Wolfspeed shed 70% of its debt in Chapter 11 and kept its silicon carbide lead

Wolfspeed, the silicon carbide chipmaker born as Cree, spent years and billions building two greenfield 200mm factories in the United States. By 2025 production delays, Chinese competition and weak EV demand left it with debt it could not service, and it filed for Chapter 11 in June 2025.

The expedited three-month restructuring cut total debt by about 70%, extended maturities to 2030 and lowered annual cash interest by roughly 60%. Creditors took equity, and Wolfspeed emerged as a recapitalized company rather than one that had to sell its plants.

CEO Robert Feurle framed the exit as the start of a new era: the big capital outlay was behind it, the 200mm capacity was installed and vertically integrated, and with a self-funded plan it could pursue artificial intelligence, electric-vehicle and industrial demand.

Emergence cut total debt by ~70% and annual cash interest ~60%, leaving a self-funded 200mm silicon carbide footprint positioned for AI, EV and industrial demand.

The reorganization removed the debt that was strangling a business whose factories were already built and paid for.

Keeping the 200mm footprint meant Wolfspeed did not have to give up the scale lead it had invested years and billions to create.

A self-funded plan let the company sell into fast-growing AI, EV and energy markets instead of turning its cash over to interest.

When the thing choking you is the balance sheet, the fastest route to keep your technical lead is to fix the capital structure first and keep the factory footprint you already paid for.

Wolfspeed emerged from Chapter 11 in September 2025 with a materially lighter balance sheet and extended maturities, and the market rewarded the quick exit, sending shares sharply higher. The case shows a heavily invested, strategically valuable business can survive a balance-sheet failure if the restructuring fixes the debt rather than cutting up the division.