WOLFSPEED, INC.

Wolfspeed, Inc. is an innovator of wide bandgap semiconductors, focused on silicon carbide materials and devices for power applications. Its product families include silicon carbide materials and power devices, targeted for applications in the Automotive domain, including electric vehicles and fast charging, as well as existing and emerging applications in the Industrial & Energy domain such as AI data centers, grid modernization, renewable energy and storage, and aerospace and defense. The majority of products are manufactured at production facilities located in North Carolina, New York, and Arkansas, with contract manufacturers used for certain products and aspects of fabrication, assembly, and packaging. The company operates research and development facilities in North Carolina, Arkansas, and New York. Wolfspeed is a Delaware corporation originally established as a North Carolina corporation in 1987, with headquarters in Durham, North Carolina.

The company has maintained a well-established leadership position in the sale of silicon carbide wafer and silicon carbide and GaN epitaxy products, but faces increased competition from companies such as SICC Co., LTD., and TanKeBlue Semiconductor Co., Ltd in China. In power devices, competitors include Infineon Technologies AG, ON Semiconductor Corporation, Rohm Co. Ltd., ST Microelectronics N.V., Robert Bosch GmbH, and Silan Microelectronics Co. Ltd., as well as an increasing number of smaller competitors. The company believes its leading technology, product quality, and leveraged production scale position it to reliably supply production volumes to device manufacturers. Competition is based on performance, reliability, and overall system price.

Wolfspeed generates revenue through the sale of silicon carbide materials, including bare wafers, epitaxial wafers, and GaN epitaxial layers on silicon carbide wafers, and power devices, including silicon carbide Schottky diodes, MOSFETs, and power modules. Products are sold to customers and distributors for use in applications such as electric vehicles, charging infrastructure, server power supplies, solar inverters, uninterruptible power supplies, industrial power supplies, AI data centers, and grid modernization. A portion of products are sold to distributors who stock inventory and sell to their own customer base, and the company also utilizes third-party sales representatives. Revenue is recognized on products sold to distributors when an item is shipped and title passes, with certain distributors having limited rights to return inventory under stock rotation programs and limited price adjustment rights.

The silicon carbide materials product line consists of silicon carbide bare wafers, epitaxial wafers, and GaN epitaxial layers on silicon carbide wafers, targeted for customers who use them to manufacture products for radio-frequency, power, and other applications. Corporate, government, and university customers also buy these materials for research and development. The power device product line consists of silicon carbide Schottky diodes, MOSFETs, and power modules, which provide increased efficiency and faster switching speeds, resulting in reduced system size and weight over comparable silicon power devices. Power products are sold for use in electric vehicles, including charging infrastructure, server power supplies, solar inverters, uninterruptible power supplies, industrial power supplies, AI data centers, grid modernization, and other applications.

On June 30, 2025, the company and its wholly owned subsidiary, Wolfspeed Texas LLC, voluntarily filed petitions for relief under Chapter 11 of the United States Bankruptcy Code to implement a prepackaged Chapter 11 plan of reorganization. The plan was confirmed on September 8, 2025, and the company emerged from the Chapter 11 Cases on September 29, 2025. In connection with the plan, the company effected a reincorporation from North Carolina to Delaware. During fiscal 2025, the company completed the transition of its device production capacity from 150mm to 200mm offerings, and during the period ended June 28, 2026, closed the 150mm device fabrication facility in Durham, North Carolina, now producing all power devices in the 200mm Marcy, New York fabrication facility. The company also initiated headcount reduction and facility closure and consolidation plans, including two additional headcount reduction plans during the Successor period of fiscal 2026.

