Wolfspeed bets on 200-millimeter
Founded in 1987 under the name Cree, Wolfspeed manufactures a unique semiconductor material called silicon carbide, which is used in electric vehicles, fast-charging stations, and renewable energy storage units. The company also has a lineup of power devices. As Wolfspeed divested from its legacy lighting divisions, it took on large amounts of debt in recent years to fund two silicon carbide factories, including a massive materials plant near Siler City in western Chatham County where Wolfspeed promised to employ more than 1,800 workers.
Yet production delays at its New York State factory, coupled with increased Chinese chip competition and flagging electric vehicle demand, caused Wolfspeed’s stock to spiral beginning last year. The company ended this past March with $1.3 billion in cash but also faced mounting debt obligations over the next several years, including a $575 million payment due date in 2026. Wolfspeed rejected offers this year to restructure part of its debt, opting instead for a broader solution.
On June 30, the company filed under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas, one of the nation’s most used bankruptcy courts. At the time, Wolfspeed had approximately 3,400 total employees, down from more than 5,000 the previous year. Its “prepackaged” restructuring plan was supported by enough creditors to help it move through bankruptcy court within the anticipated three-month window.
With Monday’s announcement, Wolfspeed struck an optimistic tone about its ability to supply silicon carbide both now and into the future. It completed its Siler City factory in June and earlier this month unveiled its commercial 200-millimeter silicon carbide products, which are 25% larger than the existing industry standard.