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What changed in WOLFSPEED, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of WOLFSPEED, INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+522 added−306 removedSource: 10-K (2025-08-26) vs 10-K (2024-08-22)

Top changes in WOLFSPEED, INC.'s 2025 10-K

522 paragraphs added · 306 removed · 205 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

35 edited+42 added−9 removed30 unchanged
Biggest changeThese controls, tariffs, regulations, and restrictions may have a material impact on our business, including our ability to sell products and to manufacture or source components. Working Capital For a discussion of our working capital practices, see “Liquidity and Capital Resources” in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations," of this Annual Report.
Biggest changeWe are also subject to import-export controls, tariffs and other trade-related regulations and restrictions in countries in which we have operations or otherwise do business. These controls, tariffs, regulations, and restrictions may have a material impact on our business, including our ability to sell products and to manufacture or source components.
We continue to experience higher prices on our raw materials as a result of inflation pressures, including base price increases and price surcharges. We have mitigated these increases by leveraging our growth to negotiate efficiencies and productivity-based cost reductions.
We continue to experience higher prices on our raw materials as a result of tariffs and inflation pressures, including base price increases and price surcharges. We have mitigated these increases by leveraging our growth to negotiate efficiencies and productivity-based cost reductions.
We believe that the strength of our portfolio of patent rights is important in helping us resolve or avoid such disputes with other companies in our industry. Governmental Regulation We are subject to a variety of federal, state, local and foreign provisions regulating the discharge of materials into the environment or otherwise relating to the protection of the environment.
We believe that the strength of our portfolio of patent rights is important in helping us resolve or avoid such disputes with other companies in our industry. 9 Table of Contents Governmental Regulation We are subject to a variety of federal, state, local and foreign provisions regulating the discharge of materials into the environment or otherwise relating to the protection of the environment.
Our silicon carbide device fabrication facility in Marcy, New York (the Mohawk Valley Fab) is certified to ISO 9001 and IATF 16949 and is in the process of being certified for ISO 14001.
Our silicon carbide device fabrication facility in Marcy, New York (the Mohawk Valley Fab) is certified to LEED ® Silver, ISO 9001 and IATF 16949 and is in the process of being certified for ISO 14001 and ISO 45001.
As market adoption of the technology grows with rapidly expanding power device designs, we have experienced increased competition from companies such as Coherent, Inc., SiCrystal GmbH, IQE plc and Resonac Holdings Corporation in the United States, Europe and Japan. In China, we have observed increased competition from companies such as SICC Co., Ltd. and EpiWorld International Co., Ltd.
As market adoption of the technology grows with rapidly expanding power device designs, we have experienced increased competition from companies such as Coherent, Inc., SiCrystal GmbH, IQE plc, and Resonac Holdings Corporation in the United States, Europe and Japan.
In other cases, we purchase items pursuant to discrete purchase orders. Our suppliers are located around the world and can be subject to constraints beyond our control that may limit supply. We believe our current supply of essential materials is sufficient to meet our needs. However, shortages have occurred from time to time and could occur again.
In other cases, we purchase items pursuant to discrete purchase orders. Our suppliers are located around the world and can be subject to constraints beyond our control that may limit supply. We believe our current supply of essential materials is sufficient to meet our needs.
We are focused on forecasting demand with sufficient time necessary to secure raw materials that may have extended lead times and we continue to work with suppliers to develop purchase and capacity agreements that secure supply over extended time periods, including accommodating our suppliers' need for capital investment when needed.
However, shortages have occurred from time to time and could occur again. 8 Table of Contents We are focused on forecasting demand with sufficient time necessary to secure raw materials that may have extended lead times and we continue to work with suppliers to develop purchase and capacity agreements that secure supply over extended time periods, including accommodating our suppliers' need for capital investment when needed.
As a result, we have classified the results and cash flows of the RF product line as discontinued operations in our consolidated statements of operations and consolidated statements of cash flows for all periods presented.
The RF Business Divestiture represented a strategic shift that had a major effect on our operations and financial results. As a result, we have classified the results and cash flows of the RF product line as discontinued operations in our consolidated statements of operations and consolidated statements of cash flows for all periods presented.
Wolfspeed, Inc. is a North Carolina corporation established in 1987, and our headquarters are in Durham, North Carolina. For further information about our consolidated revenue and earnings, please see our consolidated financial statements included in Item 8 of this Annual Report.
For further information about our consolidated revenue and earnings, please see our consolidated financial statements included in Item 8 of this Annual Report.
Sales and Marketing We have continued to make investments to expand our sales, marketing and technical applications support, as well as distribution capabilities to further enable new and existing customers to design and implement our silicon carbide and power technology into their products. We have continued to make investments to promote and build market awareness of our Wolfspeed brand.
Sales and Marketing We have continued to optimize our sales, marketing and technical applications support functions, as well as expand our distribution capabilities to further enable new and existing customers to design and implement our silicon carbide and power technology into their products. Our sales, marketing and technical applications teams include personnel throughout North America, Asia and Europe.
The loss of any large customer could have a material adverse effect on our business and results of operations. Distribution A portion of our products are sold to distributors.
The loss of any large customer, including as a result of negative perceptions about Wolfspeed in connection with the Chapter 11 Cases, could have a material adverse effect on our business and results of operations. 7 Table of Contents Distribution A portion of our products are sold to distributors.
Our front-end processes occur in manufacturing facilities called "wafer fabs". These processes involve several hundred manufacturing steps required for imprinting silicon carbide wafers with the precise circuitry required for semiconductor devices to function. Back-end processes include the assembly, test and packaging of semiconductors to make them suitable for use and sale.
Silicon carbide substrate manufacturing occurs in our materials facility and involves production of a bare wafer substrate with or without epitaxy. Our front-end processes occur in manufacturing facilities called "wafer fabs". These processes involve several hundred manufacturing steps required for imprinting silicon carbide wafers with the precise circuitry required for semiconductor devices to function.
Competition Silicon Carbide and GaN Materials We have continued to maintain a well-established leadership position in the sale of silicon carbide wafer and silicon carbide and GaN epitaxy products.
We believe our operations are currently not materially impacted by our ability to source raw materials, components and equipment used in manufacturing our products. Competition Silicon Carbide and GaN Materials We have continued to maintain a well-established leadership position in the sale of silicon carbide wafer and silicon carbide and GaN epitaxy products.
The benefits of implementing environmental and safety management systems include improved risk management, cost savings, meeting external stakeholder expectations, ensuring compliance with environmental and occupational safety laws, and decreasing our environmental footprint through discovering new possibilities for energy, water and waste usage reductions. 7 Table of Contents We are also subject to import-export controls, tariffs and other trade-related regulations and restrictions in countries in which we have operations or otherwise do business.
The benefits of implementing environmental and safety management systems include improved risk management, cost savings, meeting external stakeholder expectations, ensuring compliance with environmental and occupational safety laws, and decreasing our environmental footprint through discovering new possibilities for energy, water and waste usage reductions.
Our research and development activities include efforts to: • develop silicon carbide materials and fabrication technology for a 200mm platform; • develop higher performance power devices; • increase the quality, performance and diameter of our substrate and epitaxial materials; and • continually improve our manufacturing processes. 4 Table of Contents When our customers participate in funding our research and development programs, we recognize the amount funded as a reduction of research and development expenses to the extent that our customers’ funding does not exceed our respective research and development costs.
Our research and development activities include efforts to: • develop silicon carbide materials and fabrication technology for a 200mm platform; • develop higher performance power devices; • increase the quality, performance and diameter of our substrate and epitaxial materials; and • continually improve our manufacturing processes.
We endeavor to utilize recruiting practices that yield qualified and dedicated employees who are driven to achieve our vision. We are committed to offering an environment in which employees are ensured equal job opportunities and have a chance for advancement. We also have initiatives in place to reduce our global employee turnover rates, which are monitored and reviewed quarterly.
We are committed to offering an environment in which employees are ensured equal job opportunities and have a chance for advancement. We also have initiatives in place to reduce our global employee turnover rates, which are monitored and reviewed quarterly. Our goal is to ensure employees can find development and career growth without having to leave Wolfspeed.
These customers, in the aggregate, accounted for 37%, 36% and 48% of our total consolidated revenue in fiscal 2024, 2023 and 2022, respectively. For further discussion regarding customer concentration, please see Note 16, “Concentrations of Risk,” in our consolidated financial statements included in Item 8 of this Annual Report.
For further discussion regarding customer concentration, please see Note 15, “Concentrations of Credit Risk,” in our consolidated financial statements included in Item 8 of this Annual Report.
Design-wins Design-ins are considered design-wins when a customer issues a purchase order for at least 20% of the expected first year revenue. Design-wins reflect each project's entire commitment at the time this criterion is satisfied and should not be taken as an absolute indicator of future revenue.
Therefore, management uses the design-in amount as a guide to forecast future demand but it should not be taken as an absolute indicator of future revenue. Design-wins Design-ins are considered design-wins when a customer issues a purchase order for at least 20% of the expected first year revenue attributed to such customer.
As of June 30, 2024, we owned or were the exclusive licensee of 552 issued United States patents and approximately 1,048 foreign patents with various expiration dates extending up to 2049, with certain patents expiring in the near term.
We have also acquired, through license grants, purchases and assignments, rights to patents on inventions originally developed by others. As of June 29, 2025, we owned or were the exclusive licensee of 532 issued United States patents and approximately 993 foreign patents with various expiration dates extending up to 2049, with certain patents expiring in the near term.
Yields in our manufacturing process can vary and are dependent upon multiple factors including product complexity and performance requirements as well as the maturity of the process. In order to maximize both yield and quality, we maintain in-line process monitoring and testing. Our substrate and wafer fab manufacturing facilities are certified to ISO 9001, IATF 16949, and ISO 14001.
In order to maximize both yield and quality, we maintain a robust process design that includes in-line process monitoring and testing. Our substrate and wafer fab manufacturing facilities are certified to ISO 9001, IATF 16949, and ISO 14001.
Ltd., and ST Microelectronics N.V., as well as an increasing number of smaller competitors. Our silicon carbide products also compete with silicon semiconductor devices offered by a variety of manufacturers.
Power Devices Our silicon carbide power devices compete with silicon carbide power semiconductor solutions offered by Infineon Technologies AG, ON Semiconductor Corporation, Rohm Co. Ltd., ST Microelectronics N.V., Bosch, San'an Optoelectronics Co., Silan Microelectronics Co. Ltd., and SiChain Semiconductor, as well as an increasing number of smaller competitors.
Our power products compete in the power semiconductor market on the basis of performance, reliability and overall system price. 6 Table of Contents Patents and Other Intellectual Property Rights We believe it is important to protect our investment in technology by obtaining and enforcing intellectual property rights, including rights under patent, trademark, trade secret and copyright laws.
Patents and Other Intellectual Property Rights We believe it is important to protect our investment in technology by obtaining and enforcing intellectual property rights, including rights under patent, trademark, trade secret and copyright laws. We seek to protect inventions we consider significant by applying for patents in the United States and other countries when appropriate.
Employee Retention and Development We believe that our future success largely depends upon our continued ability to identify, attract, motivate and retain qualified personnel. Core to our ability to attract and retain talent is our high-performance culture, which is based on our three central values of (1) safety, integrity and respect, (2) ownership and accountability, and (3) ingenuity and passion.
Core to our ability to attract and retain talent is our high-performance culture, which is based on our three central values of (1) safety, integrity and respect, (2) ownership and accountability, and (3) ingenuity and passion. We are committed to creating and sustaining a culture where all employees are engaged and can contribute to their full potential.
We are committed to creating and sustaining a culture where all employees are engaged and can contribute to their full potential. We aim to provide our employees with competitive compensation, as well as opportunities for equity ownership and developmental programs that enable continued learning and growth.
We aim to provide our employees with competitive compensation, as well as opportunities for equity ownership and developmental programs that enable continued learning and growth. We endeavor to utilize recruiting practices that yield qualified and dedicated employees who are driven to achieve our vision.
Additionally, the related assets and liabilities associated with the transaction are classified as held for sale in the consolidated balance sheet as of June 25, 2023. Unless otherwise noted, discussion within this Annual Report relates to our continuing operations. The majority of our products are manufactured at our production facilities located in North Carolina, New York and Arkansas.
Unless otherwise noted, discussion within this Annual Report to the consolidated financial statements relates to our continuing operations. The majority of our products are manufactured at our production facilities located in North Carolina, New York and Arkansas. We also use contract manufacturers, some of which include captive lines, for certain products and aspects of product fabrication, assembly and packaging.
Our goal is to ensure employees can find development and career growth without having to leave Wolfspeed. Compensation and Benefits We are focused on offering competitive compensation and comprehensive benefit packages designed to promote the physical and emotional well-being and financial health of our employees.
Compensation and Benefits We are focused on offering competitive compensation and comprehensive benefit packages designed to promote the physical and emotional well-being and financial health of our employees. In addition to base pay, our total compensation package includes items such as bonuses, stock-based compensation and employee referral bonuses.
We completed the sale of certain assets comprising our former RF product line (the RF Business Divestiture) in the second quarter of fiscal 2024. The RF Business Divestiture represented a strategic shift that had a major effect on our operations and financial results.
We completed the sale of certain assets comprising our former RF product line (the "RF Business") in the second quarter of fiscal 2024 (the "RF Business Divestiture"). Refer to Note 3, "Discontinued Operations," to our consolidated financial statements in Part II, Item 8 of this Annual Report for more information on the RF Business Divestiture.
We utilize manufacturing facilities located in the United States in combination with assembly and test subcontractors throughout Asia.
We utilize manufacturing facilities located in the United States in combination with assembly and test subcontractors throughout Asia. Manufacturing assets are managed together through one centralized organization to ensure we leverage scale in asset utilization, purchasing volumes, and overhead costs across the business.
Our sales, marketing and technical applications teams include personnel throughout North America, Asia and Europe. Customers In fiscal 2024, 2023 and 2022, we had two, two and three customers, respectively, that each represented more than 10% of our consolidated revenue.
Customers We had two customers during each of fiscal 2025, 2024 and 2023 that each represented more than 10% of our consolidated revenue. These customers, in the aggregate, accounted for 37%, 37% and 36% of our total consolidated revenue in fiscal 2025, 2024 and 2023, respectively.
We believe our leading technology and leveraged production scale position us to reliably supply production volumes to the device manufacturers in the market. Power Devices Our silicon carbide power devices compete with silicon carbide power semiconductor solutions offered by Infineon Technologies AG, ON Semiconductor Corporation, Rohm Co.
In China, we have observed increased competition from companies such as SICC Co., Ltd., TanKeBlue Semiconductor Co., Ltd and EpiWorld International Co., Ltd. We believe our leading technology and leveraged production scale position us to reliably supply production volumes to the device manufacturers in the market.
Research and Development We invest significant resources in research and development.
Research and Development We invest significant resources in research and development and are focusing on accelerating the pace of technological innovation in our products.
Human Capital Employees As of June 30, 2024, we employed 5,013 regular full and part-time employees. We also employ individuals on a temporary full-time basis and use the services of contractors as necessary. Certain employees in various countries outside of the United States are subject to laws providing representation rights.
We also employ individuals on a temporary full-time basis and use the services of contractors as necessary.
In addition to base pay, our total compensation package includes items such as bonuses, stock-based compensation, employee stock purchase plans and employee referral bonuses. Our benefits package includes employee learnings, health and welfare, tuition reimbursement, student loan repayment, several wellness and emotional support options, adoption assistance and a family care program.
Our benefits package includes employee learnings, health and welfare, tuition reimbursement, student loan repayment, several wellness and emotional support options and adoption assistance. Additionally, we sponsor a 401(k) employee benefit plan for our United States based employees and we match a defined percentage of employee contributions.
Depending on timing, certain projects may be reflected within a single period's design-in and design-win figures. Design-wins for the fiscal year ended June 30, 2024 were $5.8 billion, compared with design-wins of $1.8 billion for the fiscal year ended June 25, 2023. Manufacturing We manufacture silicon carbide substrates, silicon carbide MOSFETs and Schottky diodes and power modules.
Design-wins for fiscal 2025 and the fourth quarter of fiscal 2025 were the second highest design-wins for a fiscal year and fiscal fourth quarter in company history, respectively. Manufacturing We manufacture silicon carbide substrates, silicon carbide MOSFETs and Schottky diodes and power modules.
We believe these initiatives help contribute to the development of future leaders, increased employee engagement and expanded market reach. 8 Table of Contents Available Information Our website address is www.wolfspeed.com and our investor relations website is located at https://investor.wolfspeed.com.
We believe this allows Wolfspeed to solve problems that other companies think to be impossible, helping to drive better business results. Available Information Our website address is www.wolfspeed.com and our investor relations website is located at https://investor.wolfspeed.com.
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We also use contract manufacturers for certain products and aspects of product fabrication, assembly and packaging. We maintain captive lines at some of our contract manufacturers. We are constructing a new materials manufacturing facility in North Carolina and renovating an epitaxy facility in Texas. We operate research and development facilities in North Carolina, Arkansas and New York.
