Struggling EV semiconductor company files for bankruptcy
Struggling EV semiconductor company files for bankruptcy originally appeared on TheStreet.
It's safe to say it has been a wild, bumpy stretch for clean energy stocks.
Sure, it was always a volatile space, but it's alarming to see them fall like a house of cards.
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Over the past few weeks, we've seen solar stocks drop like flies, and now one of the more promising EV tech stocks might be joining that bankruptcy list.
The EV sector has been under duress for a while, and now a once-hyped chip stock in recent years is wrapping its brutal fall with a full-on bankruptcy move.
Wolfspeed WOLF was one of the rising stars in the EV chip niche.
It rode the hype train on silicon-carbide chips, which were touted as much quicker and more efficient than old-school silicon. EV makers and clean-energy players were all in, and investors bought the story.
On paper, Wolfspeed's plan was mostly clear and compelling. Build huge U.S. fabs, maintain end-to-end control of the supply chain, and rake in big margins.It even branched into gallium-nitride (GaN) RF chips, targeting data centers and 5G towers, in spreading the risk. Layer onto that big money from private backers and CHIPS Act cash, and Wolfspeed was sure to be the next-gen backbone of clean-tech hardware.
At first, Wolfspeed set its sights on Europe, particularly Germany, the auto capital. It looked to capitalize on Europe's EV scene and figured a Saarland fab would tap both EU and U.S. Chips Act cash.
Up until mid-2024, Wolfspeed had massive plans for its $3 billion silicon carbide fab in Saarland, Germany. However, by June, chip demand cooled off fast, forcing the EV chipmaker to hit pause.
That pushback spooked the market, casting serious doubts over Europe's subsidy game and whether Wolfspeed had overcommitted.
By October, things got even worse.
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Auto-parts giant ZF bailed on their joint venture, which left Wolfspeed to shelve the Saarland project. It did score a $1.5 billion lifeline, though, 50% of which came from the CHIPS Act, and the rest coming from Apollo investors.
Fast forward to early 2025, and it's utter chaos.
The stock has lost almost the entirety of its value on a year-to-date basis, and its management admits that the cash runway is thinning.
It all culminated in May 20's bombshell going-concern warning with $6.5 billion in debt, shattering its investors.
Wolfspeed stock nosedived after announcing plans to file for bankruptcy as part of a restructuring deal with creditors.
The transactions are set to reduce its debt load by 70% (a $4.6 billion reduction), lowering its annualized interest payments by 60%.
It locked in a restructuring deal with creditors and Renesas' U.S. arm, securing $275 million in new financing. The goal is to crawl out of bankruptcy by Q3 this year.Wolfspeed CEO Robert Feurle said, 'After evaluating potential options to strengthen our balance sheet and right-size our capital structure, we have decided to take this strategic step because we believe it will put Wolfspeed in the best position possible for the future.'
Also, the company is sitting on $1.3 billion in cash, which it suggests should be enough to stave off any near-term liquidity troubles.
Shockingly, Wolfspeed stock is down more than 30% in regular trading to just 63 cents. In the past month, it has lost 71% of its value, and over 30% in the past week.Struggling EV semiconductor company files for bankruptcy first appeared on TheStreet on Jun 23, 2025
This story was originally reported by TheStreet on Jun 23, 2025, where it first appeared.
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