Wolfspeed’s Restructuring Journey: A Critical Financial Crossroads

Wolfspeed finds itself navigating a complex Chapter 11 restructuring process, initiated on June 30, 2025, in one of the semiconductor sector’s most significant financial overhauls. The company’s latest quarterly results underscore the considerable challenges driving this strategic shift.

The fourth quarter of 2025 proved particularly difficult, with Wolfspeed reporting revenue of $197.0 million—representing a 1.8% decline that fell short of market expectations. The company’s non-GAAP loss per share reached $0.77, disappointing observers who had anticipated progress toward EBITDA break-even operations. Margin performance remained problematic, with gross margin deteriorating to negative -1%, while operating losses persisted at $94.0 million. A modest bright spot emerged in free cash flow, which showed improvement of 48.7%, though it remained deeply negative at -$454.0 million.

Leadership Reinvention Amid Financial Restructuring

The company’s restructuring strategy aims to achieve a substantial 70% reduction in debt, equivalent to $4.6 billion. This pre-packaged plan has already garnered support from over 97% of senior secured noteholders. If successful, the initiative would reduce annual interest payments by approximately 60%. Management anticipates emerging from Chapter 11 protection by the conclusion of the third quarter of 2025.

CEO Robert Feurle emphasized the strategic rationale behind these measures: “Establishing a stronger financial foundation positions us to advance our strategic priorities more rapidly.” The company maintains liquidity for its transformation with $1.3 billion in cash reserves, though existing equity holders will retain only 3-5% of the reorganized entity.

Executive Appointments Signal New Direction

July brought significant leadership changes as Wolfspeed fortified its executive team. Effective September 1, semiconductor veteran Gregor van Issum assumed the CFO role, bringing two decades of experience from NXP Semiconductors and ams-OSRAM AG. Van Issum identified his immediate priority as ensuring “transparency and clarity for investors throughout this transformation phase.”

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On August 5, Bret Zahn joined as Vice President and General Manager of the automotive business division. The former onsemi executive now shoulders responsibility for driving growth in the electric vehicle market—a critical challenge given current industry headwinds.

Divergent Performance Across Business Units

Segment performance revealed markedly different trajectories across Wolfspeed’s operations:
* Power Products generated $118.6 million in revenue
* Materials Products experienced an 18% contraction, falling to $78.4 million
* The Mohawk Valley Fab facility demonstrated strong progress, doubling its revenue to $94.1 million

Despite these varied results, manufacturing underutilization continues to present substantial profitability challenges. Fixed costs persistently exceed revenue contributions across operations, though moderate improvements have been noted.

Strategic Positioning in a Challenging Market

The broader semiconductor industry faces mounting pressures from softening electric vehicle demand and increasing competition from Chinese manufacturers. Wolfspeed’s strategic response centers on its 200mm silicon carbide technology, which management believes will drive long-term growth despite current market conditions.

The coming quarters will prove decisive for Wolfspeed’s future. The company has implemented comprehensive changes—financial restructuring, leadership renewal, and focused growth market strategies—but whether these measures will stabilize operations remains uncertain. Market observers await clear signs of whether these concerted efforts will successfully navigate the company through its current crisis.