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We are constructing a new materials manufacturing facility in North Carolina, which the initial phase was substantially completed as of late fiscal 2025. We operate research and development facilities in North Carolina, Arkansas and New York. Wolfspeed, Inc. is a North Carolina corporation established in 1987, and our headquarters are in Durham, North Carolina.
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Therefore, management uses the design-in amount as a guide to forecast future demand but it should not be taken as an absolute indicator of future revenue. Design-ins for the fiscal year ended June 30, 2024 were $9.1 billion, compared with design-ins of approximately $7.9 billion for the fiscal year ended June 25, 2023.
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Chapter 11 Proceedings Restructuring Support Agreement On June 22, 2025, Wolfspeed and its wholly owned subsidiary, Wolfspeed Texas LLC (together with Wolfspeed, the "Debtors") entered into a Restructuring Support Agreement (together with all exhibits, annexes and schedules thereto, and as may be amended, supplemented or modified from time to time, the “Restructuring Support Agreement”) with: i. certain holders of Wolfspeed's Senior Secured Notes due 2030 (the “Senior Secured Notes,” and such holders, the “Consenting Senior Secured Noteholders”); ii. certain holders of Wolfspeed's 1.75% Convertible Senior Notes due 2026 (the "2026 Notes"), 0.25% Convertible Senior Notes due 2028 (the “2028 Notes”), and 1.875% Convertible Senior Notes due 2029 (the “2029 Notes”) (collectively, the “Convertible Notes,” and such holders, the “Consenting Convertible Noteholders,” and together with the Consenting Senior Secured Noteholders, the “Consenting Noteholders”); and iii.
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Manufacturing assets are managed together through one centralized organization to ensure we leverage scale in asset utilization, purchasing volumes, and overhead costs across the business. 5 Table of Contents Silicon carbide substrate manufacturing occurs in our highly complex materials facility and involves production of a bare wafer substrate with or without epitaxy.
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Renesas Electronics America Inc ("Renesas," and together with the Consenting Noteholders, the "Consenting Creditors"), the holder of loans under that certain Unsecured Customer Refundable Deposit Agreement, dated as of July 5, 2023 (as amended to date, the "CRD Agreement").
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We have continued to be successful in managing through these current issues and demonstrated the ability to navigate through significant supply challenges. We believe our operations are currently not materially impacted by our ability to source raw materials, components and equipment used in manufacturing our products.
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We intend to substantially de-lever our capital structure on the terms set forth in the Restructuring Support Agreement through the joint plan of reorganization filed by the Debtors under Chapter 11 of the United States Bankruptcy Code (as may be amended, supplemented, or modified from time to time, the "Plan").
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We seek to protect inventions we consider significant by applying for patents in the United States and other countries when appropriate. We have also acquired, through license grants, purchases and assignments, rights to patents on inventions originally developed by others.
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The specific terms underlying the Restructuring Support Agreement are further detailed in the Plan. 4 Table of Contents On June 30, 2025 (the "Petition Date") the Debtors filed voluntary petitions (the "Chapter 11 Cases") under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the Southern District of Texas, Houston Division (the "Bankruptcy Court") to implement the Plan.
Removed
We offer a 'work where it works' arrangement that allows employees who are able to perform their job duties from an off-campus location to have the flexibility of working remotely full-time or part-time. Additionally, we sponsor a 401(k) employee benefit plan for our United States based employees and we match a defined percentage of employee contributions.
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The following is a summary of the material terms of the transactions contemplated by the Restructuring Support Agreement and the Plan: • Senior Secured Notes.
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Diversity, Equity and Inclusion We believe diversity, equity, and inclusion drives better business results and makes all of us better employees and people. We are striving to build an environment where inclusivity is real and active, rather than theoretical and static.
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Holders of Senior Secured Notes are expected to receive their pro rata share of (i) new senior secured notes (“New Senior Secured Notes”), which will have substantially similar terms to the existing Senior Secured Notes with certain modifications to reduce go-forward cash interest and minimum liquidity requirements, (ii) a payment from the redemption of $250 million in principal amount of existing Senior Secured Notes at a redemption price of 109.875% of the principal amount being redeemed (to be paid with the proceeds of the Rights Offering (as described below)), and (iii) certain commitment fees, subject to certain conditions. • Convertible Notes.
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We celebrate our employees’ differences and authenticity, and understand that diverse ideas, perspectives, thinking styles, and backgrounds produce higher quality decisions, enabling us to solve problems other companies consider to be impossible.
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Holders of Convertible Notes are expected to receive their pro rata share of (i) rights to participate in the rights offering of new second-lien convertible notes (“New 2L Convertible Notes”) in the principal amount of $301.13 million, to be fully backstopped by certain holders of Wolfspeed's existing Convertible Notes, and the issuance of additional New 2L Convertible Notes in the principal amount of $30.25 million pursuant to a premium, as discussed in more detail below under the section titled “Backstop Commitment Agreement,” (ii) new second-lien notes in the principal amount of $296 million (“New 2L Takeback Notes”), and (iii) 56.3% of a new voting class of common equity interests of Wolfspeed (the “New Common Stock”) to be issued on the date on which the Plan becomes effective in accordance with its terms (the "Plan Effective Date"), subject to dilution from other equity issuances, including the conversion of the New 2L Convertible Notes, and the convertible notes and warrants provided to Renesas (described below).
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Our efforts to foster a diverse and inclusive workplace include Employee Resources Groups, a Diversity, Equity and Inclusion leadership team that partners with our Human Resources department and various scholarship programs in our surrounding communities.
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Wolfspeed is expected to provide certain registration rights with respect to certain shares of the New Common Stock underlying the New 2L Convertible Notes to certain holders of the existing Convertible Notes. • Renesas.
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Subject to certain regulatory approvals and conditions set forth in the Plan, Renesas is expected to receive or be entitled to certain economic benefits associated with (i) new second-lien convertible notes in the principal amount of $204 million, (ii) 38.7% (subject to claims reconciliation in the Chapter 11 Cases) of the New Common Stock as of the Plan Effective Date, subject to dilution from certain equity incentive plans expected to be adopted upon emergence from Chapter 11 of the Bankruptcy Code ("Chapter 11") and certain other equity issuances, including the conversion of the New 2L Convertible Notes, and the convertible notes and warrants provided to Renesas, (iii) warrants to purchase 5% of the New Common Stock as of the Plan Effective Date (assuming conversion of convertible notes issued to Renesas and all New 2L Convertible Notes), and (iv) if certain regulatory approvals have not been obtained prior to the deadline described in the Restructuring Support Agreement, certain contingent consideration, including $15 million in cash (the “Reserve Cash”), additional New 2L Takeback Notes in a principal amount of $15 million (the “Additional New 2L Takeback Notes”), 2.0% of the New Common Stock as of the Plan Effective Date, subject to dilution from certain equity incentive plans expected to be adopted upon emergence from Chapter 11 and certain other equity issuances, including the conversion of the New 2L Convertible Notes, and the convertible notes and warrants provided to Renesas, and the right to a one-year extension of the exercise period of the warrants (the foregoing, collectively with the Reserve Cash, the Additional New 2L Takeback Notes, the “Contingent Consideration”).
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If certain regulatory approvals are obtained prior to the deadline described in the Restructuring Support Agreement and set forth in the Plan, Renesas will not be entitled to the Contingent Consideration and $10 million of the Reserve Cash will be remitted to or retained by Wolfspeed, $5 million of the Reserve Cash will be remitted to the holders of the Senior Secured Notes (on account of certain claims for commitment fees), the Additional New 2L Takeback Notes will not be issued, the 2.0% of the New Common Stock as of the Plan Effective Date will be distributed to the holders of existing equity interests (as discussed below), and the term of the warrants granted to Renesas will not be extended.
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Similar to the holders of existing Convertible Notes, Renesas will also be entitled to certain registration rights as set forth in the Restructuring Support Agreement. • Unsecured Creditors. All other unsecured creditors are expected to be unimpaired and paid on the Plan Effective Date or in the ordinary course of business. • Existing Equity Holders.
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Our existing equity interests will be cancelled, and existing equity holders are expected to receive their pro rata share of 3.0% or 5.0% of the New Common Stock as of the Plan Effective Date (depending on whether Renesas obtains certain regulatory approvals), subject to dilution from certain equity incentive plans expected to be adopted upon emergence from Chapter 11 and certain other equity issuances, including the conversion of the New 2L Convertible Notes, and the convertible notes and warrants provided to Renesas. 5 Table of Contents Consummation of the transactions contemplated by the Restructuring Support Agreement and the Plan is subject to, among other things, approval of the Plan by the Bankruptcy Court and the satisfaction or waiver of certain conditions set forth in the Plan.
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Accordingly, no assurance can be given that the transactions described therein will be consummated. Renesas’s receipt of regulatory approvals is not a condition precedent to the Plan Effective Date.
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Backstop Commitment Agreement On June 22, 2025, Wolfspeed entered into a Rights Offering Backstop Commitment Agreement (the “Backstop Commitment Agreement”) with the rights offering backstop parties (the “Backstop Parties”) and the rights offering holdback parties (the “Holdback Parties”) party thereto.
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Pursuant to the Backstop Commitment Agreement (and subject to the terms and conditions therein), Wolfspeed initiated a rights offering on August 14, 2025 as contemplated under the Restructuring Support Agreement through the issuance of the New 2L Convertible Notes in an aggregate principal amount of $301.13 million, which were or are being offered at a purchase price of 91.3242% of the principal amount thereof (the “Rights Offering”).
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Sixty percent of the Rights Offering (“Non-Holdback Rights Offering”) is being offered pro rata to all holders of Convertible Notes (the “Subscription Rights”) and the Backstop Parties have committed to purchase any unsubscribed portion of the Non-Holdback Rights Offering.
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The remaining 40% of the Rights Offering (“Holdback Rights Offering”) has been reserved for the Holdback Parties that have committed to purchasing their respective portions set forth in the Backstop Commitment Agreement.
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As consideration for the commitments by the Backstop Parties and Holdback Parties, the Backstop Parties and the Holdback Parties. will be issued on the Plan Effective Date, additional New 2L Convertible Notes in an aggregate principal amount of $30.25 million (the “Backstop Premium"), allocated ratably.
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If the Backstop Commitment Agreement is terminated under certain circumstances as set forth therein, the Backstop Commitment Agreement provides for a cash payment of the Backstop Premium to the Backstop Parties and Holdback Parties on the earlier of the four months following the Petition Date or the effective date of an “Alternative Transaction” (as defined in the Backstop Commitment Agreement).
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The transactions contemplated by the Backstop Commitment Agreement are conditioned upon the satisfaction or waiver of certain conditions, including, among other things, that (i) the Bankruptcy Court shall have entered an order approving the Backstop Commitment Agreement and the disclosure statement relating to the Plan (the "Disclosure Statement") and confirming the Plan, (ii) the Plan Effective Date shall have occurred, and (iii) the Restructuring Support Agreement remains in full force and effect.
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Senior Secured Notes Amendment On June 23, 2025, Wolfspeed, the Subsidiary Guarantors (as defined under the A&R Indenture (as defined below)) and U.S.
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Bank Trust Company, National Association, as trustee (the “Trustee”) and collateral agent (the “Collateral Agent”), entered into that certain Second Supplemental Indenture (the “Second Supplemental Indenture”) to the Amended and Restated Indenture, dated as of October 11, 2024, by and among Wolfspeed, the Subsidiary Guarantors party thereto from time to time, the Trustee and the Collateral Agent (as supplemented by the First Supplemental Indenture, dated as of October 22, 2024, the “A&R Indenture”), pursuant to which the parties thereto agreed to (i) release Wolfspeed Germany GmbH, a Subsidiary Guarantor, from its obligations under the Notes Documents (as defined under the A&R Indenture) and any related liens and (ii) exclude net proceeds of the sale of “Building 21” from the offer to repurchase requirement under the A&R Indenture.
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Voluntary Petition Subsequent to fiscal 2025 year-end, on the Petition Date, the Debtors filed voluntary petitions under Chapter 11 of Title 11 of the Bankruptcy Code in the Bankruptcy Court. On the Petition Date, the Debtors filed the Plan with the Bankruptcy Court. The Plan embodies the terms of, and transactions contemplated by, the Restructuring Support Agreement.
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On June 27, 2025, prior to commencing the Chapter 11 Cases, the Debtors commenced solicitation for approval of the Plan by eligible claimholders by transmitting its Disclosure Statement and related solicitation materials. The deadline for eligible claimholders to submit votes on the Plan was August 22, 2025.
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On July 1, 2025, the Bankruptcy Court entered an order approving Wolfspeed's request to administer the Chapter 11 Cases jointly for administrative purposes only under the caption In re Wolfspeed, Inc., et al.
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Wolfspeed will continue to operate its business as a “debtor-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.
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The Debtors filed and received approval for customary first day motions with the Bankruptcy Court to ensure their ability to continue operating in the ordinary course of business, including authority to pay employees, vendors, and customers.
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The treatment under the Plan and the Bankruptcy Court-approved relief sought and received in Wolfspeed’s “first day” motions collectively contemplate that vendors and other unsecured creditors will be paid in full and in the ordinary course of business.
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See the section titled “Risk Factors – Risks related to our Chapter 11 Cases” for a discussion of the risks related to the Restructuring Support Agreement, the Plan and the Chapter 11 Cases. 6 Table of Contents Reincorporation in Delaware In connection with the Plan, we plan to effect a reincorporation from the State of North Carolina to the State of Delaware (the “Reincorporation”).
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Upon consummation of the Reincorporation, Wolfspeed will cease its legal existence as a North Carolina corporation, and the surviving Delaware corporation will continue our business under the name “Wolfspeed, Inc.”, succeeding to all of our rights, assets, liabilities and obligations.
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In connection with the Plan and the Reincorporation, we will adopt a new Certificate of Incorporation and new Bylaws under the Delaware General Corporation Law, which will replace our current Amended and Restated Articles of Incorporation and Bylaws. As of the date hereof, we have not effected the Reincorporation.
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When our customers participate in funding our research and development programs, we recognize the amount funded as a reduction of research and development expenses to the extent that our customers’ funding does not exceed our respective research and development costs.
Added
Design-wins reflect each project's entire commitment at the time this criterion is satisfied and should not be taken as an absolute indicator of future revenue. Depending on timing, certain projects may be reflected within a single period's design-in and design-win figures.
Added
During fiscal 2025, we accelerated the transition of our production capacity from 150mm to 200mm offerings including the substantial completion of the initial phase of our major expansion projects and the planned closure of our 150mm device fabrication facility in Durham, North Carolina.
Added
Back-end processes include the assembly, test and packaging of semiconductors to make them suitable for use and sale. Yields in our manufacturing process can vary and are dependent upon multiple factors including product complexity and performance requirements as well as the maturity of the process.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

92 edited+174 added−20 removed117 unchanged
Biggest changeRisk categories and certain principal risks under each category (each described more fully below): – Risks related to our global operations, including global macroeconomic and market risks • Our business may be adversely affected by the state of the global economy, uncertainties in global financial markets, our ability, or our customers' or suppliers' ability, to access funding, and possible trade tariffs and trade restrictions. • We are subject to risks related to international sales and purchases. – Risks related to sales, product development and manufacturing • We face significant challenges managing our growth strategy. • Variations in our production could impact our ability to reduce costs and could cause our margins to decline and our operating results to suffer. • Our results of operations, financial condition and business could be harmed if we are unable to balance customer demand and capacity. – Risks associated with our strategic transactions • If we fail to evaluate and execute strategic opportunities successfully, our business may suffer. • We are subject to a number of risks associated with the sale of our former RF product line (the RF Business), and these risks could adversely impact our operations, financial condition and business. – Risks associated with cybersecurity, intellectual property and litigation • We may be subject to confidential information theft or misuse, which could harm our business and results of operations. • There are limitations on our ability to protect our intellectual property. – Risks related to legal, regulatory, accounting, tax and compliance matters • We may be required to recognize a significant charge to earnings if our goodwill or other assets become impaired. • The adoption of or changes in government and/or industry policies, standards or regulations relating to the efficiency, performance, vehicle range or other aspects of our products and the products in which they are utilized could impact the demand for our products. – General risk factors • We have outstanding debt which could materially restrict our business and adversely affect our financial condition, liquidity and results of operations. 9 Table of Contents Risks related to our global operations, including global macroeconomic and market risks Our business may be adversely affected by the state of the global economy, uncertainties in global financial markets, our ability, or our customers' or suppliers' ability, to access funding, and possible trade tariffs and trade restrictions.
