Wolfspeed Confirms Chapter 11 Plan, Issues 25.8M New Shares

Company Overview

Wolfspeed Inc (NYSE: WOLF) is an American developer and manufacturer of wide-bandgap semiconductor materials and devices. Formerly known as Cree, Inc., the company focuses on silicon carbide (SiC) and gallium nitride (GaN) technologies used in power electronics and radio-frequency applications. Wolfspeed supplies components for electric vehicles, fast-charging stations, renewable-energy inverters, and aerospace systems, operating from its U.S.-based silicon carbide corridor with end-to-end substrate and device fabrication.

Corporate Structure and Workforce

Wolfspeed is incorporated in Delaware following a planned conversion from North Carolina. As part of its Chapter 11 reorganization filed on June 30, 2025, the company plans to issue approximately 25,840,697 shares of new common stock under its confirmed Amended Plan of Reorganization, which was confirmed on September 8, 2025. Wolfspeed Texas LLC and other subsidiaries serve as guarantors on new secured notes due 2031. The company holds over 6,000 patents, which indicates its focus on innovation and expertise across materials science, device fabrication, and power-electronics design.

Silicon carbide by NIKHIL

Recent Developments

• June 30, 2025: Wolfspeed filed for Chapter 11 bankruptcy protection and proposed a joint prepackaged Plan of Reorganization.
• September 8, 2025: The U.S. Bankruptcy Court confirmed the Amended Plan, authorizing share cancellation, new‐stock issuance, and debt restructuring.
• September 26, 2025: Registration of securities was filed under SEC Form 8-A12B, reflecting the transition to a Delaware corporation and the issuance of new common stock.
• September 25–26, 2025: Amendments to Form T-3 were filed to qualify up to $831 million in Convertible Second Lien Senior Secured Notes due 2031 and $296 million in Second Lien Senior Secured PIK Toggle Notes due 2031.
• October 2024: A planned $3 billion European SiC plant was placed on hold; U.S. funding of up to $750 million was announced for North Carolina and Marcy, New York manufacturing facilities.
• April 2022: The Marcy, New York, 200 mm SiC fab commenced production as the world’s largest SiC fabrication site.
• October 2021: A strategic supplier agreement was signed with General Motors to provide SiC power devices for future EV programs.
• August 2025: Wolfspeed’s CTO, Elif Balkas, was recognized by PowerAmerica for her contributions to SiC and GaN commercialization.

Financial and Strategic Analysis

As of September 26, 2025, Wolfspeed shares traded at $1.57, down 15.14% on volume of approximately 5.5 million shares. Key metrics include:
• Market capitalization: $289 million
• Trailing revenue (TTM): $757.6 million; net loss: $1.61 billion; profit margin: –212%
• Price/Sales (TTM): 0.35; Enterprise Value/Revenue: 7.63
• Cash on hand: $1.06 billion; Levered free cash flow (TTM): –$2.13 billion
• Beta (5-year monthly): 1.31

The Chapter 11 process will result in the cancellation of existing common shares and the issuance of new equity alongside secured notes due 2031 (convertible notes and PIK toggle notes). This capital-raising strategy is aimed at stabilizing liquidity, reducing debt burdens, and aligning Wolfspeed’s balance sheet with anticipated growth in SiC demand. Risk factors include post-reorganization leverage and potential share dilution.

Market Position and Industry Context

Wolfspeed plays a significant role in the global market for SiC power solutions and GaN RF devices. Its technology aims to enhance efficiency and power density for EV drivetrains, renewable-energy converters, and 5G infrastructure. Despite production challenges in Europe, Wolfspeed’s U.S. manufacturing capacity, supported by state and federal incentives, is positioned to meet domestic demand. Competition from established silicon carbide foundries and emerging GaN specialists highlights the need for improvements in scale and cost efficiency. Partnerships with automotive OEMs, along with government funding initiatives, indicate sustained interest in wide-bandgap semiconductors.

tl;dr

On September 8, 2025, Wolfspeed’s Chapter 11 reorganization plan was confirmed, leading to share cancellation and the issuance of approximately 25.8 million new common shares. Concurrently, the company qualified up to $1.13 billion in second-lien secured notes due 2031. Shareholders may experience dilution, and Wolfspeed has elevated post-reorganization leverage. The stock trades at $1.57, reflecting market concerns over recovery prospects. The company's success is contingent on the effective implementation of its restructured capital plan, increasing U.S. SiC production, and leveraging partnerships in electric vehicle and renewable-energy markets.