May 21, 2025 /SemiMedia/ — Silicon carbide chipmaker Wolfspeed is preparing to seek Chapter 11 bankruptcy protection, after failing to resolve its mounting debt burden, sources familiar with the matter said.

The move comes as the company faces continued weakness in automotive and industrial demand, alongside trade-related uncertainties. Wolfspeed had rejected multiple creditor proposals for out-of-court restructuring, but a formal filing is now expected with support from most lenders.

In early May, the company warned of going-concern risks and cut its fiscal 2026 revenue forecast to $850 million—well below analysts’ estimate of $958.7 million.

As one of the industry’s leading SiC device suppliers, Wolfspeed’s potential bankruptcy could disrupt supply chains across the EV and power electronics sectors. The company declined to comment.