Biggest changeIf the Plan becomes effective, the ownership interest of holders of our existing common stock will be substantially diluted. • Following the effectiveness of the Plan, certain Consenting Convertible Noteholders and Renesas, if they choose to act together, will have the ability to significantly influence all matters submitted to shareholders of the reorganized company for approval. • Our business could suffer from a long and protracted restructuring. • As a result of the Chapter 11 Cases, our historical financial information will not be indicative of our future performance. • The Chapter 11 Cases raise substantial doubt regarding our ability to continue as a going concern. • Our planned Reincorporation from the State of North Carolina to the State of Delaware could have significant legal, tax and governance implications for us and our stockholders, could expose us to additional risks and uncertainties and we may not realize the expected benefits of the Reincorporation. • We will be required to reduce certain of our tax attributes due to the exclusion of cancellation of indebtedness ("COD") income from gross income upon emergence from the Chapter 11 Cases. – Risks related to our global operations, including global macroeconomic and market risks • Our business may be adversely affected by the state of the global economy, uncertainties in global financial markets, our ability or our customers' or suppliers' ability to access funding, and the impact of trade tariffs and trade restrictions on the supply chains and global demand for our products or our customers' or suppliers' products. • We are subject to risks related to international sales and purchases. – Risks related to sales, product development and manufacturing • We face significant challenges managing our growth strategy. • Our results of operations, financial condition and business could be harmed if we are unable to balance customer demand and capacity. • Variations in our production could impact our ability to reduce costs and could cause our margins to decline and our operating results to suffer. – Risks associated with our strategic transactions • If we fail to evaluate and execute strategic opportunities successfully, our business may suffer. • We are subject to a number of risks associated with our restructuring plan, and these risks could impact our operations, financial condition and ability to realize expected cost savings. • We are subject to a number of risks associated with the sale of our former Lighting Products, LED Products and RF business units, and these risks could adversely impact our operations, financial condition and business. – Risks associated with our capital structure • We have outstanding debt which could materially restrict our business and adversely affect our financial condition, liquidity and results of operations. – Risks associated with cybersecurity, intellectual property and litigation • We may be subject to confidential information theft or misuse, which could harm our business and results of operations. • There are limitations on our ability to protect our intellectual property. – Risks related to legal, regulatory, accounting, tax and compliance matters • We and certain of our former executive officers have been named as defendants in securities class action lawsuits.
In addition, we are subject to data privacy, protection and security laws and regulations, including the European General Data Protection Act (GDPR) that governs personal information of European persons. We also maintain compliance programs to address the potential applicability of restrictions against trading while in possession of material, nonpublic information generally and in connection with a cyber-security breach.
In addition, we are subject to data privacy, protection and security laws and regulations, including the European General Data Protection Act (the "GDPR") that governs personal information of European persons. We also maintain compliance programs to address the potential applicability of restrictions against trading while in possession of material, nonpublic information generally and in connection with a cyber-security breach.
There can be no assurance that third parties will not attempt to assert infringement claims against us, or our customers, with respect to our products. In addition, our customers may face infringement claims directed to the customer’s products that incorporate our products, and an adverse result could impair the customer’s demand for our products.
There can be no assurance that third parties will not attempt to assert infringement claims against us, or our customers, with respect to our products. In addition, our customers may face infringement claims directed to that customer’s products that incorporate our products, and an adverse result could impair the customer’s demand for our products.
The 2030 Senior Notes Indenture also requires us to make an offer to repurchase the 2030 Senior Notes with 100% of the net cash proceeds of certain non-ordinary course asset sales and casualty events, subject to the ability to reinvest the proceeds of such casualty events and asset sales (subject to certain limitations), or upon a change of control.
The 2030 Senior Notes Indenture also requires us to make an offer to repurchase the Senior Secured Notes with 100% of the net cash proceeds of certain non-ordinary course asset sales and casualty events, subject to the ability to reinvest the proceeds of such casualty events and asset sales (subject to certain limitations), or upon a change of control.
There are also inherent execution risks in starting up a new factory or expanding production capacity, whether one of our own factories or that of our contract manufacturers, as well as risks to moving production to different contract manufacturers, that could increase costs and reduce our operating results.
There are also inherent execution risks in starting up a new factory or expanding production capacity, whether one of our own factories or that of our contract manufacturers, as well as risks to moving production to different contract manufacturers, which could increase costs and reduce our operating results.
If we are not able to increase our production capacity at our targeted rate, if there are unforeseen costs associated with increasing our capacity levels, or if we are unable to obtain advanced semiconductor manufacturing equipment in a timely manner, we may not be able to achieve our financial targets.
However, if we are not able to increase our production capacity at our targeted rate, if there are unforeseen costs associated with increasing our capacity levels, or if we are unable to obtain advanced semiconductor manufacturing equipment in a timely manner, we may not be able to achieve our financial targets.
The Indentures governing the Outstanding Convertible Notes (the Convertible Notes Indentures) require us to repurchase the Outstanding Convertible Notes upon certain fundamental changes relating to our common stock, and also prohibit our consolidation, merger, or sale of all or substantially all of our assets except with or to a successor entity assuming our obligations under the Indentures.
The Indentures governing the Convertible Notes (the "Convertible Notes Indentures") require us to repurchase the Convertible Notes upon certain fundamental changes relating to our common stock, and also prohibit our consolidation, merger, or sale of all or substantially all of our assets except with or to a successor entity assuming our obligations under the Indentures.
We are subject to risks associated with the sale of our former Lighting Products and LED Products business units, and these risks could adversely impact our financial condition. On May 13, 2019, we closed the sale of our former Lighting Products business unit to IDEAL Industries, Inc.
We are subject to risks associated with the sale of our former Lighting Products, LED Products and RF business units, and these risks could adversely impact our financial condition. On May 13, 2019, we closed the sale of our former Lighting Products business unit to IDEAL Industries, Inc.
To date, we do not believe that such unauthorized access has caused us any material damage. We might be unaware of any such access or unable to determine its magnitude and effects. We are also at risk of security breaches and disruptions occurring at third parties that we work with, including our customers and suppliers.
We might be unaware of any such access or unable to determine its magnitude and effects. We are also at risk of security breaches and disruptions occurring at third parties that we work with, including our customers and suppliers. To date, we do not believe that such unauthorized access to these systems has caused us any material damage.
We receive a significant amount of our revenue from a limited number of customers and distributors, two of which individually represented more than 10% of our consolidated revenue in fiscal 2024. Many of our customer orders are made on a purchase order basis, which does not generally require any long-term customer commitments.
We receive a significant amount of our revenue from a limited number of customers and distributors, two of which individually represented more than 10% of our consolidated revenue in fiscal 2025. Many of our customer orders are made on a purchase order basis, which does not generally require any long-term customer commitments.
The theft and/or unauthorized use or publication of our trade secrets and other confidential business information as a result of such an incident could adversely affect our competitive position, result in a loss of confidence in the adequacy of our threat mitigation and detection processes and 18 Table of Contents procedures, cause us to incur significant costs to remedy the damage caused by the incident, divert management's attention and other resources, and reduce the value of our investment in research and development.
The theft and/or unauthorized use or publication of our trade secrets and other confidential business information as a result of such an incident could adversely affect our competitive position, result in a loss of confidence in the adequacy of our threat mitigation and detection processes and procedures, cause us to incur significant costs to remedy the damage caused by the incident, divert management's attention and other resources, and reduce the value of our investment in research and development.
The level of our outstanding debt may adversely affect our operating results and financial condition by, among other things: • increasing our vulnerability to downturns in our business, to competitive pressures and to adverse general economic and industry conditions; • requiring the dedication of an increased portion of our expected cash flows from operations to service our indebtedness, thereby reducing the amount of expected cash flow available for other purposes, including capital expenditures, research and development and stock repurchases; • limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; • placing us at a competitive disadvantage compared to our peers that may have less indebtedness than we have by limiting our ability to borrow additional funds needed to operate and grow our business; and • increasing our interest expense if interest rates increase.
The level of our outstanding debt may adversely affect our operating results and financial condition by, among other things: • increasing our vulnerability to downturns in our business, to competitive pressures and to adverse general economic and industry conditions; • requiring the dedication of an increased portion of our expected cash flows from operations to service our indebtedness, thereby reducing the amount of expected cash flow available for other purposes, including capital expenditures, or research and development; 27 Table of Contents • limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; • placing us at a competitive disadvantage compared to our peers that may have less indebtedness than we have by limiting our ability to borrow additional funds needed to operate and grow our business; and • increasing our interest expense if interest rates increase.
If we are unable to effectively develop, manage and expand our sales channels for our products, our operating results may suffer. We sell a portion of our products to distributors, including a distributor that represented more than 10% of our revenue in fiscal 2024.
If we are unable to effectively develop, manage and expand our sales channels for our products, our operating results may suffer. We sell a portion of our products to distributors, including a distributor that represented more than 10% of our revenue in fiscal 2025.
As inventory levels and 15 Table of Contents product return trends change or we make changes to our distributor roster, we may have to revise our estimates and incur additional costs, and our gross margins and operating results could be adversely impacted.
As inventory levels and product return 24 Table of Contents trends change or we make changes to our distributor roster, we may have to revise our estimates and incur additional costs, and our gross margins and operating results could be adversely impacted.
The methods, estimates and judgments that we use in applying our accounting policies have a significant impact on our results (see “Critical Accounting Estimates” in Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" of this Annual Report).
The methods, estimates and judgments that we use in applying our accounting policies have a significant impact on our results (see “Critical Accounting Estimates” in Part II, Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" of this Annual Report).
Allocation and effective management of the resources necessary to successfully implement, integrate, train personnel and sustain our information technology platforms will remain critical to ensuring that we are not subject to transaction errors, processing inefficiencies, loss of customers or suppliers, business disruptions or loss of or damage to intellectual property through a security breach in the near term.
Allocation and effective management of the resources necessary to successfully implement, integrate, train personnel and sustain our information technology platforms will remain critical to ensuring that we are not subject to transaction errors, processing inefficiencies, loss of customers or suppliers, business disruptions or loss of or 21 Table of Contents damage to intellectual property through a security breach in the near term.
In the event of an adverse result in such litigation, we could be required to pay substantial damages; indemnify our customers; stop the manufacture, use 19 Table of Contents and sale of products found to be infringing; incur asset impairment charges; discontinue the use of processes found to be infringing; expend significant resources to develop non-infringing products or processes; or obtain a license to use third party technology.
In the event of an adverse result in such litigation, we could be required to pay substantial damages; indemnify our customers; stop the manufacture, use and sale of products found to be infringing; incur asset impairment charges; discontinue the use of processes found to be infringing; expend significant resources to develop non-infringing products or processes; or obtain a license to use third party technology.
Distributors must balance the need to have enough products in stock in order to meet their customers’ needs against their internal target inventory levels and the risk of potential inventory obsolescence. The risks of inventory obsolescence are especially relevant to technological products.
Distributors must balance the need to have enough products in stock in order to meet their customers’ demand against their internal target inventory levels and the risk of potential inventory obsolescence. The risks of inventory obsolescence are especially relevant to technological products.
There may also be secondary impacts that are unforeseeable as well, such as impacts to our customers, which could cause delays in new orders, delays in completing sales or even order cancellations. In order to compete, we must attract, motivate and retain key employees, and our failure to do so could harm our results of operations.
There may also be secondary impacts that are unforeseeable as well, such as impacts to our customers, which could cause delays in new orders, delays in completing sales or even order cancellations. 33 Table of Contents In order to compete, we must attract, motivate and retain key employees, and our failure to do so could harm our results of operations.
The tariffs imposed on Chinese goods, among other potential countries and any corresponding tariffs from China or such other countries in response has, and may in the future, negatively impact demand and/or increase the costs for our products.
The tariffs imposed on Chinese goods, among other countries and any corresponding tariffs from China or such other countries in response has negatively impacted, and may in the future negatively impact, demand and/or increase the costs for our products.
We generally purchase these sole or limited source items with purchase orders, and we have limited guaranteed supply arrangements with such suppliers, including take-or-pay arrangements and capacity reserve deposit agreements. Some of our 14 Table of Contents sources can have variations in attributes and availability which can affect our ability to produce products in sufficient volume or quality.
We generally purchase these sole or limited source items with purchase orders, and we have limited guaranteed supply arrangements with such suppliers, including take-or-pay arrangements and capacity reserve deposit agreements. Some of our sources can have variations in attributes and availability which can affect our ability to produce products in sufficient volume or quality.
We also cannot be sure that we would have adequate remedies for any breach of such agreements or other misappropriation of our trade secrets, or that our trade secrets and proprietary know-how will not otherwise become known or be independently discovered by others. Litigation could adversely affect our operating results and financial condition.
We also cannot be sure that we would have adequate remedies for any breach of such agreements or other misappropriation of our trade secrets, or that our trade secrets and proprietary know-how will not otherwise become known or be independently discovered by others. 29 Table of Contents Litigation could adversely affect our operating results and financial condition.
We face risks relating to our suppliers, including that we rely on a number of key sole source and limited source suppliers, are subject to high price volatility on certain commodity inputs, variations in parts quality, and raw material consistency and availability, and rely on independent shipping companies for delivery of our products.
We face risks relating to our suppliers, including that we rely on a number of key sole source and limited source suppliers, are subject to high price volatility on certain commodity inputs, including as a result of tariffs, variations in parts quality, and raw material consistency and availability, and rely on independent shipping companies for delivery of our products.
Similarly, we have the ability to add, consolidate, or remove distributors. We typically recognize revenue on products sold to distributors when an item is shipped and title passes to the distributor (sell-in method). Certain distributors have limited rights to return inventory under stock rotation programs and have limited price adjustment rights for which we make estimates.
Similarly, we have the ability to add, consolidate, or remove distributors. We typically recognize revenue on products sold to distributors when an item is shipped and title passes to the distributor. Certain distributors have limited rights to return inventory under stock rotation programs and have limited price adjustment rights for which we make estimates.
We do not control the time and resources that these suppliers devote to our business, and we cannot be sure that these suppliers will perform their obligations to us. Additionally, general shortages in the marketplace of certain raw materials or key components may adversely impact our business.
We do not control the time and resources that these suppliers devote to our business, and we cannot be sure that these 23 Table of Contents suppliers will perform their obligations to us. Additionally, general shortages in the marketplace of certain raw materials or key components may adversely impact our business.
The United 10 Table of Contents States Government has imposed, and in the future may impose, restrictions on shipments to some of our current customers. Government restrictions on sales to certain foreign customers will reduce our revenue and profit related to those customers in the short term and could have a potential long-term impact.
The United States Government has imposed, and in the future may impose, restrictions on shipments to some of our current customers. Government restrictions on sales to certain foreign customers will reduce our revenue and profit related to those customers in the short term and could have a potential long-term impact.
Hiring and retaining qualified personnel is critical to our business, and competition for experienced employees in our industry can be intense. As a global company, this issue is not limited to the United States, but includes our other locations such as Europe and Asia.
Hiring and retaining qualified personnel is critical to our business, and competition for experienced employees in our industry can be intense. As a global company, this issue is not limited to the United States but includes our other locations where we do business such as Europe and Asia.
General trade tensions between the United States and China continue, and any economic and political uncertainty caused by the United States tariffs imposed on goods from China, among other potential countries, and any corresponding tariffs or currency devaluations from China or such other countries in response, has negatively impacted, and may in the future negatively impact, demand and/or increase the cost for our products.
General trade tensions between the United States and China are expected to continue, and economic and political uncertainty caused by the United States tariffs imposed on goods from China, among other countries, and any corresponding tariffs or currency devaluations from China or such other countries in response, has negatively impacted, and may in the future negatively impact, demand and/or increase the cost for our products.
In fiscal 2024, 86% of our revenue was from outside the United States and we expect that revenue from international sales will continue to represent a significant portion of our total revenue. As such, a significant slowdown or instability in relevant foreign economies or lower investments in new infrastructure could have a negative impact on our sales.
In fiscal 2025, 82% of our revenue was from outside the United States and we expect that revenue from international sales will continue to represent a significant portion of our total revenue. As such, a significant slowdown or instability in relevant foreign economies or lower investments in new infrastructure could have a negative impact on our sales.
If our products do not meet these standards, we may be required to replace or rework the products. In some cases, our products may contain undetected defects or flaws that only become evident after shipment and installation.
If our products do not meet these standards, we may be required to replace or rework the products. 25 Table of Contents In some cases, our products may contain undetected defects or flaws that only become evident after shipment and installation.
Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management and other employees. Item 1B. Unresolved Staff Comments Not applicable.
Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management and other employees. Item 1B. Unresolved Staff Comments Not applicable. 36 Table of Contents
Our stock price may be volatile. Historically, our common stock has experienced substantial price volatility, particularly as a result of significant fluctuations in our revenue, earnings and margins over the past few years, and variations between our actual financial results and the published expectations of analysts.
Our stock price has experienced and may continue to experience volatility. Historically, our common stock has experienced substantial price volatility, particularly as a result of significant fluctuations in our revenue, earnings and margins over the past few years, and variations between our actual financial results and the published expectations of analysts.
The Indenture governing the 2030 Senior Notes (the 2030 Senior Notes Indenture) includes a liquidity maintenance financial covenant requiring us to have an aggregate amount of unrestricted cash and cash equivalents maintained in accounts over which the trustee and collateral agent for the 2030 Senior Notes has been granted a perfected first lien security interest of at least $500 million as of the last day of any calendar month, which amount will be reduced over time upon the fulfillment of certain conditions.
