Wolfspeed stock faced significant selling pressure in Thursday morning trading, as investors reacted to fresh operational challenges at the semiconductor manufacturer. The issues emerge just months after the company completed a major financial restructuring, casting doubt on its near-term production targets.
Operational Scaling Issues Trigger Sell-Off
The company’s shares declined by approximately 7.2 percent to $21.20 by 06:07 ET. This drop was precipitated by reports detailing persistent manufacturing delays involving its crucial 200mm silicon carbide (SiC) technology platform.
Wolfspeed had aggressively pivoted its focus to this new 200mm platform to drive efficiency gains. However, recent data indicates that the production ramp-up at its Mohawk Valley and Siler City facilities is encountering yield challenges. These operational bottlenecks now threaten to impact revenue guidance for the third fiscal quarter.
Compounding the difficulty is the transition away from older 150mm wafers. The phase-out of this technology, coinciding with the closure of the Durham fabrication plant, is proving more complex than initially anticipated.
Financial Cushion Contrasts with Core Business Struggles
The market’s negative reaction is particularly notable given Wolfspeed’s recently strengthened balance sheet. In early December, the company received a substantial $698.6 million tax refund from the U.S. Internal Revenue Service (IRS) under the CHIPS and Science Act.
This capital infusion boosted cash reserves to roughly $1.5 billion, providing a critical buffer following the company’s exit from Chapter 11 bankruptcy proceedings on September 29, 2025.
Key Financial Metrics:
* Cash Position: ~$1.5 billion (post-tax refund)
* Debt Reduction: Approximately 70% achieved during restructuring
* Debt Maturities: Extended to 2030
Should investors sell immediately? Or is it worth buying Wolfspeed?
Despite this stabilized financial foundation, Thursday’s sell-off signals that the market is now demanding clear evidence of operational execution. While the safety net is in place, confidence in the core business of high-quality SiC chip manufacturing remains under scrutiny.
Post-Bankruptcy Execution in Focus
Wolfspeed had filed for Chapter 11 bankruptcy protection on June 30, 2025, driven by an unsustainable debt load and slower-than-expected adoption of electric vehicles.
The restructuring process moved swiftly. The company emerged with a cleaned-up capital structure by September 29, 2025. Although the process erased a significant portion of equity, it preserved the ongoing operations.
The semiconductor industry, however, offers little patience for production setbacks. Competitors in the SiC space have narrowed the gap, and Wolfspeed’s heavy reliance on the automotive sector—a notoriously volatile market—adds to the pressure. The shutdown of the 150mm Durham facility has dramatically increased the operational burden on the new 200mm plants to deliver.
A Pivotal Quarter Ahead
Investor attention is now firmly fixed on upcoming production metrics and the next quarterly earnings report. From a technical perspective, the stock must defend the psychologically significant $20 level to avoid a retest of its post-bankruptcy lows.
The $700 million refund ensures operational runway into 2026. Yet without a resolution to the manufacturing yield problems, the financial restructuring may have only purchased time, rather than securing a sustainable future.
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