The new CEO at Wolfspeed is facing a cash crisis at the silicon carbide firm following the scaling back of the US CHIPS Act and automotive tariffs under the Trump administration
The company, which makes SIC power chips for electric vehicles, has been hit by the downturn in automotive and the prospect of tariffs and is looking at Chapter 11 protection from creditors as it turns to supplying AI datacentre power supplies for growth.
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“As part of our lender negotiations, we may elect to pursue either in court or out of court options,” said Robert Feurle, who took over as CEO two weeks ago. This comes as asset management firm Apollo Global Management has reportedly appointed investment bank Moelis to manage its $1.5bn debt in the company.
“We remain actively engaged with our lenders addressing our capital structure and we continue to maintain a constructive dialogue with the Trump administration in the CHIPS program office regarding federal funding,” said Feurle. “Related to improving financial performance, we’ve engaged external experts to continue to identify additional cost saving measures beyond those already underway.”
Feurle took over as CEO in May 1st after Gregg Lowe was sacked in December last year. The company has a cash pile of $1.3bn but has $6.5bn of debt a burn rate of $800m a year and additional costs of up to $450m as it closes two older sites in Texas and North Carolina to focus on its 200mm megafab at Mohawk Valley, New York.
Mohawk Valley is ramping up but only delivered $78m of revenue this quarter, up form $28m this quarter last year.
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“The Farmers Branch 150mm epitaxy facility was closed in December and is being prepared for sale,” said Feurle. “The closure of the Durham 150mm wafer fab remains on track to close at the end of calendar 2025. The non factory workforce reductions along with the factory closures are now contributing to approximately 25% reduction in total company employment and remains on track with most of the reductions already completed at the end of fiscal 3Q.”
Wolfspeed has also brought on two board members with expertise in restructuring. Paul Walsh most recently served as Chief Financial Officer and Senior Vice President, Finance and Administration of Allegro Microsystems and sits on the boards of Kopin and Semtech. Mark Jensen was US Managing Partner for Technology Industry at management consultant Deloitte and sits on the board of Lattice Semiconductor.
“They both bring invaluable industry experience and deep expertise in accounting, finance and restructuring. Their backgrounds position them well to help the Board and Company navigate ongoing discussions with lenders and reach a comprehensive solution to address our balance sheet. We continue to make meaningful progress in these negotiations and we believe guidance from both Paul and Mark will be critical to our efforts in reaching an outcome that will support our long-term success,” said Tom Werner, Chairman of the Board at Wolfspeed.
Feurle is also cutting the senior management team by a third, while looking to recruit a Chief Operating Officer. Cengiz Balkas, the former CEO of Intrinsic Semiconductor acquired by Cree in 2006, will now lead Materials and Power Business Operations as the Chief Business Officer rather than general manager.
Angelo Kensian, who previously led the Wolfspeed EMEA sales team, will be the new global head of Sales and Marketing to drive business in AI datacentres, energy storage, EVs and aerospace and defence. “These are highly specialized markets where quality, reliability, efficiency matters most. In these environments, Wolfspeed’s fully automated 200 mm manufacturing platform sets us apart. That’s where our focus needs to be,” said Feurle.
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