The 2030 Senior Notes Indenture includes a liquidity maintenance financial covenant requiring us to have an aggregate amount of unrestricted cash and cash equivalents maintained in accounts over which the trustee and collateral agent for the Senior Secured Notes has been granted a perfected first lien security interest of at least $750 million as of the last day of any calendar month ending after April 1, 2025, which amount will be reduced over time upon the fulfillment of certain conditions.
We are also subject to other types of risks of doing business internationally, including the following: • protection of intellectual property and trade secrets; • tariffs, customs, trade sanctions, trade embargoes and other barriers to importing/exporting materials and products in a cost-effective and timely manner, or changes in applicable tariffs or custom rules, such as the additional customs duties incurred related to our former Lighting Products business unit; • the burden of complying with and changes in United States or international taxation policies; • timing and availability of export licenses; • rising labor costs; • disruptions in or inadequate infrastructure of the countries where we operate; • the impact of public health epidemics on employees and the global economy; • difficulties in collecting accounts receivable; • difficulties in staffing and managing international operations; and • the burden of complying with foreign and international laws and treaties.
We are also subject to other types of risks of doing business internationally, including the following: • protection of intellectual property and trade secrets; • tariffs, customs, trade sanctions, trade embargoes and other barriers to importing/exporting materials and products in a cost-effective and timely manner, or changes in applicable tariffs or custom rules, such as tariffs announced by the 19 Table of Contents Trump administration and retaliatory tariffs implemented by other countries in response and the additional customs duties incurred in fiscal 2024 related to our former Lighting Products business unit; • the burden of complying with and changes in United States or international taxation policies; • timing and availability of export licenses; • rising labor costs; • disruptions in or inadequate infrastructure of the countries where we operate; • the impact of public health epidemics on employees and the global economy; • difficulties in collecting accounts receivable; • difficulties ensuring compliance with contracts; • difficulties in staffing and managing international operations; and • the burden of complying with foreign and international laws and treaties.
For example, in fiscal and calendar 2024, we and other semiconductor companies experienced, and have been continuing to experience, softer demand for power products in industrial and energy applications than expected. In response, we adjusted our production mix in our North Carolina fab to manufacture power products for automotive applications, which have higher unit costs in this fab.
For example, in fiscal 2024 and fiscal 2025, we and other semiconductor companies experienced and have continued to experience softer demand for our products than expected. In response, we adjusted our production mix in our North Carolina fab to manufacture power products for automotive applications, which have higher unit costs in this fab.
If we choose to enter into such strategic transactions, we face certain risks including: • the inability to realize the expected benefits, both from a timing and amount perspective, from our ongoing and planned capacity expansions, including the construction of a new materials manufacturing facility in Siler City, North Carolina, the planned construction of a new 200mm capable silicon carbide device fabrication facility in Saarland, Germany and the renovation of an epitaxy facility in Farmers Branch, Texas; • the failure of an acquired business, investee or joint venture to meet our performance and financial expectations; • identification of additional liabilities relating to an acquired business; • loss of customers due to perceived conflicts or competition with such customers or due to regulatory actions taken by governmental agencies; • that we are not able to enter into acceptable contractual arrangements in connection with the transaction; • difficulty integrating an acquired business's operations, personnel and financial and operating systems into our current business; • that we are not able to develop and expand customer bases and accurately anticipate demand from end customers, which can result in increased inventory and reduced orders if we experience wide fluctuations in supply and demand; • diversion of management's attention; • difficulty separating the operations, personnel and financial and operating systems of a spin-off or divestiture from our current business; • the possibility we are unable to complete the transaction and expend substantial resources without achieving the desired benefit; • the inability to obtain required regulatory agency approvals; • reliance on a transaction counterparty for transition services for an extended period of time, which may result in additional expenses and delay the integration of the acquired business and realization of the desired benefit of the transaction; • uncertainty of the financial markets or circumstances that cause conditions that are less favorable and/or different than expected; and • expenses incurred to complete a transaction may be significantly higher than anticipated.
If we choose to enter into such strategic transactions, we face certain risks including: • the inability to realize the expected benefits, both from a timing and amount perspective, from our ongoing and planned capacity expansions, including the expansion of a new materials manufacturing facility in Siler City, North Carolina; • the failure of an acquired business, investee or joint venture to meet our performance and financial expectations; • identification of additional liabilities relating to an acquired business; • loss of customers due to perceived conflicts or competition with such customers or due to regulatory actions taken by governmental agencies; • that we are not able to enter into acceptable contractual arrangements in connection with the transaction; • difficulty integrating an acquired business's operations, personnel and financial and operating systems into our current business; • that we are not able to develop and expand customer bases and accurately anticipate demand from end customers, which can result in increased inventory and reduced orders if we experience wide fluctuations in supply and demand; • diversion of management's attention; • difficulty separating the operations, personnel and financial and operating systems of a spin-off or divestiture from our current business; • the possibility we are unable to complete the transaction and expend substantial resources without achieving the desired benefit; • the inability to obtain required regulatory agency approvals; • reliance on a transaction counterparty for transition services for an extended period of time, which may result in additional expenses and delay the integration of the acquired business and realization of the desired benefit of the transaction; • uncertainty of the financial markets or circumstances that cause conditions that are less favorable and/or different than expected; and • expenses incurred to complete a transaction may be significantly higher than anticipated. 26 Table of Contents We may not be able to adequately address these risks or any other problems that arise from our prior or future acquisitions, investments, joint ventures, divestitures or spin-offs.
The number of usable items, or yield, from our production processes may fluctuate as a result of many factors, including but not limited to the following: • variability in our process repeatability and control; • contamination of the manufacturing environment; • equipment failure, power outages, fires, flooding, information or other system failures or variations in the manufacturing process, such as the equipment incident we experienced in our Durham fab in late fiscal 2024; • lack of consistency and adequate quality and quantity of piece parts, other raw materials and other bill of materials items; • inventory shrinkage or human errors; 13 Table of Contents • defects in production processes (including system assembly) either within our facilities or at our suppliers; and • any transitions or changes in our production process, planned or unplanned.
The number of usable items, or yield, from our production processes may fluctuate as a result of many factors, including but not limited to the following: • variability in our process repeatability and control; • contamination of the manufacturing environment; • equipment failure, power outages, fires, flooding, information or other system failures or variations in the manufacturing process, such as the equipment incident we experienced in our Durham fab in late fiscal 2024; • lack of consistency and adequate quality and quantity of piece parts, other raw materials and other bill of materials items; • inventory shrinkage or human errors; • defects in production processes (including system assembly) either within our facilities or at our suppliers; and • any transitions or changes in our production process, planned or unplanned. 22 Table of Contents In the past, we have experienced difficulties in achieving acceptable yields on certain products, which has adversely affected our operating results.
Therefore, these customers may alter their purchasing behavior with little or no notice to us for various reasons, including developing, or, in the case of our distributors, their customers developing, their own product solutions; choosing to purchase or distribute product from our competitors; incorrectly forecasting end market demand for their products; or experiencing a reduction in their market share in the markets for which they purchase our products.
Therefore, these customers may alter their purchasing behavior with little or no notice to us for various reasons, including developing, or, in the case of our distributors, their customers developing, their own product solutions; choosing to purchase or distribute product from our competitors; incorrectly forecasting end market demand for their products; altering their purchasing practices as a result of the Chapter 11 Cases and/or the implementation of the Plan; or experiencing a reduction in their market share in the markets for which they purchase our products.
Rules adopted by the SEC under the Dodd-Frank Wall Street Reform and Consumer Protection Act impose annual disclosure and reporting requirements for those companies who may use “conflict” minerals mined from the Democratic Republic of Congo and adjoining countries in their products.
Regulations related to conflict-free minerals may force us to incur additional expenses. Rules adopted by the SEC under the Dodd-Frank Wall Street Reform and Consumer Protection Act impose annual disclosure and reporting requirements for those companies who may use “conflict” minerals mined from the Democratic Republic of Congo and adjoining countries in their products.
Speculation and opinions in the press or investment community about our strategic position, financial condition, results of operations or significant transactions can also cause changes in our stock price.
Speculation and opinions in the press or investment community about our strategic position, financial condition, results of operations or significant transactions have caused, and may continue to cause changes in our stock price.
For example, the closing price per share of our common stock on the New York Stock Exchange ranged from a low of $22.08 to a high of $67.94 during the twelve months ended June 30, 2024. If our future operating results or margins are below the expectations of stock market analysts or our investors, our stock price will likely decline.
For example, the closing price per share of our common stock on the New York Stock Exchange ranged from a low of $0.41 to a high of $24.99 during the twelve months ended June 29, 2025. If our future operating results or margins are below the expectations of stock market analysts or our investors, our stock price will likely decline.
As a result of these risks, we may be unable to realize the anticipated benefits of the transaction, including the total amount of cash we expect to realize. Our failure to realize the anticipated benefits of the transaction would adversely impact our operations, financial condition and business and could limit our ability to pursue additional strategic transactions.
As a result, we may be unable to realize the anticipated benefits of these transactions. Our failure to realize the anticipated benefits of these transactions would adversely impact our financial condition and could limit our ability to pursue additional strategic transactions.
We face attempts by others to gain unauthorized access to our information technology systems on which we maintain proprietary and other confidential information and such attempts may increase in terms of frequency and severity in light of the sanctions imposed on Russia in response to its invasion of Ukraine.
We face attempts by others to gain unauthorized access to our information technology systems on which we maintain proprietary and other confidential information and such attempts may increase in terms of frequency and severity.
We are subject to risks associated with these transactions, including risks associated with any required payments of indemnification obligations under the Purchase Agreement with IDEAL and the Asset Purchase Agreement with SGH for retained liabilities and breaches of representations, warranties or covenants. As a result, we may be unable to realize the anticipated benefits of these transactions.
We are subject to risks associated with these transactions, including risks associated with any required payments of indemnification obligations under the Purchase Agreement with IDEAL, the Asset Purchase Agreement with SGH, and the RF Purchase Agreement with MACOM for retained liabilities and breaches of representations, warranties or covenants.
Restrictions on access to our manufacturing facilities or on our support operations or workforce, or similar limitations for our vendors and suppliers, and restrictions or disruptions of transportation, such as reduced availability of air transport, port closures, and increased border controls or closures in connection with future outbreaks of infectious diseases or similar public health events could limit our ability to meet customer demand, lead to increased costs and have a material adverse effect on our financial condition and results of operations.
Restrictions on access to our manufacturing facilities or on our support operations or workforce, or similar limitations for our vendors and suppliers, and restrictions or disruptions of transportation, such as reduced availability of air transport, port closures, and increased border controls or closures in connection with future outbreaks of infectious diseases or similar public health events could limit our ability to meet customer demand, lead to increased costs and have a material adverse effect on our financial condition and results of operations. 34 Table of Contents Risks relating to the adoption, use or application of emerging technologies, including AI, by our customers and in our business, may impact financial results and could result in reputational and financial harm and liability.
Our amended and restated bylaws also provide that, notwithstanding the foregoing, (x) the provisions described above will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction, and (y) unless we consent in writing to the selection of an alternative forum, the federal district courts shall, to the fullest extent permitted by law, be the exclusive forum for the resolution of any complaint asserting a cause of action against Wolfspeed or any director, officer, employee, or agent of Wolfspeed and arising under the Securities Act. 24 Table of Contents If a court were to find the choice of forum provision contained in our amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations, and financial condition.
Our amended and restated bylaws also provide that, notwithstanding the foregoing, (x) the provisions described above will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction, and (y) unless we consent in writing to the selection of an alternative forum, the federal district courts shall, to the fullest extent permitted by law, be the exclusive forum for the resolution of any complaint asserting a cause of action against Wolfspeed or any director, officer, employee, or agent of Wolfspeed and arising under the Securities Act.
Our operating results are substantially dependent on the acceptance of new products. Our future success may depend on our ability to deliver new, higher performing and/or lower cost solutions for existing and new markets and for customers to accept those solutions.
Our future success may depend on our ability to deliver new, higher performing and/or lower cost solutions for existing and new markets and for customers to accept those solutions.
Our future effective tax rates and our ability to obtain future tax credits may affect our results and financial condition due to a number of factors, including: • the jurisdiction in which profits are determined to be earned and taxed; • potential changes in tax laws or alterations in the interpretation of such tax laws and changes in generally accepted accounting principles, for example interpretations and United States regulations issued as a result of the significant changes to the United States tax law included within the Tax Cuts and Jobs Act of 2017 (the TCJA), the Coronavirus Aid, Relief and Economic Security Act of 2020 and the IRA; • changes in available tax credits, including the eligibility for or the receipt of the expected benefits from refundable investment tax credits obtained through the CHIPS Act; • the implementation of international tax and profit shifting rules in countries in which we operate, as recommended by the Organization for Economic Co-operation and Development’s Base Erosion, including the establishment of a minimum tax of 15% on global income; • the resolution of issues arising from tax audits with various authorities; • changes in the valuation of our deferred tax assets and liabilities; • adjustments to estimated taxes upon finalization of various tax returns; 20 Table of Contents • increases in expenses not deductible for tax purposes, including impairment of goodwill in connection with acquisitions; • the recognition and measurement of uncertain tax positions; • variations in realized tax deductions for certain stock-based compensation awards (such as restricted stock) from those originally anticipated; and • the repatriation of non-United States earnings for which we have not previously provided for taxes or any changes in legislation that may result in these earnings being taxed, regardless of our decision regarding repatriation of funds.
Our future effective tax rates and our ability to obtain future tax credits may affect our results and financial condition due to a number of factors, including: • the jurisdiction in which profits are determined to be earned and taxed; • potential changes or expirations in tax laws or alterations in the interpretation of such tax laws and changes in generally accepted accounting principles, for example the changes in tax laws under the recently enacted Public Law No: 119-21, informally known as the "One Big Beautiful Bill Act" (the "OBBBA"), including state and local tax conformity to the OBBBA; • changes or recapture of available tax credits, including our eligibility for or the receipt of the expected benefits from refundable investment tax credits obtained under the AMIC; • the limitation on the utilization of federal and state NOL carryforwards following certain ownership changes (as defined by Section 382 of the Code); • the implementation of international tax and profit shifting rules in countries in which we operate, as recommended by the Organization for Economic Co-operation and Development’s Base Erosion, including the establishment of a minimum tax of 15% on global income; • the resolution of issues arising from tax audits with various authorities; • changes in the valuation of our deferred tax assets and liabilities; • adjustments to estimated taxes upon finalization of various tax returns; • increases in expenses not deductible for tax purposes, including impairment of goodwill in connection with acquisitions or charges associated with the Chapter 11 Cases; • the recognition and measurement of uncertain tax positions; • variations in realized tax deductions for certain stock-based compensation awards (such as restricted stock) from those originally anticipated; and • the repatriation of non-United States earnings for which we have not previously provided for taxes or any changes in legislation that may result in these earnings being taxed, regardless of our decision regarding repatriation of funds.
The restrictions imposed by the 2030 Senior Notes Indenture, the Convertible Notes Indentures, and the CRD Agreement could limit our ability to plan for or react to changing business conditions, or could otherwise restrict our business activities and plans.
The restrictions imposed by the 2030 Senior Notes Indenture, the Convertible Notes Indentures, and the CRD Agreement could limit our ability to plan for or react to changing business conditions or could otherwise restrict our business activities and plans. The filing of the Chapter 11 Cases constituted events of default that accelerated our obligations under the Indentures.
Changes in regulatory, geopolitical, social, economic, or monetary policies and other factors, including those which may result from the outcome of the 2024 United States Presidential election, if any, may have a material adverse effect on our business in the future, or may require us to exit a particular market or significantly modify our current business practices.
Changes in regulatory, geopolitical, social, economic, or monetary policies and other factors may have a material adverse effect on our business in the future or may require us to exit a particular market or significantly modify our current business practices.
For example, the TCJA included a one-time tax on deemed repatriated earnings of non-United States subsidiaries. Any significant increase or decrease in our future effective tax rates could impact net (loss) income for future periods. In addition, the determination of our income tax provision requires complex estimations, significant judgments and significant knowledge and experience concerning the applicable tax laws.
Any significant increase or decrease in our future effective tax rates could impact net (loss) income for future periods. In addition, the determination of our income tax provision requires complex estimations, significant judgments and significant knowledge and experience concerning the applicable tax laws.
Although we believe we have adequate liquidity and capital resources to fund our operations for at least the next 12 months, we expect to need additional funding to fully complete all of our intended expansion initiatives, which we may seek to obtain through, among other avenues, government funding in both the United States and Europe, public or private equity offerings, and debt financings (which may involve retiring, refinancing, or modifying some of our existing debt).
Assuming we successfully emerge from the Chapter 11 Cases and implement the Plan, and although we believe we will have adequate liquidity and capital resources to fund our operations for at least the next 12 months, we expect to need additional funding to fully complete all of our intended expansion initiatives, which we may seek to obtain through, among other avenues, federal funding opportunities, equity offerings or other non-debt funding sources, and debt financings (which may involve retiring, refinancing or modifying some of our existing debt).
