Wolfspeed Shares Soar 91.48% on Debt Restructuring Plan

On July 1, 2025, Wolfspeed's shares surged by 91.48% in pre-market trading, driven by the company's announcement of seeking Chapter 11 protection as part of a bold debt restructuring plan.

Wolfspeed, a leader in silicon carbide (SiC) technology, has initiated a significant restructuring plan aimed at redefining its financial trajectory and competitive edge in the high-growth semiconductor sector. By reducing its total debt by 70%, or $4.6 billion, the company aims to shed a massive financial burden that has strained its balance sheet for years. This move is expected to free up liquidity, allowing the company to reinvest in growth and sustain operations during the restructuring process.

The restructuring plan has garnered support from key stakeholders, with over 97% of senior secured note holders and 67% of convertible debtholders backing the initiative. This broad confidence is crucial for minimizing disruptions and ensuring that operations continue as usual. The company expects to complete the restructuring process by the end of Q3 2025.

Wolfspeed's strategic positioning in the silicon carbide market is a key factor in its restructuring efforts. The company's 200mm fully automated SiC manufacturing line promises higher yields and lower costs compared to rivals still using older 150mm processes. With interest savings and reduced debt, Wolfspeed can now redirect capital toward scaling production and R&D, securing partnerships with automakers like BMW and Ford, which are ramping up EV production.

However, the restructuring process is not without risks. Delays, unexpected legal challenges, or a sudden drop in demand could destabilize the plan. Competitors like Infineon and STMicroelectronics are also expanding SiC capacity, intensifying competition. Wolfspeed's valuation hinges on its ability to convert market share into profitability, and investors will scrutinize post-restructuring earnings reports for signs of cost discipline and top-line momentum.