Dive Brief:
- Wolfspeed said it has received $698.6 million in cash tax refunds from the Internal Revenue Service through a provision of the CHIPS and Science Act, strengthening its cash position after filing for bankruptcy earlier this year.
- Wolfspeed is expecting about $1 billion in total from the CHIPS Act provision, which would accelerate its transition from 150-millimeter to 200-millimeter wafer technology. The company sought the 25% tax rebate after spending billions of dollars on a materials plant in Chatham County, North Carolina, and its Mohawk Valley fab in Utica, New York.
- The North Carolina-based semiconductor company now has a cash balance of $1.5 billion following receipt of funds from the Advanced Manufacturing Investment Credit under Section 48D of the Internal Revenue Code, according to an investor filing on Monday.
Dive Insight:
The refund comes months after Wolfspeed exited Chapter 11 bankruptcy in late September, a move that was related to weak demand and financial struggles. The semiconductor manufacturer received approval to cut its total debt by 70% and lower its annual cash interest payments by 60% as part of its restructuring plan. The company ended its latest quarter with $926 million in cash and investments, prior to the tax refund.
“This substantial cash infusion further strengthens our liquidity position at a critical phase in Wolfspeed’s strategic evolution,” CFO Gregor Van Issum said in a statement Monday. “It provides us with the financial agility to support long-term growth, manage our capital structure responsibly, and continue driving innovation across the silicon carbide value chain for our customers.”
As part of its lender agreement, Wolfspeed said it plans to allocate $192.2 million of the refund to paying down $175 million of debt, with the remaining funds for “general corporate purposes.”
Wolfspeed has been focused on ramping production of its 200mm silicon carbide products in Chatham County. In addition to supporting its electric vehicle customers, the company said it wants to reach growing markets, such as artificial intelligence data centers, aerospace, defense, industrial and energy.
Wolfspeed is also winding down its 150mm wafer production. It has been taking last-time buy orders from customers with plans to officially close its Durham, North Carolina, factory by the end of the calendar year, Issum said in an earnings call Oct. 29. Wolfspeed previously shared plans to shutter the plant over a year ago.
The company generated revenue of $196.8 million in its fiscal first quarter that ended Sept. 30, up 1% from last year. Roughly half of that total came from its 200mm Mohawk Valley fab in Marcy, New York. Wolfspeed also posted a net loss of $643.6 million during the period, largely due to one-time costs related to its Chapter 11 bankruptcy.
Looking ahead, Issum said the company is seeing a “meaningful shift” across its key markets and developing a new sustainable, long-term plan for the future while experiencing near-term soft demand. He added that Wolfspeed will provide more details on its plan in the first half of 2026.
