Wolfspeed is facing imminent bankruptcy due to fierce competition from Chinese manufacturers and weak demand in the industrial and automotive sectors. The company's debt stands at approximately $6.5 billion, with ongoing uncertainties surrounding tariffs further straining its financial state. Following failed negotiations with creditors and the rejection of out-of-court restructuring proposals, Wolfspeed plans to file for Chapter 11 bankruptcy. The silicon carbide chip manufacturer has lowered its 2026 revenue forecasts significantly amidst disappointing demand for electric vehicles and laid off 20% of its workforce. The market is heavily impacted by declining prices of silicon carbide wafers from competitors in China.
Wolfspeed is reportedly preparing to file for bankruptcy after struggling with $6.5 billion in debt amid competition from Chinese rivals and weak market demand.
Wolfspeed's ongoing financial distress culminated in plans to file for Chapter 11 bankruptcy as competition from China pressured their operations and revenue forecasts.
The company's efforts to revive its operations failed, notable layoffs, and plant closures resulted from dwindling demand for electric vehicles and competition.
Wolfspeed's silicon carbide chips are now facing price competition where rivals offer them at $500 each, drastically undercutting the former $1,500 price point.
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