As customer demand for our products changes, we must be able to adjust our production capacity to meet demand. We are continually taking steps to address our manufacturing capacity needs for our products. Currently, we are focusing on increasing production capacity that utilizes 200mm substrates.
As customer demand for our products changes, we must be able to adjust our production capacity to meet demand. We are continually taking steps to address our manufacturing capacity needs for our products. Currently, we are focused on the acceleration of the transition of our offerings from 150mm to 200mm substrates.
Such methods, estimates and judgments are, by their nature, subject to substantial risks, uncertainties and assumptions, and factors may arise over time that lead us to change our methods, estimates and judgments.
Such methods, estimates and judgments are, by their nature, subject to substantial risks, uncertainties and assumptions, and factors may arise over time that lead us to change our methods, estimates and judgments. Changes in those methods, estimates and judgments could significantly affect our results of operations or financial condition.
We have experienced product quality, performance or reliability problems from time to time and defects or failures may occur in the future. If failures or defects occur, they could result in significant losses or product recalls.
We have experienced product quality, performance or reliability problems from time to time and defects or failures may occur in the future. If failures or defects occur, they could result in significant losses or product recalls. A significant product recall could also result in adverse publicity, damage to our reputation and a loss of customer confidence in our products.
In the past, we have experienced decreases in our production yields when suppliers have varied from previously agreed upon specifications or made other modifications we did not specify, which impacted our cost of revenue. Additionally, the inability of our suppliers to access capital efficiently could cause disruptions in their businesses, thereby negatively impacting ours.
In the past, we have experienced decreases in our production yields when suppliers have varied from previously agreed upon specifications or made other modifications we did not specify, which impacted our cost of revenue.
Risks related to legal, regulatory, accounting, tax and compliance matters We may be required to recognize a significant charge to earnings if our goodwill or other assets become impaired. Goodwill and other assets are reviewed for impairment annually and when events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.
The Company intends to vigorously defend against the claims in the above-referenced actions. We may be required to recognize a significant charge to earnings if our assets become impaired. Long-lived and other assets are reviewed for impairment annually and when events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.
Increased warranty claims could result in significant losses due to a rise in warranty expense and costs associated with customer support. As a result of our continued expansion into new markets, we may compete with existing customers who may reduce their orders. We continue to expand into new markets and new market segments.
As a result of our continued expansion into new markets, we may compete with existing customers who may reduce their orders. We continue to expand into new markets and new market segments.
In order to manage our growth and business strategy effectively relative to the uncertain pace of adoption, we must continue to: • maintain, expand, construct and purchase adequate manufacturing facilities and equipment, as well as secure sufficient third-party manufacturing resources, to meet customer demand, including specifically the expansion of our 11 Table of Contents silicon carbide capacity with ramping of our state-of-the-art, automated 200mm capable silicon carbide device fabrication facility in New York, an expansion of our materials factory in Durham, North Carolina, the construction of a new materials manufacturing facility in Siler City, North Carolina, the renovation of an epitaxy facility in Farmers Branch, Texas, and the planned construction of a new 200mm capable silicon carbide device fabrication facility in Saarland, Germany; • meet our production capacity and delivery commitments to our customers, including those customers who provide us with capacity reservation deposits or similar payments; • manage an increasingly complex supply chain (including managing the impacts of ongoing supply constraints in the semiconductor industry and meeting purchase commitments under take-or-pay arrangements with certain suppliers) that has the ability to supply an increasing number of raw materials, subsystems and finished products with the required specifications and quality, and deliver on time to our manufacturing facilities, our third-party manufacturing facilities, our logistics operations, or our customers; • expand the skills and capabilities of our current management team; • add experienced senior level managers and executives; • attract and retain qualified employees; • expand the capability of our information systems to support a more complex business, such as our ongoing implementation of a new company-wide enterprise resource planning (ERP) system; • be successful in securing design-ins across our end markets, including automotive applications; • realize our expected local, state and federal government incentives, including capital investment reimbursements, property tax reimbursements and sales tax exemptions from state, county and local governments; • finalize negotiations on a Preliminary Memorandum of Terms and, if an agreement can be reached, complete comprehensive due diligence, finalize award documentation, and fulfill all conditions and milestones for and receive the expected benefits from capital grants through the United States CHIPS and Science Act of 2022 (the CHIPS Act); • confirm our eligibility for and receive the expected benefits from refundable income tax credits through the CHIPS Act, and receive and potentially sell any tax credits for which we may apply under the Inflation Reduction Act; • access capital markets to fund our growth initiatives, including our ongoing and planned capacity expansions; • safeguard confidential information and protect our intellectual property; • manage organizational complexity and communication; and • execute, maintain and adjust the operational and financial controls that support our business.
In order to manage our growth and business strategy effectively relative to the uncertain pace of adoption, we must: • timely complete the Restructuring contemplated by the Plan and the Chapter 11 Cases to implement the Plan or otherwise address our outstanding indebtedness; • maintain, expand, construct and/or purchase adequate manufacturing facilities and equipment, as well as secure sufficient third-party manufacturing resources, including specifically the expansion of our silicon carbide capacity with the ramping of our state-of-the-art, automated 200mm capable silicon carbide device fabrication facility in New York and the ongoing construction of a new materials manufacturing facility in Siler City, North Carolina; • receive the expected benefits from the refundable Advanced Manufacturing Investment Credit ("AMIC") under Section 48D of the Internal Revenue Code of 1986, as amended (the "Code"); • meet our production capacity and delivery commitments to our customers, including those customers who provide us with capacity reservation deposits or similar payments; • manage an increasingly complex supply chain and meet purchase commitments under take-or-pay arrangements with certain suppliers that have the ability to supply an increasing number of raw materials, subsystems and finished products with the required specifications and quality, and deliver on time to our manufacturing facilities, our third-party manufacturing facilities, our logistics operations, or our customers; • manage the economic conditions around the commodities used in our business; • meet the volume and spend requirements for our long term electricity supply agreements; 20 Table of Contents • expand the skills and capabilities of our current management team; • retain and add experienced senior level managers and executives; • attract and retain qualified employees; • expand the capability of our information systems to support a more complex business, such as our ongoing implementation of a new company-wide enterprise resource planning ("ERP") system; • be successful in securing design-ins across our end markets, including automotive applications; • realize our expected local and state government incentives, including capital investment reimbursements, property tax reimbursements and sales tax exemptions from state, county and local governments; • continue to pursue potential federal funding opportunities; • access capital markets as needed to fund our growth initiatives; • safeguard confidential information and protect our intellectual property; • manage organizational complexity and communication; and • execute, maintain and adjust the operational and financial controls that support our business.
On December 2, 2023, we completed the sale of the RF Business to MACOM Technology Solutions Holdings, Inc. (MACOM) pursuant to the Asset Purchase Agreement dated August 22, 2023 (the RF Purchase Agreement).
("IDEAL"), on March 1, 2021, we completed the sale of our former LED Products business unit (the "LED Business") to SMART Global Holdings, Inc. ("SGH"), and on December 2, 2023, we completed the sale of the RF Business to MACOM Technology Solutions Holdings, Inc. ("MACOM") pursuant to the Asset Purchase Agreement dated August 22, 2023 (the "RF Purchase Agreement").
(Renesas America). Our ability to pay interest and repay the principal for any outstanding indebtedness under the Outstanding Convertible Notes, the 2030 Senior Notes and the CRD Agreement is dependent upon our ability to manage our business operations and generate sufficient cash flows to service such debt.
Our ability to pay interest and repay the principal for or to refinance any outstanding indebtedness under the Convertible Notes, the Senior Secured Notes and the CRD Agreement is dependent upon our ability to manage our business operations, generate sufficient cash flows to service such debt and/or raise additional capital, which is subject to economic, financial, competitive and other factors beyond our control.
Any failure to successfully evaluate strategic opportunities and address risks or other problems that arise related to any such business transaction could adversely affect our business, results of operations or financial condition. 17 Table of Contents We are subject to a number of risks associated with the sale of our former RF Business, and these risks could adversely impact our operations, financial condition and business.
Any failure to successfully evaluate strategic opportunities and address risks or other problems that arise related to any such business transaction could adversely affect our business, results of operations or financial condition.
We cannot predict, however, whether a license will be available; that we would find the terms of any license offered acceptable; or that we would be able to develop an alternative solution. Failure to obtain a necessary license or develop an alternative solution could cause us to incur substantial liabilities and costs and to suspend the manufacture of affected products.
We cannot predict, however, whether a license will be available; that we would find the terms of any license offered acceptable; or that we would be able to develop an alternative solution.
In a rising interest rate environment, debt financing will become more expensive and may have higher transactional and servicing costs. In addition, our existing indebtedness may limit our ability to obtain additional financing in the future.
If we incur additional debt, it may impose financial and operating covenants that could restrict the operations of our business. In a rising interest rate environment, debt financing would become more expensive and could have higher transactional and servicing costs. In addition, our then-existing indebtedness may limit our ability to obtain additional financing in the future.
For example, current global financial markets continue to reflect uncertainty, including as a result of the ongoing military conflict between Russia and Ukraine and the ongoing conflicts in the Middle East, as well as a slowdown of the economy in China, which could impact demand for our products used in industrial and energy applications.
For example, current global financial markets continue to reflect uncertainty, including as a result of the ongoing military conflict between Russia and Ukraine and the ongoing conflicts in the Middle East, as well as tariff policies announced by the Trump administration and ongoing trade tensions between certain countries including the United States, the EU and China, which has impacted and could continue to impact demand for our products.
If our defenses are ultimately unsuccessful or if we are unable to achieve a favorable resolution, we could be liable for damage awards that could materially affect our results of operations and financial condition. Where necessary, we may initiate litigation to enforce our patent or other intellectual property rights, which could adversely impact our relationship with certain customers.
If our defenses are ultimately unsuccessful or if we are unable to achieve a favorable resolution, we could be liable for damage awards that could materially affect our results of operations and financial condition.
Given these uncertainties, there could be further disruptions to the global economy, financial markets and consumer confidence. If economic conditions deteriorate unexpectedly, our business and results of operations could be materially and adversely affected.
Given these uncertainties, there could be further disruptions to the global economy, financial markets and consumer confidence. If economic conditions deteriorate unexpectedly, our business and results of operations could be materially and adversely affected. The Trump administration is also ending the EV credit and has positioned against solar and other similar projects, which could leverage out some of our technology.
If unfavorable capital market conditions exist, we may not be able to raise sufficient capital on favorable terms and on a timely basis, if at all.
If unfavorable capital market conditions exist, we may not be able to raise sufficient capital or restructure or refinance our outstanding convertible notes on favorable terms and on a timely basis, if at all, which would impact our ability to access federal funding and/or raise additional capital.
To the extent our income tax liability materially differs from our income tax provisions due to factors, including the above, which were not anticipated at the time we estimated our tax provision, our net (loss) income or cash flows could be affected. Failure to comply with applicable environmental laws and regulations worldwide could harm our business and results of operations.
To the extent our income tax liability materially differs from our income tax provisions due to factors, including the above, which were not anticipated at the time we estimated our tax provision, our net (loss) income or cash flows could be affected. Additionally, in July of 2025, the OBBBA was signed into law.
In some instances, we have received and may continue to receive incentives from foreign governments to encourage our investment in certain countries, regions or areas outside of the United States. Government incentives may include tax rebates, reduced tax rates, favorable lending policies and other measures, some or all of which may be available to us due to our foreign operations.
Government incentives may include tax rebates, reduced tax rates, favorable lending policies and other measures, some or all of which may be available to us due to our foreign operations.
For example, if our supply or customer arrangements are disrupted due to expanded sanctions or involvement of countries where we have operations or relationships, our business could be materially disrupted. Further, the use of cyberattacks could expand as part of the conflict, which could adversely affect our ability to maintain or enhance our cyber-security and data protection measures.
For example, if our supply or customer arrangements are disrupted due to expanded sanctions or involvement of countries where we have operations or relationships, our business could be materially disrupted.
The establishment and operation of a new manufacturing facility or expansion of an existing facility involves significant risks and challenges, some of which we have experienced and may experience in the future, including, but not limited to, the following: • design and construction delays and cost overruns; • issues in installing and qualifying new equipment and ramping production; • poor production process yields and reduced quality control; and • insufficient personnel with requisite expertise and experience to operate an automated silicon carbide device fabrication facility and a materials manufacturing facility. 12 Table of Contents We are also increasingly dependent on information technology to enable us to improve the effectiveness of our operations and to maintain financial accuracy and efficiency.
The establishment and operation of a new manufacturing facility or expansion of an existing facility involves significant risks and challenges, some of which we have experienced and may experience in the future, including, but not limited to, the following: • poor production process yields and reduced quality control; • insufficient personnel with requisite expertise and experience to operate an automated silicon carbide device fabrication facility and a materials manufacturing facility; and • issues in installing new equipment and ramping production; If we receive government incentives through federal funding opportunities, or through state and local grants, the restrictions and operational requirements that are associated with such grants would add complexity to our operations and increase our costs.
We provide standard warranty periods of 90 days on our products, with longer periods under a limited number of customer contracts. Although we believe our reserves are appropriate, we are making projections about the future reliability of new products and technologies, and we may experience increased variability in warranty claims.
Although we believe our reserves are appropriate, we are making projections about the future reliability of new products and technologies, and we may experience increased variability in warranty claims. Increased warranty claims could result in significant losses due to a rise in warranty expense and costs associated with customer support.
Changes in our effective tax rate or the ability to obtain future tax credits may affect our results and financial condition.
Our ability and the ability of our competitors to meet evolving government and/or industry requirements could impact competitive dynamics in the market. 31 Table of Contents Changes in our effective tax rate or the ability to obtain future tax credits may affect our results and financial condition.
We also commenced work on our new materials manufacturing facility in Siler City, North Carolina in the first quarter of fiscal 2023. In addition, we purchased and began renovating an existing epitaxy facility in Farmers Branch, Texas in the fourth quarter of fiscal 2023.
We also commenced work on our new materials manufacturing facility in Siler City, North Carolina in the first quarter of fiscal 2023, and the construction of the buildings and critical infrastructure was substantially completed in late fiscal 2025.
In some instances, we may offer products for future delivery at prices based on planned yield improvements or increased cost efficiencies from other production advances. Failure to achieve these planned improvements or advances could have a significant impact on our margins and operating results.
We may experience similar problems in the future, and we cannot predict when they may occur or their severity. In some instances, we may offer products for future delivery at prices based on planned yield improvements or increased cost efficiencies from other production advances.
However, these investments are generally not Federal Deposit Insurance Corporation insured and may lose value and/or become illiquid regardless of their credit rating. In addition, we currently hold the MACOM Shares that we acquired in connection with the RF Business Divestiture.
However, these investments are generally not Federal Deposit Insurance Corporation insured and may lose value and/or become illiquid regardless of their credit rating. From time to time, we have also made investments in public and private companies that engage in complementary businesses.
We have been subject to shareholder activism and may be subject to such activism in the future, which could result in substantial costs and divert management’s and our board’s attention and resources from our business. For example, on April 22, 2024, JANA Partners LLC delivered a letter to our board of directors calling for a comprehensive review of strategic alternatives.
In the past, we have been subject to shareholder activism and may be subject to such activism in the future with our decline in share price, which could result in substantial costs and divert management's and our board's attention and resources from our business.
A significant product recall 16 Table of Contents could also result in adverse publicity, damage to our reputation and a loss of customer confidence in our products. We also may be the target of product liability lawsuits against us if the use of our products at issue is determined to have caused injury or contained a substantial product hazard.
We also may be the target of product liability lawsuits against us if the use of our products at issue is determined to have caused injury or contained a substantial product hazard. We provide standard warranty periods of 90 days on our products, with longer periods under a limited number of customer contracts.
As of June 30, 2024, our indebtedness consisted of $575.0 million aggregate principal amount of our 1.75% convertible senior notes due May 1, 2026 (the 2026 Notes), $750.0 million aggregate principal amount of our 0.25% convertible senior notes due February 15, 2028 (the 2028 Notes), $1,750.0 million aggregate principal amount of our 1.875% convertible senior notes due December 1, 2029 (the 2029 Notes, and together with the 2026 Notes and the 2028 Notes collectively, the Outstanding Convertible Notes), $1,250.0 million aggregate principal amount of senior secured notes due 2030 (the 2030 Senior Notes) and an aggregate principal amount of $2,000.0 million of deposits under the Unsecured Customer Refundable Deposit Agreement (the CRD Agreement) with Renesas Electronics America Inc.
As of June 29, 2025, our indebtedness consisted of $575.0 million aggregate principal amount of our 2026 Notes, $750.0 million aggregate principal amount of our 2028 Notes, $1,750.0 million aggregate principal amount of our 2029 Notes and $1,521.2 million aggregate principal amount of Senior Secured Notes and an aggregate principal amount of $2,062.0 million of deposits under the CRD Agreement with Renesas.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWolfspeed’s Senior Director of Information Security leads our InfoSec GRC organization and is responsible for the implementation, operation, and monitoring of our cybersecurity risk management program. Our Senior Director of Information Security reports to the CIO, who reports to the Executive Vice President, Chief Financial Officer.