The company's financial performance has been significantly impacted by its emergence from Chapter 11 bankruptcy, with the adoption of fresh start accounting resulting in a new basis of accounting and the company becoming a new entity for financial reporting purposes. As a result, the consolidated financial statements after the Effective Date are not comparable with those on or before that date. The company has experienced significant revenue from a limited number of customers, with two customers each representing more than 10% of consolidated revenue in recent periods, and in the aggregate accounting for 41%, 38%, 37%, and 37% of total consolidated revenue in the periods from June 30, 2025 to September 29, 2025, September 30, 2025 to June 28, 2026, and the fiscal years ended June 29, 2025 and June 30, 2024, respectively. The company's stock price has experienced substantial volatility, ranging from a low of $14.80 to a high of $73.50 during the period from September 30, 2025 to June 28, 2026.

Management has not provided specific quantitative revenue, margin, or EPS guidance for the upcoming period in this filing.

A major growth vector is the continued transition to 200mm substrate production, which is critical to achieving manufacturing scale and cost competitiveness. The company completed the transition of device production capacity from 150mm to 200mm offerings during fiscal 2025, and now produces all power devices in the 200mm Marcy, New York fabrication facility. The company is also focusing on accelerating the pace of technological innovation, with research and development activities including developing silicon carbide materials and fabrication technology for a 200mm platform, developing higher performance power devices, increasing the quality, performance, and diameter of substrate and epitaxial materials, and continually improving manufacturing processes. The company is targeting applications in AI data centers, grid modernization, renewable energy and storage, and aerospace and defense, with AI-related demand described as an emerging and rapidly evolving market opportunity.

Another growth vector is the expansion into new markets and market segments, including AI data centers, grid modernization, and renewable energy and storage. The company continues to optimize sales, marketing, and technical applications support functions, as well as expand distribution capabilities to enable new and existing customers to design and implement silicon carbide and power technology into their products. The company's sales, marketing, and technical applications teams include personnel throughout North America, Asia, and Europe. The company is also focused on converting design-ins to significant volume sales over multi-year qualification cycles, particularly for automotive applications requiring stringent reliability and safety standards.

The company's margin and cost outlook is influenced by the continuing ramp of the Mohawk Valley and Siler City facilities, which will continue to experience increased pressure on margins until the facilities reach full utilization. The company has experienced underutilization costs at these facilities, and large upfront investments in facilities to increase capacity do not guarantee the capacity will be needed. The company has initiated headcount reduction and facility closure and consolidation plans to right-size operations, including two additional headcount reduction plans during the Successor period of fiscal 2026. The company's ability to achieve manufacturing cost targets and production yield goals is critical to profitability, and the transition to 200mm substrate production is essential to achieving competitive cost structures and improved economies of scale.

Operationally, the company manufactures silicon carbide substrates, MOSFETs, and Schottky diodes and power modules, utilizing manufacturing facilities in the United States in combination with assembly and test subcontractors throughout Asia. Manufacturing assets are managed together through one centralized organization to ensure scale in asset utilization, purchasing volumes, and overhead costs. The company's substrate manufacturing facilities in Durham, North Carolina are certified to ISO 9001, IATF 16949, ISO 14001, and ISO 45001, and the Mohawk Valley Fab is certified to LEED Silver, ISO 9001, and IATF 16949, with ISO 14001 and ISO 45001 certification in process. The company believes its current supply of essential materials is sufficient to meet its needs, and it continues to work with suppliers to develop purchase and capacity agreements that secure supply over extended time periods.

The company's capital allocation priorities include significant investment in research and development, with a focus on accelerating technological innovation. The company also has substantial debt obligations, including the New Senior Secured Notes, New 2L Non-Convertible Notes, New 2L Renesas Convertible Notes, New 2L Non-Renesas Convertible Notes, and 1.5L Convertible Notes, which require compliance with certain covenants and restrictions. The New Senior Secured Notes Indenture includes a liquidity maintenance financial covenant requiring the company to maintain at least $350 million of unrestricted cash and cash equivalents in accounts over which the collateral agent has a perfected first lien security interest as of the last day of any calendar month. The company may issue additional shares of common stock in connection with the exercise of the warrant issued to Renesas to purchase an aggregate of 4,943,555 shares, or the conversion of outstanding convertible notes, which would result in significant dilution to stockholders.

