Rumor: Wolfspeed Plans to File for Chapter 11 Bankruptcy Soon

Crisis at the Semiconductor Manufacturer Rumor: Wolfspeed Plans to File for Chapter 11 Bankruptcy Soon

2025-05-21 From Susanne Braun | Translated by AI 1 min Reading Time

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Journalists from the Wall Street Journal report that executives of semiconductor manufacturer Wolfspeed are preparing to file for Chapter 11 bankruptcy in the coming weeks. Shareholders reacted accordingly with panic; the stock dropped by 60 percent.

According to reports, Wolfspeed will file for Chapter 11 bankruptcy.(Image: Wolfspeed) — According to reports, Wolfspeed will file for Chapter 11 bankruptcy.
(Image: Wolfspeed)

Supported by the majority of creditors, the American semiconductor manufacturer Wolfspeed is expected to file for Chapter 11 bankruptcy in the coming weeks, report journalists Alicia McElhaney and Alexander Gladstone of the Wall Street Journal (behind a paywall). Following this report, which has not yet been officially confirmed, Wolfspeed's stock fell by 60 percent after hours.

According to the report, Wolfspeed has been struggling with debt for some time due to sluggish demand in the industrial and automotive markets. Uncertainties also exist due to unclear tariff policies of the US government. Several out-of-court restructuring proposals from creditors are said to have been rejected in the past, prompting the company to seek a Chapter 11 bankruptcy filing soon.

Maintain Operability

A Chapter 11 bankruptcy filing means a company is seeking legal protection to restructure its debts and reorganize its finances. Instead of a liquidation, where the company sells its assets to pay creditors, Chapter 11 allows the company to continue operating while it tries to meet its debt obligations.

On May 9, 2025, Wolfspeed's leadership appointed Paul Walsh and Mark Jensen to the board. Both serve on the audit committee and use their expertise in finance and restructuring to help resolve the company's debt issues.

If the reports are correct, the Chapter 11 bankruptcy proceedings would likely be the final confirmation that the plans for the power semiconductor factory, which was supposed to be established in Saarland in cooperation with ZF Friedrichshafen, have been abandoned. This was already speculated in October 2024. (sb)

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