Wolfspeed: Rejuvenated by restructuring?

After starting to address its colossal debt by converting loans into shares and filing for chapter 11 bankruptcy protection, has Wolfspeed taken the first steps to a revival? – By Richard Stevenson, Editor CS Magazine.

Wolfspeed, and in its former guise Cree, has been at the very forefront of our industry for decades. Building on its initial expertise in SiC, this spin-out of North Carolina State University that founded in the late 1980s has been a trailblazer of SiC substrates, along with high-brightness LEDs and power and RF electronics.

In recent times, driven by the vision of Wolfspeed’s former CEO, Gregg Lowe, the company has streamlined its business, first carving out its LED division and then selling its RF business to Macom in December 2023.

While these moves that have shifted the focus to SiC substrates, epiwafers and power devices make much sense, given that the current portfolio is aligned with an electric vehicle market that is sure to climb over the coming years, it’s not prevented Wolfspeed from finding itself trapped in a particularly ferocious perfect storm. Peril has resulted from borrowing big to try and fully exploit growth in softening SiC markets, while facing increasingly stiff competition from Chinese makers of SiC substrates that are slashing prices to win sales in a sector suffering from overcapacity.

Now Wolfspeed is trying to extricate itself from this precarious position by starting to convert billion-dollar cash injections from BorgWarner, ZF and Renesas into shares, filing for Chapter 11 bankruptcy protection in late June, and trimming its wage bill by laying of a 20 percent of its workforce.

But will this be enough? And even if Wolfspeed soldiers on, has it already been inflicted with irreparable damage?… Full article

Source: www.compoundsemiconductor.net