Durham chipmaker Wolfspeed plunges following Chapter 11 bankruptcy report
Shares of the Durham semiconductor supplier Wolfspeed sunk 66% late Tuesday following a report that the major Triangle employer is preparing to file for bankruptcy.
Citing sources familiar with the matter, The Wall Street Journal wrote Wolfspeed is moving within weeks toward Chapter 11, a common bankruptcy that lets distressed companies continue operating as their businesses, debts and assets are reorganized. The sources called it a “prepackaged” bankruptcy, meaning Wolfspeed would file a plan the company agreed upon with its creditors.
Wolfspeed has rejected recent offers to restructure part of its looming debt obligations — the first of which comes due in 2026 — instead choosing to hold out for what it has told The News & Observer is a more “comprehensive solution.”
“Optimizing our capital structure has been a stated priority for Wolfspeed, and we have been engaged in constructive discussions with our financial stakeholders to explore potential paths to support our long-term success,” Wolfspeed head of investor relations Tyler Gronbach said in an email Tuesday. “Our earnings announcement also indicated that, to achieve our stated goal of strengthening our balance sheet, we are evaluating a number of potential alternatives and may implement a transaction through an in-court solution.”
Wolfspeed’s stock, which peaked in late 2021 at around $140, hovered just above $1 on Wednesday.
The company entered last summer employing roughly 5,000 workers worldwide, with most based in the North Carolina Triangle. Since then, it has reduced its headcount by around 25% through mass layoffs, buyouts and attrition. Wolfspeed is also in the process of closing a device factory in Durham as it gets ready to open a massive new facility in Chatham County.
In November, Wolfspeed fired CEO Gregg Lowe, and chief financial officer Neill Reynolds will leave at the end of this month.
Wolfspeed plans in Chatham and Durham
Originally named Cree, the 38-year-old manufacturer took on significant debt in recent years as it shifted from making LED lights toward exclusively producing a unique semiconductor called silicon carbide that powers electric vehicles and has other applications. In 2022, Wolfspeed opened a new silicon carbide chip fabrication plant in New York and has built a substantial materials facility in western Chatham County, near Siler City, which it hopes to launch this summer.
“We will begin significantly ramping production at the (Siler City plant) as market conditions improve,” Wolfspeed board chairman Thomas Werner said during an earnings call this month.
Wolfspeed had initially committed to hire 1,800 workers at the Chatham plant near Siler City. But modest electric vehicles demand and delays at its New York site contributed to its current financial crunch. The company has also not received any money through a $750 million CHIPS grant it was awarded in October. The Biden administration required Wolfspeed to address its 2026 debt before it would issue any CHIPS dollars, and the Trump administration has not advanced the federal program designed to bolster domestic semiconductor production.
Under U.S. bankruptcy law, debt holders will be paid back before shareholders, who could lose their equity.
Even among the debt holders, there is an order to who would be paid back first under a bankruptcy. This has caused tension among investment firms as they wrangle over Wolfspeed as an asset. Some junior debt holders have pushed for Wolfspeed to restructure its 2026 debt and stave off bankruptcy.
Investment firm Apollo Global Management, which has led restructuring negotiations in recent weeks, is positioned to be paid back first under a Chapter 11.
This story was originally published May 21, 2025 at 9:55 AM with the headline "Durham chipmaker Wolfspeed plunges following Chapter 11 bankruptcy report."