Structural headwinds include the company's dependence on a concentrated group of customers for significant revenue, with two customers each representing more than 10% of consolidated revenue in recent periods. The company faces competition from established semiconductor companies and state-supported international players, with aggressive pricing actions potentially reducing margins. The global silicon carbide market growth may not develop as rapidly as anticipated, and the company has experienced delays in completing development, introduction, and qualification of new products. Cyclical market patterns and potential downturns in end markets could impact demand, and the company's international sales are subject to variability due to tariffs, trade restrictions, and currency fluctuations. During the period from June 30, 2025 to September 29, 2025 and the period from September 30, 2025 to June 28, 2026, 77% and 66%, respectively, of revenue was from outside the United States.

Execution risks include manufacturing yield issues or failure to meet evolving quality standards, which could increase costs and damage customer relationships. The company has experienced difficulties in achieving acceptable yields on certain products in the past. The ability to balance customer demand with manufacturing capacity is critical, and if demand does not materialize at forecasted rates, the company may not scale back manufacturing expenses quickly enough, resulting in lower margins. Operational challenges in improving utilization at the Mohawk Valley and Siler City facilities may impact margins, and the company may be required to recognize impairments on long-lived assets or excess inventory write-off charges. The company also faces risks related to supply chain disruptions, reliance on local utilities and infrastructure, and changes in governmental policies and incentives, including the elimination of electric vehicle tax credits under the One Big Beautiful Bill Act, which could reduce demand for products.

The company's dependence on a concentrated customer base creates revenue vulnerability, with two customers each representing more than 10% of consolidated revenue in recent periods, and in the aggregate accounting for 41% ¹ of revenue in the period from June 30, 2025 to September 29, 2025 and 38% ² in the period from September 30, 2025 to June 28, 2026. The company faces intense competition from established semiconductor companies and state-supported international players, with aggressive pricing actions potentially reducing margins. The company's growth depends on the adoption of silicon carbide technology, and if the global silicon carbide market does not develop as rapidly as anticipated, demand could be adversely affected. Manufacturing yield issues or failure to meet evolving quality standards could increase costs and damage customer relationships, and the company has experienced difficulties in achieving acceptable yields on certain products in the past. The company's ability to achieve manufacturing cost targets and production yield goals is critical to profitability, and the transition to 200mm substrate production is essential to achieving competitive cost structures. The company's outstanding debt obligations, including the New Senior Secured Notes, New 2L Non-Convertible Notes, New 2L Renesas Convertible Notes, New 2L Non-Renesas Convertible Notes, and 1.5L Convertible Notes, impose significant restrictions and require compliance with covenants, including a liquidity maintenance financial covenant requiring at least $350 million ³ of unrestricted cash and cash equivalents. The company may issue additional shares of common stock in connection with the exercise of the warrant issued to Renesas to purchase an aggregate of 4,943,555 shares ⁴, or the conversion of outstanding convertible notes, which would result in significant dilution to stockholders.

Management's message emphasizes the company's emergence from Chapter 11 bankruptcy and the implementation of a comprehensive balance sheet restructuring, with the plan confirmed on September 8, 2025, and the company emerging on September 29, 2025. The company adopted fresh start accounting, resulting in a new basis of accounting and the company becoming a new entity for financial reporting purposes. Management highlights the completion of the transition of device production capacity from 150mm to 200mm offerings, including the substantial completion of the initial phase of major expansion projects, and the closure of the 150mm device fabrication facility in Durham, North Carolina, with all power devices now produced in the 200mm Marcy, New York fabrication facility. The company has continued to right-size operations by initiating two additional headcount reduction plans during the Successor period of fiscal 2026. Management's strategic priorities include accelerating the transition to 200mm substrate production, developing higher performance power devices, and expanding into new markets such as AI data centers, grid modernization, and renewable energy and storage. The company is focused on rebuilding stakeholder trust following emergence from the Chapter 11 Cases and achieving manufacturing scale and cost competitiveness.