Biggest changeWolfspeed’s VP, Chief Information Security Officer (the "CISO"), with over 25 years of experience in Fortune 500 companies including in aspects of IT, infrastructure, information security including multiple CISO roles, and certifications across IT and information security, leads our InfoSec GRC organization and is responsible for the implementation, operation, and monitoring of our cybersecurity risk management program.
Partnering with external entities allows us to leverage specialized knowledge and insights, better ensuring our cybersecurity strategies and processes are well-designed and effective. For example, in 2023 we engaged a global cybersecurity leader to conduct an external assessment of our Information Security program, which included consideration of the cybersecurity framework, organizational structure and collective capabilities.
Partnering with external entities allows us to leverage specialized knowledge and insights, better ensuring our cybersecurity strategies and processes are well-designed and effective. For example, in 2025 we engaged a global cybersecurity leader to conduct an external assessment of our Information Security program, which included consideration of the cybersecurity framework, organizational structure and collective capabilities.
Each team reports directly to the Senior Director of Information Security who is responsible for informing the CIO, information technology leadership and senior leadership teams on the prevention, detection, mitigation, and remediation of the program, including cybersecurity incidents. 26 Table of Contents
Each team reports directly to the Senior Director of Information Security who is responsible for informing the CIO, information technology leadership and senior leadership teams on the prevention, detection, mitigation, and remediation of the program, including cybersecurity incidents. 38 Table of Contents
Refer to Item 1A "Risk Factors" of this Annual Report for further discussion on cybersecurity risks. Governance The board of directors, as a whole, has oversight responsibility for our strategic and operational risks.
Refer to Part 1, Item 1A "Risk Factors" of this Annual Report for further discussion on cybersecurity risks. Governance The board of directors, as a whole, has oversight responsibility for our strategic and operational risks.
Responsible for assessing and managing our cyber risk management program, the InfoSec GRC organization is comprised of multiple teams that address and respond to cyber risk related to identification and access management, data protection, security architecture and engineering, security operations, insider threat, and cyber defense.
Our CISO reports to the CIO, who reports to the Chief Executive Officer. 37 Table of Contents Responsible for assessing and managing our cyber risk management program, the InfoSec GRC organization is comprised of multiple teams that address and respond to cyber risk related to identification and access management, data protection, security architecture and engineering, security operations, insider threat, and cyber defense.
The audit committee assists the board of directors with this responsibility by reviewing and discussing our risk program and practices, including cybersecurity risks, with members of senior leadership and management.
The audit committee assists the board of directors with this responsibility by reviewing and discussing our risk program and practices, including cybersecurity risks, with members of senior leadership and management. In turn, the audit committee periodically reports on its review to the full board of directors.
The CIO also briefs the audit committee on the effectiveness of Wolfspeed's cyber risk management program quarterly or in accordance with significant events. In addition, the board of directors is advised by our CIO on Wolfspeed's cybersecurity risk exposures and steps taken to monitor and mitigate cybersecurity risks.
In addition, the board of directors is advised by our CIO on Wolfspeed's cybersecurity risk exposures and steps taken to monitor and mitigate cybersecurity risks.
In turn, the audit committee periodically reports on its review to the full board of directors. 25 Table of Contents Our Chief Information Officer (CIO) meets at a regular cadence with a member of the board of directors who is the board’s cybersecurity designee.
Our Chief Information Officer (the "CIO") meets at a regular cadence with a member of the board of directors who is the board’s cybersecurity designee. The CIO also briefs the audit committee on the effectiveness of Wolfspeed's cyber risk management program quarterly or in accordance with significant events.
Removed
The Senior Director of Information Security has over 16 years of experience in the cybersecurity space and has completed advanced training in the fields of cybersecurity and technology.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Our corporate headquarters, primary research and development operations, and primary manufacturing operations are located within our Durham, North Carolina facilities that we own, which sits on 141 acres of owned land.
Biggest changeItem 2. Properties Our corporate headquarters, primary research and development operations, and primary manufacturing operations are located within our Durham, North Carolina facilities. We also outsource the assembly and testing of certain products at contract manufacturing facilities throughout Asia. We maintain captive lines at some of our contract manufacturers.
Details on our owned and leased facilities with significant operating activities as of June 30, 2024 are as follows: Location Principal Use Approximate square footage Owned Facilities Durham, North Carolina - Silicon Drive Site Administrative, Production and R&D 1,004,000 Marcy, New York Production 633,000 Research Triangle Park, North Carolina Production 179,000 Leased Facilities Durham, North Carolina - Moore Drive Production 162,000 Fayetteville, Arkansas R&D/Production 42,000
Details on our owned and leased facilities with significant operating activities as of June 29, 2025 are as follows: Location Principal Use Approximate square footage Owned Facilities Durham, North Carolina - Silicon Drive Site Administrative, Production and R&D 1,004,000 Marcy, New York Administrative and Production 632,000 Siler City, North Carolina Production 1,850,000 Leased Facilities Durham, North Carolina - Moore Drive Production 162,000 Fayetteville, Arkansas R&D/Production 41,000
We maintain captive lines at some of our contract manufacturers. We also maintain sales and support offices in leased office premises in North America, Asia, and Europe.
We also maintain sales and support offices in leased office premises in North America, Asia, and Europe.
Removed
Our products are also produced at owned manufacturing facilities located in Research Triangle Park (RTP), North Carolina and Marcy, New York and at leased facilities in Fayetteville, Arkansas, and Durham, North Carolina. Our RTP facility sits on 55 acres of owned land and our Marcy, New York facility sits on 55 acres of leased land.
Added
During fiscal 2025, we sold our existing facility in Farmers Branch, Texas, which was intended for use for epitaxy production, and our production facility in Research Triangle Park, North Carolina, which we had previously agreed to lease to MACOM in connection with the sale of the RF Business.
Removed
In fiscal 2023, we purchased an existing facility in Farmers Branch, Texas, which will be used for epitaxy production. We are in the process of constructing our materials manufacturing facility in Siler City, North Carolina, which sits on 446 acres of owned land. Some of our products are also produced at contract manufacturing facilities throughout Asia.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings The information required by this item is set forth under Note 15, “Commitments and Contingencies,” in our consolidated financial statements included in Item 8 of this Annual Report and is incorporated herein by reference. Item 4. Mine Safety Disclosures Not applicable. 27 Table of Contents PART II
Biggest changeLegal Proceedings The information required by this item is set forth under Part II, Item 8, Note 2 - "Basis of Presentation and Summary of Significant Accounting Policies - Restructuring Support Agreement and Chapter 11 Cases" and Note 14, “Commitments and Contingencies,” in our consolidated financial statements included in Item 8 of this Annual Report and is incorporated herein by reference.
Added
Item 4. Mine Safety Disclosures Not applicable. 39 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+0 added−0 removed4 unchanged
Biggest changeThe following graph and related table compare the cumulative total return on our common stock with the cumulative total returns of the Nasdaq Composite Index and the Philadelphia Semiconductor Index, assuming an investment of $100.00 on June 28, 2019 and the reinvestment of dividends. 6/28/2019 6/28/2020 6/27/2021 6/26/2022 6/25/2023 6/30/2024 Wolfspeed, Inc. $100.00 $102.78 $175.49 $127.09 $88.01 $40.50 Nasdaq Composite Index 100.00 123.12 182.53 148.57 174.25 230.80 Philadelphia Semiconductor Index 100.00 134.13 229.27 194.74 254.85 402.02 Sale of Unregistered Securities There were no unregistered securities sold during fiscal 2024. 28 Table of Contents Dividends In the past, we have not declared or paid cash dividends on our common stock.
Biggest changeThe following graph and related table compare the cumulative total return on our common stock with the cumulative total returns of the Nasdaq Composite Index and the Philadelphia Semiconductor Index, assuming an investment of $100.00 on June 26, 2020 and the reinvestment of dividends. 6/26/2020 6/27/2021 6/26/2022 6/25/2023 6/30/2024 6/29/2025 Wolfspeed, Inc. $100.00 $170.75 $123.66 $85.63 $39.41 $0.72 Nasdaq Composite Index 100.00 148.25 120.67 141.53 187.46 215.81 Philadelphia Semiconductor Index 100.00 170.93 145.19 190.01 299.72 306.52 Sale of Unregistered Securities There were no unregistered securities sold during fiscal 2025. 40 Table of Contents Dividends In the past, we have not declared or paid cash dividends on our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Common Stock Market Information Our common stock is traded on the New York Stock Exchange under the trading symbol WOLF. There were 226 holders of record of our common stock as of August 16, 2024.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Common Stock Market Information Our common stock is traded on the New York Stock Exchange under the trading symbol WOLF. There were 207 holders of record of our common stock as of August 20, 2025.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

63 edited+99 added−69 removed55 unchanged
Biggest changeCosts related to the Mohawk Valley Fab for fiscal year 2023 and fiscal year 2022 were classified as operating expenses within factory start-up costs. • Operating loss from continuing operations was $445.3 million in fiscal 2024 as compared to $311.8 million in fiscal 2023. • Diluted loss per share from continuing operations was $4.56 in fiscal 2024 as compared to $2.09 in fiscal 2023. • Combined cash, cash equivalents and short-term investments decreased to $2,174.6 million at June 30, 2024 from $2,954.9 million at June 25, 2023. • Long-term debt, net, including convertible notes, was $6,161.1 million at June 30, 2024 and $4,175.1 million at June 25, 2023. • Net cash used in operating activities of continuing operations was $671.3 million in fiscal 2024 as compared to $102.2 million in fiscal 2023. • Purchases of property and equipment, net were $2,095.5 million (net of $178.5 million in reimbursements) in fiscal 2024 as compared to $794.1 million (net of $155.5 million in reimbursements) in fiscal 2023. • Design-ins were $9.1 billion in fiscal 2024 as compared to $7.9 billion in fiscal 2023. • Design-wins were $5.8 billion in fiscal 2024 as compared to $1.8 billion in fiscal 2023.
Biggest changeOperating loss for fiscal 2025 includes approximately $402.2 million of restructuring and related costs, $359.2 million of goodwill impairment charges, and $55.8 million of pre-petition charges relating to the Chapter 11 Cases. • Combined cash, cash equivalents and short-term investments decreased to $955.4 million at June 29, 2025 from $2,174.6 million at June 30, 2024. ◦ Net cash used in operating activities of continuing operations was $711.7 million in fiscal 2025 as compared to $671.3 million in fiscal 2024.
Deferred Tax Asset Valuation Allowances In accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 740, “Income Taxes” (ASC 740), we evaluate all available evidence, both positive and negative, to determine whether, based on the weight of that evidence, a deferred tax asset is more likely than not to be realized.
Deferred Tax Asset Valuation Allowances In accordance with Financial Accounting Standards Board ("FASB") ASC 740, “Income Taxes” ("ASC 740"), we evaluate all available evidence, both positive and negative, to determine whether, based on the weight of that evidence, a deferred tax asset is more likely than not to be realized.
Innovations and advancements in materials and power technologies continue to expand the potential commercial application for our products. However, new technologies or standards could emerge or improvements could be made in existing technologies that could reduce or limit the demand for our products in certain markets. • Intellectual Property Issues.
Innovations and advancements in materials and power technologies continue to expand the potential commercial application for our products. However, new technologies or standards could emerge or improvements could be made in existing technologies that could reduce or limit the demand for our products in certain markets. 44 • Intellectual Property Issues.
(CreeLED and collectively with SGH, SMART) in fiscal 2021, we entered into a Wafer Supply and Fabrication Services Agreement (the Wafer Supply Agreement), pursuant to which we supply CreeLED with certain silicon carbide materials and fabrication services for up to four years.
("CreeLED" and collectively with SGH, "SMART") in fiscal 2021, we entered into a Wafer Supply and Fabrication Services Agreement (the "Wafer Supply Agreement"), pursuant to which we supplied CreeLED with certain silicon carbide materials and fabrication services for up to four years.
Sales, General and Administrative Sales, general and administrative (SG&A) expenses are comprised of costs primarily associated with our sales and marketing personnel and our executive and administrative personnel (for example, finance, human resources, information technology and legal) and substantially consist of salaries and related compensation costs; consulting and other professional services (such as litigation and other outside legal counsel fees, audit and other compliance costs); marketing and advertising expenses; facilities and insurance costs; and travel costs.
Sales, General & Administrative Sales, general and administrative ("SG&A") expenses are comprised of costs primarily associated with our sales and marketing personnel and our executive and administrative personnel (for example, finance, human resources, information technology and legal) and substantially consist of salaries and related compensation costs; consulting and other professional services (such as litigation and other outside legal counsel fees, pre-petition legal fees, audit and other compliance costs); marketing and advertising expenses; facilities and insurance costs; and travel costs.
Changes in trade policy, such as the imposition or extension of tariffs or export bans to specific customers or countries could reduce or limit demand for, or increase the cost of production of, our products in certain markets. • Technological Innovation and Advancement.
Changes in trade policy, such as the imposition or expansion of tariffs or export bans to specific customers or countries, could reduce or limit demand for, or increase the cost of production of, our products in certain markets. • Technological Innovation and Advancement.
We conduct impairment testing for goodwill at the reporting unit level. Reporting units, as defined by FASB ASC 350, “Intangibles - Goodwill and Other,” may be operating segments as a whole or an operation one level below an operating segment, referred to as a component. We have determined that we have one reporting unit.
We conduct impairment testing for goodwill at the reporting unit level. Reporting units, as defined by FASB ASC 350, “Intangibles - Goodwill and Other,” may be operating segments as a whole or an operation one level below an operating segment, referred to as a component.
We also analyze sales levels by product type, including historical and estimated future customer demand for those products to determine if any additional reserves are appropriate. For example, we adjust for items that are considered obsolete based upon changes in customer demand, manufacturing process changes or new product introductions that may eliminate demand for the product.
We also analyze sales levels by product type, including historical and estimated future customer demand for those products to determine if any additional reserves are appropriate. For example, we 57 Table of Contents adjust for items that are considered obsolete based upon changes in customer demand, manufacturing process changes or new product introductions that may eliminate demand for the product.
Revenue Recognition For the year ended June 30, 2024, approximately a quarter of our revenue was from sales to distributors. Distributors stock inventory and sell our products to their own customer base, which may include value added resellers, manufacturers who incorporate our products into their own manufactured goods, or ultimate end users of our products.
Revenue Recognition For the year ended June 29, 2025, approximately a third of our revenue was from sales to distributors. Distributors stock inventory and sell our products to their own customer base, which may include value added resellers, manufacturers who incorporate our products into their own manufactured goods, or ultimate end users of our products.
All of the potential changes noted below are based on sensitivity analysis performed on our financial positions at June 30, 2024 and June 25, 2023. Actual results may differ materially.
All of the potential changes noted below are based on sensitivity analysis performed on our financial positions at June 29, 2025 and June 30, 2024. Actual results may differ materially.
Demand also fluctuates based on various domestic and global economic and market cycles, continuously evolving industry supply chains, trade and tariff terms, and inflationary impacts, as well as evolving competitive dynamics in each of our respective markets. These uncertainties make demand difficult to forecast for us and our customers.
Demand also fluctuates based on various domestic and global economic and market cycles, continuously evolving industry supply chains, trade and tariff terms, and inflationary impacts, as well as evolving competitive dynamics in each of our respective markets. These uncertainties make demand difficult to forecast for us and our customers. Recently, we have been experiencing softening demand for our products.
If quoted market values on MACOM's common stock were to hypothetically decrease 10%, the fair value of the MACOM Shares would decrease by $7.9 million at June 30, 2024. Currency Rate and Price Risk All of our operations have a functional currency of the United States Dollar.
If quoted market values on MACOM's common stock were to hypothetically decrease 10%, the fair value of the MACOM Shares would decrease by $10.2 million at June 29, 2025. Currency Rate and Price Risk All of our operations have a functional currency of the United States Dollar.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Executive Summary The following discussion is designed to provide a better understanding of our audited consolidated financial statements and notes thereto, including a brief discussion of our business and products, key factors that impacted our performance and a summary of our operating results.
Executive Summary The following discussion is designed to provide a better understanding of our audited consolidated financial statements and notes thereto, including a brief discussion of our business and products, key factors that impacted our performance and a summary of our operating results.
We write-down our inventories for estimated obsolescence equal to the difference between the cost of the inventory and its estimated market value based upon an aging analysis of the inventory on hand, specifically known inventory-related risks (such as technological obsolescence), and assumptions about future demand.
We write-down our inventories for estimated obsolescence equal to the difference between the cost of the inventory and its net realizable value based upon an aging analysis of the inventory on hand utilizing specific reserve percentages, specifically known inventory-related risks (such as technological obsolescence), and assumptions about future demand.
Many companies have made significant investments in product development, production equipment and production facilities. To remain competitive, market participants must continuously increase product performance, reduce costs and develop improved ways to serve their customers.
