Wolfspeed Near Collapse? Stock Crashes Nearly 26%

Wolfspeed, a leading U.S.-based manufacturer of silicon carbide (SiC) materials, released its fiscal Q3 2025 earnings report after market close on May 8. The results fell short of expectations, raising serious concerns among investors about the company's ability to renegotiate terms with creditors. As a result, Wolfspeed's stock plummeted 25.96% during the May 8 trading session, closing at $3.28 per share.

According to the earnings report, Wolfspeed's Q3 revenue dropped 7% year-over-year to $185 million. The Mohawk Valley facility contributed approximately $78 million to this total. The adjusted net loss widened to $0.72 per share, compared to a loss of $0.62 per share in the same period last year. Notably, the company did not provide guidance for its fiscal Q4 performance.

Despite its position as a key player in the automotive SiC sector, Wolfspeed has faced persistent losses, even after investing billions of dollars to build domestic SiC manufacturing capacity in the United States. The company's stock has already lost over half of its value this year, recently falling into single-digit territory.

Analysts from TD Cowen have suspended their rating and price target on Wolfspeed, citing growing uncertainty surrounding the company's capital structure and future earnings potential. They also noted that the likelihood of a financial restructuring is increasing, making it difficult to establish a reliable valuation model.

During its earnings call, Wolfspeed stated that debt restructuring negotiations are ongoing and may take place either in-court or out-of-court. The company plans to include a "going concern" statement in its upcoming 10-Q filing to reflect these uncertainties.

Analysts from Susquehanna International Group interpreted this as a potential signal of looming liquidation. They added that, despite Wolfspeed's efforts to ramp up SiC production, the company continues to face stiff competition from Chinese SiC substrate manufacturers.

Adding to market concerns is the possibility that Wolfspeed may lose access to a $750 million funding package originally granted under the U.S. CHIPS and Science Act. Given former President Donald Trump's past opposition to the CHIPS Act subsidies, any policy reversal under future leadership could further undermine Wolfspeed's already fragile financial outlook.