Struggling US chipmaker Wolfspeed files for bankruptcy
Upon emergence from the process, it expects to have reduced its overall debt by about 70%, representing a reduction of USD 4.6 billion and a reduction of its annual total cash interest payments by approximately 60%.
Struggling US chipmaker Wolfspeed has filed for Chapter 11 bankruptcy protection as it tries to respond to mounting financial challenges including huge debt.
Upon emergence from the process, it expects to have reduced its overall debt by about 70%, representing a reduction of USD 4.6 billion and a reduction of its annual total cash interest payments by approximately 60%, the company said.
“By taking this proactive step, the Company expects to be better positioned to execute on its long-term growth strategy and accelerate its path to profitability,” Wolfspeed said in a media release. “Wolfspeed is continuing to operate as usual throughout the process, including delivering silicon carbide materials and devices to its customers and paying its vendors in the ordinary course.”
Wolfspeed earlier said it had reached a restructuring agreement with creditors and Renesas Electronics’ US subsidiary, which would result in USD 275 million in fresh financing, according to a Reuters report.
In March, outgoing executive chair Tom Warner warned that the company could lose out on USD 750 million in grants and USD 1 billion in tax credits expected from the US CHIPS and Science Act.
Headquartered in Durham, North Carolina, Wolfspeed offers silicon carbide and GaN solutions for high power and RF applications.
“We are continuing to move forward with our accelerated restructuring process to strengthen our capital structure and fuel our next phase of growth,” said Wolfspeed CEO Robert Feurle. “With a stronger financial foundation, Wolfspeed will be better positioned to move faster on our strategic priorities and maintain our position as a global leader in the silicon carbide market.”