Competition in the industries we serve is intense. Many companies have made significant investments in product development, production equipment and production facilities. To remain competitive, market participants must continuously increase product performance, reduce costs and develop improved ways to serve their customers.
As of June 30, 2024, we have $136.7 million of unrecognized compensation cost related to nonvested awards, which is expected to be recognized over a weighted average period of 2.42 years. We estimate expected forfeitures at the time of grant and revise this estimate, if necessary, in subsequent periods if actual forfeitures differ from initial estimates.
As of June 29, 2025, we have $74.6 million of unrecognized compensation cost related to nonvested awards, which is expected to be recognized over a weighted average period of 2.48 years. We estimate expected forfeitures at the time of grant and revise this estimate, if necessary, in subsequent periods if actual forfeitures differ from initial estimates.
The following discussion should be read in conjunction with our consolidated financial statements included in Item 8 of this Annual Report. Historical results and percentage relationships among any amounts in the financial statements are not necessarily indicative of trends in operating results for any future periods. Unless otherwise noted, the following information and discussion relates to our continuing operations.
The following discussion should be read in conjunction with our consolidated financial statements included in Part II, Item 8 of this Annual Report. Historical results and percentage relationships among any amounts in the financial statements are not necessarily indicative of trends in operating results for any future periods.
Dollars) June 30, 2024 June 25, 2023 June 26, 2022 2023 to 2024 2022 to 2023 Net (loss) income from discontinued operations ($290.6) ($69.4) $ 49.2 ($221.2) (319) % ($118.6) (241) % Net loss from discontinued operations in fiscal 2024 included a $204.0 million loss on sale of our former RF Business.
Dollars) June 29, 2025 June 30, 2024 June 25, 2023 2024 to 2025 2023 to 2024 Net loss from discontinued operations $— ($290.6) $ (69.4) $290.6 100 % ($221.2) (319) % Net loss from discontinued operations in fiscal 2024 included a $204.0 million loss on sale of our former RF Business.
We recognized a supply agreement liability in connection with this agreement, which reached full amortization in the second quarter of fiscal 2023. We expect losses from this agreement to continue through September 2024. 36 . Income Tax Expense Income tax expense and our effective tax rate was as follows: Fiscal Years Ended Year-Over-Year Change (in millions of U.S.
We recognized a supply agreement liability in connection with this agreement, which reached full amortization in the second quarter of fiscal 2023. We terminated the Wafer Supply Agreement effective as of September 30, 2024. 51 Income Tax Expense Income tax expense and our effective tax rate was as follows: Fiscal Years Ended Year-Over-Year Change (in millions of U.S.
In the first quarter of fiscal 2024, we entered into the CRD Agreement with Renesas America, pursuant to which Renesas America agreed to provide us up to $2 billion in unsecured deposits, subject to certain conditions.
In the first quarter of fiscal 2024, we entered into the CRD Agreement with Renesas, pursuant to which Renesas agreed to provide us up to $2.0 billion in unsecured deposits, which we received during fiscal 2024.
Factory Start-up Costs Fiscal Years Ended Year-Over-Year Change (in millions of U.S. Dollars) June 30, 2024 June 25, 2023 June 26, 2022 2023 to 2024 2022 to 2023 Factory start-up costs $53.8 $160.2 $70.0 ($106.4) (66) % $90.2 129 % Factory start-up costs relate to facilities that have not yet started revenue generating production.
Factory Start-up Costs Fiscal Years Ended Year-Over-Year Change (in millions of U.S. Dollars) June 29, 2025 June 30, 2024 June 25, 2023 2024 to 2025 2023 to 2024 Factory start-up costs $85.2 $53.8 $160.2 $31.4 58 % ($106.4) (66) % Factory start-up costs relate to facilities that have not yet started revenue generating production.
We may initiate goodwill impairment testing by considering qualitative factors to determine whether it is more likely than not that a reporting unit’s carrying value is greater than its fair value.
We have determined that we have one reporting unit. 59 Table of Contents We may initiate goodwill impairment testing by considering qualitative factors to determine whether it is more likely than not that a reporting unit’s carrying value is greater than its fair value.
If the carrying value of the reporting unit exceeds the fair value, we recognize an impairment loss in an amount equal to the excess, not to exceed the carrying value of the reporting unit ’ s goodwill.
If the fair value of a reporting unit exceeds its carrying value, then we conclude that no goodwill impairment has occurred. If the carrying value of the reporting unit exceeds the fair value, we recognize an impairment loss in an amount equal to the excess, not to exceed the carrying value of the reporting unit ’ s goodwill.
We have take-or-pay supplier agreements that require a minimum of $235.2 million of purchases over the next four years and a commitment to provide quarterly capacity reservation deposits with a remaining total of $21.6 million over the next 18 months, as outlined further in Note 15, "Commitments and Contingencies," to our consolidated financial statements in Item 8 of this Annual Report.
We will continue to have take-or-pay inventory supplier agreements that require a minimum of $202.1 million of purchases over the next four years and a commitment to provide quarterly capacity reservation deposits with a remaining total of $3.5 million over the next 3 months, as outlined further in Note 14, "Commitments and Contingencies," to our consolidated financial statements in Part II, Item 8 of this Annual Report.
ASC 740 states that a tax benefit should not be recognized for financial statement purposes for an uncertain tax filing position where it is not more likely than not (likelihood of greater than 50%) of being sustained by the taxing authorities based on the technical merits of the position. 42 Table of Contents In accordance with the provisions of ASC 740, we establish unrecognized tax benefits (as a reduction to the deferred tax asset or as an increase to other liabilities) to reduce some or all of the tax benefit of any of our tax positions at such time that we determine the position has become uncertain based upon one of the following conditions: the tax position is not “more likely than not” to be sustained; the tax position is “more likely than not” to be sustained, but for a lesser amount; or the tax position is “more likely than not” to be sustained, but not in the financial period in which the tax position was originally taken.
In accordance with the provisions of ASC 740, we establish unrecognized tax benefits (as a reduction to the deferred tax asset or as an increase to other liabilities) to reduce some or all of the tax benefit of any of our tax positions at such time that we determine the position has become uncertain based upon one of the following conditions: the tax position is not “more likely than not” to be sustained; the tax position is “more likely than not” to be sustained, but for a lesser amount; or the tax position is “more likely than not” to be sustained, but not in the financial period in which the tax position was originally taken.
Accordingly, our liquidity and capital resources are not subject to off-balance sheet risks from unconsolidated entities. As of June 30, 2024, we did not have any off-balance sheet arrangements, as defined in Item 303(b) of SEC Regulation S-K. Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with U.S. GAAP. In the application of U.S.
As of June 29, 2025, we did not have any off-balance sheet arrangements, as defined in Item 303(b) of SEC Regulation S-K. Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with U.S. GAAP. In the application of U.S.
The increase in net cash used in investing activities in fiscal 2024 as compared to fiscal 2023 was primarily due to an increase in net property and equipment purchases of $1,301.4 million, partially offset by an increase in net proceeds from maturities and sales of short-term investments.
The decrease in net cash used in investing activities in fiscal 2025 as compared to fiscal 2024 was primarily due to a decrease in net property and equipment purchases of $1,064.5 million, a decrease in purchases of short term investments and a decrease in net proceeds from maturities and sales of short-term investments.
Dollars, except share data) Amount % of Revenue Amount % of Revenue Amount % of Revenue Revenue, net $807.2 100.0 % $758.5 100.0 % $572.1 100.0 % Cost of revenue, net 729.8 90.4 % 515.6 68.0 % 364.0 63.6 % Gross profit 77.4 9.6 % 242.9 32.0 % 208.1 36.4 % Research and development 201.9 25.0 % 165.7 21.8 % 142.6 24.9 % Sales, general and administrative 246.4 30.5 % 214.3 28.3 % 183.0 32.0 % Factory start-up costs 53.8 6.7 % 160.2 21.1 % 70.0 12.2 % Amortization of acquisition-related intangibles 1.1 0.1 % 1.7 0.2 % 2.2 0.4 % Loss (gain) on disposal or impairment of other assets 1.2 0.1 % 2.0 0.3 % (0.3) (0.1) % Other operating expense 18.3 2.3 % 10.8 1.4 % 13.7 2.4 % Operating loss (445.3) (55.2) % (311.8) (41.1) % (203.1) (35.5) % Non-operating expense (income), net 127.2 15.8 % (52.0) (6.9) % 38.8 6.8 % Loss before income taxes (572.5) (70.9) % (259.8) (34.3) % (241.9) (42.3) % Income tax expense 1.1 0.1 % 0.7 0.1 % 8.2 1.4 % Net loss from continuing operations (573.6) (71.1) % (260.5) (34.3) % (250.1) (43.7) % Net (loss) income from discontinued operations (290.6) (36.0) % (69.4) (9.1) % 49.2 8.6 % Net loss ($864.2) (107.1) % ($329.9) (43.5) % ($200.9) (35.1) % Basic and diluted loss per share Continuing operations ($4.56) ($2.09) ($2.08) Net loss ($6.88) ($2.65) ($1.67) 32 Table of Contents Revenue Revenue was comprised of the following: Fiscal Years Ended Year-Over-Year Change (in millions of U.S.
Dollars, except share data) Amount % of Revenue Amount % of Revenue Amount % of Revenue Revenue, net $757.6 100.0 % $807.2 100.0 % $758.5 100.0 % Cost of revenue, net 879.2 116.1 % 729.8 90.4 % 515.6 68.0 % Gross (loss) profit (121.6) (16.1) % 77.4 9.6 % 242.9 32.0 % Research and development 175.1 23.1 % 201.9 25.0 % 165.7 21.8 % Sales, general and administrative 190.5 25.1 % 246.4 30.5 % 214.3 28.3 % Factory start-up costs 85.2 11.2 % 53.8 6.7 % 160.2 21.1 % Gain on disposal of property and equipment (20.0) -2.6 % — — % — — % Goodwill impairment 359.2 47.4 % — — % — — % Restructuring and other expenses 417.6 55.1 % 20.6 2.6 % 14.5 1.9 % Operating loss (1,329.2) (175.4) % (445.3) (55.2) % (311.8) (41.1) % Interest expense, net of capitalized interest 315.2 41.6 % 246.3 30.5 % 42.6 5.6 % Non-operating income, net (25.5) (3.4) % (119.1) (14.8) % (94.6) (12.5) % Loss before income taxes (1,618.9) (213.7) % (572.5) (70.9) % (259.8) (34.3) % Income tax (benefit) expense (9.7) (1.3) % 1.1 0.1 % 0.7 0.1 % Net loss from continuing operations (1,609.2) (212.4) % (573.6) (71.1) % (260.5) (34.3) % Net loss from discontinued operations — — % (290.6) (36.0) % (69.4) (9.1) % Net loss ($1,609.2) (212.4) % ($864.2) (107.1) % ($329.9) (43.5) % Basic and diluted loss per share Continuing operations ($11.39) ($4.56) ($2.09) Net loss ($11.39) ($6.88) ($2.65) 47 Table of Contents Revenue Revenue was comprised of the following: Fiscal Years Ended Year-Over-Year Change (in millions of U.S.
An unfavorable tax settlement might require use of our cash, existing deferred tax assets, and/or result in an increase in our effective tax rate in the year of resolution, whereas, a favorable tax settlement would be recognized as a reduction in our effective tax rate in the year of resolution.
An unfavorable tax settlement might require use of our cash, existing deferred tax assets, and/or result in an increase in our effective tax rate in the year of resolution, whereas a favorable tax settlement would be recognized as a reduction in our effective tax rate in the year of resolution. 58 Table of Contents Stock-Based Compensation We account for awards of stock-based compensation under our employee stock-based compensation plans using the fair value method.
Stock-Based Compensation We account for awards of stock-based compensation under our employee stock-based compensation plans using the fair value method. Accordingly, we estimate the grant date fair value of our stock-based awards and amortize this fair value to compensation expense over the requisite service period or vesting term.
Accordingly, we estimate the grant date fair value of our stock-based awards and amortize this fair value to compensation expense over the requisite service period or vesting term. We currently use the Black-Scholes option-pricing model to estimate the fair value of our Employee Stock Purchase Plan ("ESPP") awards.
Gross Profit and Gross Margin Gross profit and gross margin were as follows: Fiscal Years Ended Year-Over-Year Change (in millions of U.S.
Gain on Disposal of Property and Equipment Disposal gains on property and equipment were as follows: Fiscal Years Ended Year-Over-Year Change (in millions of U.S.
Gross profit decreased to $77.4 million in fiscal 2024 from $242.9 million in fiscal 2023. Gross margin and gross profit for fiscal 2024 include the impacts of $124.4 million of underutilization costs primarily in connection with the start of production at the Mohawk Valley Fab, which began revenue production in late fiscal 2023.
Gross margin and gross profit for fiscal 2025 and 2024 include the impacts of $105.2 million and $124.4 million, respectively, of underutilization costs in connection with the start of production at the Mohawk Valley Fab, which began revenue production in late fiscal 2023. • Operating loss from continuing operations was $1,329.2 million in fiscal 2025 as compared to $445.3 million in fiscal 2024.
When a new facility begins revenue generating production, the operating costs of that facility previously expensed as start-up costs will instead be primarily expensed as part of the cost of the production within the cost of revenue, net line item in our statement of operations.
When a new facility begins revenue generating production, the operating costs of that facility previously expensed as start-up costs will instead be primarily expensed as part of the cost of the production within the cost of revenue, net line item in our statement of operations. 49 Factory startup costs in fiscal 2025 increased as compared to fiscal 2024 due to increased costs incurred in connection with the construction of our materials manufacturing facility in Siler City, North Carolina.
This was partially offset by an increase in net loss during the period. Cash Flows from Investing Activities Our investing activities primarily relate to short-term investment transactions, purchases of property and equipment, and property and equipment related reimbursements.
Cash Flows from Investing Activities Our investing activities primarily relate to short-term investment transactions, purchases of property and equipment, and property and equipment related reimbursements.
This arrangement is often referred to as a “sell-in” or “point-of-purchase” model as opposed to a “sell-through” or “point-of-sale” model, where revenue is deferred and not recognized until the distributor sells the product through to their customer. 41 Table of Contents Our distributors may be provided limited rights that allow them to return or scrap a portion of inventory (product exchange rights or stock rotation rights) and receive credits for changes in selling prices (price protection rights) or customer pricing arrangements under our “ship and debit” program or other targeted sales incentives.
Our distributors may be provided limited rights that allow them to return or scrap a portion of inventory (product exchange rights or stock rotation rights) and receive credits for changes in selling prices (price protection rights) or customer pricing arrangements under our “ship and debit” program or other targeted sales incentives.
We currently use the Black-Scholes option-pricing model to estimate the fair value of our Employee Stock Purchase Plan (ESPP) awards. The grant date fair value of performance stock units that vest upon meeting certain market conditions is estimated using the Monte Carlo valuation model.
The grant date fair value of performance stock units that vest upon meeting certain market conditions is estimated using the Monte Carlo valuation model.
The assessment of an estimated forfeiture rate will not alter the total compensation expense to be recognized, only the timing of this recognition as compensation expense is adjusted to reflect instruments that vest. 43 Table of Contents Long-Lived Assets We evaluate long-lived assets such as property, equipment and finite-lived intangible assets, such as patents, for impairment whenever events or circumstances indicate that the carrying value of the assets recognized in our financial statements may not be recoverable.
Long-Lived Assets We evaluate long-lived assets such as property, equipment and finite-lived intangible assets, such as patents, for impairment whenever events or circumstances indicate that the carrying value of the assets recognized in our financial statements may not be recoverable.
We believe the increased demand for our power products reflects the value that the industry places on a transition to silicon carbide materials and devices while also evidencing the growing global focus on adopting higher efficiency energy solutions, including electric vehicle and related technologies.
We believe that this reflects the value that the industry places on a transition to silicon carbide materials and devices while also evidencing a global focus on adopting higher efficiency energy solutions, including electric vehicle and related technologies. We believe these trends could have a significant positive impact on revenues in future periods. • Intense and Constantly Evolving Competitive Environment.
The costs incurred to operate the facility in excess of the costs absorbed into inventory are referred to as underutilization costs and are expensed as incurred to cost of revenue, net.
The costs incurred to operate the new facilities in excess of the costs absorbed into inventory are referred to as underutilization costs and are expensed as incurred to cost of revenue, net. 48 Research and Development Research and development expenses include costs associated with the development of new products, enhancements of existing products and general technology research.
Other Operating Expense Other operating expense was comprised of the following: Fiscal Years Ended Year-Over-Year Change (in millions of U.S.
Goodwill Impairment Fiscal Years Ended Year-Over-Year Change (in millions of U.S.
Once an impairment loss is recognized, the adjusted carrying value of the goodwill becomes the new accounting basis of the goodwill for the reporting unit.
Once an impairment loss is recognized, the adjusted carrying value of the goodwill becomes the new accounting basis of the goodwill for the reporting unit. Historically, we derived a reporting unit’s fair value through a combination of the market approach and the income approach (a discounted cash flow analysis).
