[News] Wolfspeed’s Rumored Bankruptcy Puts Renesas’ $2B SiC Supply Deal at Risk

According to Japanese media outlet Nikkan Kogyo Shimbun, U.S.-based silicon carbide wafer producer Wolfspeed is reportedly moving toward filing for Chapter 11 bankruptcy protection. This development is prompting Japanese firms—including Renesas Electronics, which holds a 10-year supply agreement with Wolfspeed, along with Rohm—to reassess their strategic plans, the report notes.

As Nikkan Kogyo Shimbun states, Renesas could be impacted due to its 10-year SiC wafer supply agreement with Wolfspeed, signed in 2023 with a $2 billion upfront payment. If Wolfspeed files for Chapter 11 bankruptcy, Renesas may have to recognize impairment losses, the report suggests.

Nikkan Kogyo Shimbun also indicates that Renesas had intended to begin volume production of SiC power semiconductors at its Takasaki plant in 2025, using wafers supplied by Wolfspeed. While the production timeline has already been pushed back—potentially minimizing short-term effects—the ongoing uncertainty over future wafer availability poses a notable risk, according to the report.

Notably, Germany’s largest chipmaker, Infineon, extended its long-term supply agreement with Wolfspeed for 150mm silicon carbide wafers in 2024, building on their original 2018 deal. The renewed partnership includes a multi-year capacity reservation, suggesting that Wolfspeed’s current troubles could also affect Infineon’s supply.

Wolfspeed Nears Bankruptcy Amid Chinese Pressure

Facing fierce competition from rapidly expanding Chinese rivals and weak demand in the industrial and automotive markets, Wolfspeed is reportedly preparing to file for bankruptcy within weeks, according to Wall Street Journal and Reuters. Wolfspeed is now preparing to file for Chapter 11 bankruptcy with backing from most of its creditors, after turning down multiple out-of-court restructuring offers, the reports say.

Mounting pressure from Chinese rivals has played a key role in Wolfspeed’s decline. A February report from Nikkei highlighted China’s aggressive push into mature chips and niche substrates, driving prices to record lows. Wolfspeed’s 6-inch silicon carbide wafers once sold for $1,500 each—now Chinese rivals are offering them for as little as $500 or less, the report added.

TrendForce’s latest research shows that in 2024, Wolfspeed held the top spot with a 33.7% share in the SiC substrate market. However, Chinese rivals TanKeBlue and SICC quickly rose, capturing 17.3% and 17.1% shares, securing second and third place.

Read more

• Global SiC Substrate Revenue Declines 9% in 2024; Long-Term Demand Remains Strong as 8-Inch Roadmap Gains Momentum, Says TrendForce
• [News] Wolfspeed Reportedly to File Bankruptcy in Weeks as China’s Aggressive Pricing, Weak Demand Bite

(Photo credit: Wolfspeed’s X)