News: Microelectronics
23 June 2025
Renesas expects $1.7bn loss in first-half 2025 from Wolfspeed restructuring
Renesas Electronics Corp of Tokyo, Japan says that, as a resuts of entering into a restructuring support agreement with Wolfspeed Inc of Durham, NC, USA and its principal creditors for the financial restructuring of Wolfspeed, it hence expects to record a financial loss.
As announced in July 2023, Renesas entered into the silicon carbide (SiC) wafer supply agreement with Wolfspeed and, through its US subsidiary, it provided a deposit of $2bn (about ¥292bn) to Wolfspeed. In October 2024, the firms amended their agreement and increased the deposit to $2.062bn (about ¥301.1bn).
On 8 May, Wolfspeed — which makes SiC materials and power semiconductor devices — disclosed that, to achieve its stated goal of strengthening its balance sheet, it may implement a transaction through an in-court solution, including required “going concern” language in its quarterly financial statements.
In response, Renesas has entered into the restructuring support agreement, which involves converting the $2.062bn deposit into convertible notes, common stock, and warrants issued by Wolfspeed, as follows:
- Wolfspeed convertible notes: $204m (about ¥29.8bn), convertible to Wolfspeed common stock, maturing in June 2031. These notes are convertible into 13.6% of Wolfspeed’s total issued shares on a non-diluted basis on completion of the restructuring. On a fully diluted basis, and prior to the exercise of the warrants to be granted to Renesas, this corresponds to 11.8%.
- Wolfspeed common stock: equivalent to 38.7% (17.9% on a fully diluted basis, prior to Renesas warrants exercise) of the total number of issued shares of Wolfspeed at the completion of the restructuring.
- Wolfspeed warrants: equivalent to 5% (on a fully diluted basis) of the total number of issued shares of Wolfspeed at the completion of the restructuring.
The restructuring is expected to be consummated through proceedings under Chapter 11 of the US Bankruptcy Code. It is expected that Wolfspeed will file a petition with the court to initiate such proceedings in the near future. The restructuring is expected to become effective by the end of September, subject to court approval of the plan. If the necessary regulatory approvals have not been obtained by this time, then Renesas will hold rights to instruments with equivalent economic value to Wolfspeed’s convertible notes, common stock and warrants until those approvals are received.
In connection with the signing of the restructuring support agreement, in its consolidated financial statements for first-half 2025 Renesas expects to record a loss on the deposited receivables related to the deposit of about ¥250bn ($1.7bn, at an average exchange rate of ¥150 to the dollar during the period).
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