For a description of contractual obligations, including lease and debt obligations, see Note 5, "Leases," Note 10, "Long-term Debt," and Note 15, "Commitments and Contingencies," in our consolidated financial statements included in Item 8 of this Annual Report. Cash Flows In summary, our cash flows were as follows (in millions of U.S.
In addition to ordinary operating expenses, our estimated future obligations consist of leases, debt, and interest on long-term debt. For a description of contractual obligations, including lease and debt obligations, see Note 5, "Leases," Note 9, "Debt," and Note 14, "Commitments and Contingencies," in our consolidated financial statements included in Part II, Item 8 of this Annual Report.
Dollars) June 30, 2024 June 25, 2023 June 26, 2022 2023 to 2024 2022 to 2023 Interest income ($135.0) ($58.2) ($11.3) ($76.8) (132) % ($46.9) (415) % Interest expense, net of capitalized interest 246.3 42.6 25.1 203.7 478 % 17.5 70 % Loss (gain) on legal proceedings 7.7 (50.3) — 58.0 115 % (50.3) (100) % Loss on debt extinguishment — — 24.8 — — % (24.8) (100) % Gain on equity investment (18.5) — — (18.5) (100) % — — % Loss on Wafer Supply Agreement 25.3 13.6 0.8 11.7 86 % 12.8 1,600 % Other expense, net 1.4 0.3 (0.6) 1.1 367 % 0.9 150 % Non-operating expense (income), net $127.2 ($52.0) $38.8 $179.2 345 % ($90.8) (234) % Interest income.
Dollars) June 29, 2025 June 30, 2024 June 25, 2023 2024 to 2025 2023 to 2024 Interest income ($67.6) ($135.0) ($58.2) $67.4 50 % ($76.8) (132) % Gain on legal proceedings — — (50.3) — — % 50.3 100 % Loss on customs matter — 7.7 — (7.7) (100) % 7.7 100 % Unrealized gain on equity investment (22.6) (18.5) — (4.1) (22) % (18.5) (100) % Loss on Wafer Supply Agreement 9.2 25.3 13.6 (16.1) (64) % 11.7 86 % Write-off of deferred financing costs 54.7 — — 54.7 100 % — — % Other expense, net 0.8 1.4 0.3 (0.6) (43) % 1.1 367 % Non-operating income, net ($25.5) ($119.1) ($94.6) $93.6 79 % ($24.5) (26) % Interest income.
Dollars) June 30, 2024 June 25, 2023 June 26, 2022 2023 to 2024 2022 to 2023 Gross profit $77.4 $242.9 $208.1 ($165.5) (68) % $34.8 17 % Gross margin 10 % 32 % 36 % As explained further below in Factory Start-up Costs, the operating costs of each of our new facilities will largely be reflected in cost of revenue, net once such facility reaches revenue generating production.
As explained further below in Factory Start-up Costs, the operating costs of each of our new facilities will largely be reflected in cost of revenue, net once such facility reaches revenue generating production.
For fiscal 2025, we target approximately $1.2 billion to $1.4 billion of net capital investment. 31 Table of Contents Results of Operations Selected consolidated statement of operations data for the years ended June 30, 2024, June 25, 2023 and June 26, 2022 is as follows: Fiscal Years Ended June 30, 2024 June 25, 2023 June 26, 2022 (in millions of U.S.
We also expect to receive an additional $0.7 billion of incentives primarily related to the AMIC refundable tax credits during fiscal 2026. 46 Table of Contents Results of Operations Selected consolidated statement of operations data for the years ended June 29, 2025, June 30, 2024 and June 25, 2023 is as follows: Fiscal Years Ended June 29, 2025 June 30, 2024 June 25, 2023 (in millions of U.S.
Cash Flows from Financing Activities Net cash provided by financing activities in fiscal 2024 primarily consisted of $2.0 billion in net proceeds from the receipt of deposits under the CRD Agreement.
Cash Flows from Financing Activities Net cash provided by financing activities in fiscal 2025 primarily consisted of $0.2 billion in net proceeds from the issuance of additional long term debt borrowings and $0.2 billion proceeds from our ATM Program.
If interest rates were to hypothetically increase by 100 basis points, the fair value of our short-term investments would decrease by $12.3 million at June 30, 2024 and $14.6 million at June 25, 2023. 40 Table of Contents Equity Prices In connection with the RF Business Divestiture, we received the MACOM Shares which had a market value of approximately $79.3 million as of June 30, 2024, based on the closing price of MACOM common stock on June 28, 2024, the last trading day of our fourth fiscal quarter.
Equity Prices In connection with the RF Business Divestiture, we received the MACOM Shares which had a market value of approximately $102.0 million as of June 29, 2025, based on the closing price of MACOM common stock on June 27, 2025, the last trading day of our fourth fiscal quarter.
General economic conditions, market specific changes or other factors outside of our control may affect the pricing of these commodities. We do not use financial instruments to hedge commodity prices. Off-Balance Sheet Arrangements We do not use off-balance sheet arrangements with unconsolidated entities or related parties, nor do we use any other forms of off-balance sheet arrangements.
We do not use financial instruments to hedge commodity prices. 56 Table of Contents Off-Balance Sheet Arrangements We do not use off-balance sheet arrangements with unconsolidated entities or related parties, nor do we use any other forms of off-balance sheet arrangements. Accordingly, our liquidity and capital resources are not subject to off-balance sheet risks from unconsolidated entities.
Dollars) June 30, 2024 June 25, 2023 June 26, 2022 2023 to 2024 2022 to 2023 Power Products $415.6 $409.2 $276.6 $6.4 2 % $132.6 48 % Materials Products $391.6 $349.3 $295.5 $42.3 12 % $53.8 18 % Revenue $807.2 $758.5 $572.1 $48.7 6 % $186.4 33 % The increase in revenue for fiscal 2024 as compared to fiscal 2023 was primarily due to increased demand and production capacity in our materials product line.
Dollars) June 29, 2025 June 30, 2024 June 25, 2023 2024 to 2025 2023 to 2024 Power Products $414.0 $415.6 $409.2 ($1.6) — % $6.4 2 % Materials Products $343.6 $391.6 $349.3 ($48.0) (12) % $42.3 12 % Revenue $757.6 $807.2 $758.5 ($49.6) (6) % $48.7 6 % Net sales for fiscal 2025 as compared to fiscal 2024 were down 6% primarily driven by the following: • Net sales of our Power Product offerings were primarily impacted by ongoing weakness in the industrial and energy end markets.
As such, our ability to modulate capital investment up or down in response to expected production capacity requirements will continue to increase.
We also believe our ability to modulate capital investment up or down in response to expected production capacity demand requirements will continue to increase. 55 Table of Contents Cash Flows Refer to the "Overview" section for a summary of our cash flows for the periods presented.
As of June 30, 2024 and June 25, 2023, our cash equivalents and short-term investments had a fair value of $1,226.0 million and $1,456.0 million, respectively.
As of June 29, 2025 and June 30, 2024, our cash equivalents and short-term investments had a fair value of $595.7 million and $1,226.0 million, respectively. If interest rates were to hypothetically increase by 100 basis points, the fair value of our short-term investments would decrease by $6.0 million at June 29, 2025 and $12.3 million at June 30, 2024.
We may also access capital markets through the issuance of debt or equity, which we may use in connection with the acquisition of complementary businesses or other significant assets or for other strategic opportunities or general corporate purposes. 38 Table of Contents Expected Uses of Liquidity We opened the Mohawk Valley Fab in the fourth quarter of fiscal 2022 to expand capacity for production of our silicon carbide devices and started revenue generating production at the facility in the fourth quarter of fiscal 2023.
We may also access capital markets through the issuance of debt or equity, which we may use in connection with the acquisition of complementary businesses or other significant assets or for other strategic opportunities or general corporate purposes. 54 Table of Contents We also expect to receive an additional $0.7 billion of incentives primarily related to the AMIC refundable tax credits during fiscal 2026.
Dollars) June 30, 2024 June 25, 2023 June 26, 2022 2023 to 2024 2022 to 2023 Income tax expense $1.1 $0.7 $8.2 0.4 57 % (7.5) (91) % Effective tax rate — % — % (3) % The change in the effective tax rate from (3)% in fiscal 2022 to 0% in fiscal 2023 and fiscal 2024 was primarily due to $7.3 million of income tax expense recognized in the second quarter of fiscal 2022 related to the restructuring of our Luxembourg holding company.
Dollars) June 29, 2025 June 30, 2024 June 25, 2023 2024 to 2025 2023 to 2024 Income tax expense ($9.7) $1.1 $0.7 (10.8) (982) % 0.4 57 % Effective tax rate 1 % — % — % The change in the effective tax rate for fiscal 2025 compared to fiscal 2024 was primarily driven by the reversal of the deferred tax liability associated with our goodwill upon the impairment recognized during fiscal 2025.
The factory optimization restructuring plan concluded in fiscal 2022. 35 Non-Operating Expense (Income), net Non-operating expense (income), net was comprised of the following: Fiscal Years Ended Year-Over-Year Change (in millions of U.S.
As we near substantial completion of the initial phase of these initiatives, we expect the amount of interest expense eligible for capitalization to decrease in future periods. Non-Operating Income, net Non-operating income, net was comprised of the following: Fiscal Years Ended Year-Over-Year Change (in millions of U.S.
In the second quarter of fiscal 2022, all of our then-outstanding 2023 Notes were converted into shares of our common stock, which resulted in a loss on extinguishment of $24.8 million. Gain on equity investment . The gain on equity investment for fiscal 2024 relates to changes in fair value of the MACOM Shares. Loss on Wafer Supply Agreement .
Unrealized gain on equity investment . The loss (gain) on equity investment for fiscal 2025 and 2024, respectively, relates to changes in fair value of the shares of MACOM's common stock received as partial consideration for the sale of the RF Business (the "MACOM Shares"). Loss on Wafer Supply Agreement .
We are primarily focused on investing in our business to expand the scale of production, further develop the technologies, and accelerate the growth opportunities of silicon carbide materials, silicon carbide power devices and modules. We are prioritizing the identification of opportunities to reduce operating costs and to optimize our capital structure in support of these investments in our business.
We believe these efforts will support our goals of delivering long-term growth and profitability, while enabling us to continue to invest in our business to further develop the technologies and accelerate the growth opportunities of silicon carbide materials and silicon carbide power devices and modules.
To enforce or protect intellectual property rights, litigation or threatened litigation is common. 30 Fiscal 2024 Overview The following is a summary of our financial results for the year ended June 30, 2024: • Our year-over-year revenue increased by $48.7 million to $807.2 million. • Gross margin decreased to 9.6% in fiscal 2024 from 32.0% in fiscal 2023.
Fiscal 2025 Overview The following is a summary of our financial results for the year ended June 29, 2025: • Our year-over-year revenue decreased by $49.6 million to $757.6 million primarily driven by weaker demand for applications serving the industrial and energy end markets, partially offset by continued growth from our automotive products. • Gross margin decreased to (16.1)% in fiscal 2025 from 9.6% in fiscal 2024.
We believe these efforts will support our goals of delivering higher revenue and shareholder returns over time. In addition, we are focused on improving the number of usable items in a production cycle (yield) as our manufacturing technologies become more complex.
Refer to Note 16, "Restructuring," to our consolidated financial statements in Part II, Item 8 of this Annual Report for additional discussion of the financial impact of these activities. In addition, we are focused on continuous improvement in the number of usable items in a production cycle (yield) as our manufacturing technologies become more complex.
Dollars): Fiscal Years Ended Year-Over-Year Change June 30, 2024 June 25, 2023 June 26, 2022 2023 to 2024 2022 to 2023 Cash used in operating activities of continuing operations ($671.3) ($102.2) ($124.8) ($569.1) $22.6 Cash used in investing activities of continuing operations (1,940.2) (1,139.2) (382.0) (801.0) (757.2) Cash provided by financing activities of continuing operations 1,958.0 2,597.1 615.9 (639.1) 1,981.2 Effect of foreign exchange changes (0.2) — (0.2) (0.2) 0.2 Cash used in discontinued operations (57.4) (48.2) (38.4) (9.2) (9.8) Net increase (decrease) in cash and cash equivalents ($711.1) $1,307.5 $70.5 ($2,018.6) $1,237.0 39 Table of Contents Cash Flows from Operating Activities Net cash used in operating activities increased in fiscal 2024 as compared to fiscal 2023 primarily due to an increased net loss and decreased working capital as a result of inventory growth, interest payments on long-term debt and increased payments for supplier deposits.
Dollars) June 29, 2025 June 30, 2024 June 25, 2023 2024 to 2025 2023 to 2024 Cash used in operating activities of continuing operations ($711.7) ($671.3) ($102.2) ($40.4) ($569.1) Cash used in investing activities of continuing operations (268.1) (1,940.2) (1,139.2) 1,672.1 (801.0) Cash provided by financing activities of continuing operations 400.1 1,958.0 2,597.1 (1,557.9) (639.1) Effect of foreign exchange changes 1.0 (0.2) — 1.2 (0.2) Cash used in discontinued operations — (57.4) (48.2) 57.4 (9.2) Net increase (decrease) in cash and cash equivalents ($578.7) ($711.1) $1,307.5 $132.4 ($2,018.6) Our principal sources of liquidity in fiscal 2025 included: • cash on hand from prior period debt financing, including the CRD Agreement; • receipts from customers and other operating activities; • proceeds from the sale of our Farmer's Branch and RTP facilities; • reimbursements received under the AMIC refundable tax credit and other government incentives; • proceeds from debt issuances under our Senior Secured Notes and cash interest savings from paid-in-kind interest under our Senior Secured Notes and the CRD Agreement; and • proceeds from our at-the-market offering program.
The decrease in gross profit and gross margin in fiscal 2024 as compared to the prior years was primarily due to underutilization costs incurred within cost of revenue in connection with the start of production at our Mohawk Valley Fab, which began revenue production in late fiscal 2023. Underutilization costs were $124.4 million for fiscal 2024.
The gross margin impact of the above items was partially offset by lower underutilization costs due to the timing of the Mohawk Valley Fab ramp. We incurred $105.2 million of underutilization costs at our Mohawk Valley Fab during fiscal 2025, compared to $124.4 million of underutilization costs during fiscal 2024.
The increase in interest income in fiscal 2024 and fiscal 2023 was primarily driven by increased average short-term investment balances throughout fiscal 2024.
The decrease in interest income in fiscal 2025 compared to fiscal 2024 was primarily due to the lower short-term investment balances and a lower interest rate environment. Write-off of Deferred Financing Costs.
Dollars) June 30, 2024 June 25, 2023 June 26, 2022 2023 to 2024 2022 to 2023 Research and development $201.9 $165.7 $142.6 $36.2 22 % $23.1 16 % Percent of revenue 25 % 22 % 25 % The increases in research and development expenses were primarily due to our continued investment in our silicon carbide technologies, including the development of existing silicon carbide materials and fabrication technology for next generation platforms and expansion of our power product portfolio.
Dollars) June 29, 2025 June 30, 2024 June 25, 2023 2024 to 2025 2023 to 2024 Research and development $175.1 $201.9 $165.7 ($26.8) (13) % $36.2 22 % Percent of revenue 23 % 25 % 22 % The decreases in research and development expenses in fiscal 2025 compared to fiscal 2024 were primarily due to (i) lower people costs due to a planned decrease in salary and benefits costs related to lower headcount and (ii) lower material costs from a planned decrease in research and development wafer starts associated with product transfers and technology qualifications related to the Mohawk Valley Fab ramp.
Dollars) June 30, 2024 June 25, 2023 June 26, 2022 2023 to 2024 2022 to 2023 Sales, general and administrative $246.4 $214.3 $183.0 $32.1 15 % $31.3 17 % Percent of revenue 31 % 28 % 32 % The increase in SG&A expenses in all periods was primarily due to increased salaries and benefits from increased headcount, including incentive based stock-based compensation, as well as increases in professional services and sponsorship costs.
Dollars) June 29, 2025 June 30, 2024 June 25, 2023 2024 to 2025 2023 to 2024 Sales, general & administrative $190.5 $246.4 $214.3 ($55.9) (23) % $32.1 15 % Percent of revenue 25 % 31 % 28 % The decrease in SG&A expenses during fiscal 2025 compared to the prior fiscal year was primarily driven by: • $19.7 million reduction in salaries and other people costs related to planned reductions in headcount associated with our 2025 Restructuring Plan; • $20.2 million reduction in stock-based compensation expense due to forfeitures and a decrease in fair value per share for new grants; and • $8.9 million reduction related to travel and outside services expenditures (excluding pre-petition charges presented separately).
Removed
Recently, we and other semiconductor companies have been experiencing softening demand for power products in industrial and energy applications. We continue to experience increased demand for our power products designed for electrical vehicle applications, and we are working closely with our customer base to best match our supply to their demand.
Added
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Management’s discussion and analysis of financial condition and results of operations ("MD&A") should be read in conjunction with the financial statements and the related notes that appear elsewhere in this document.
Removed
We believe these trends could have a significant positive impact on revenues in future periods as we increase capacity to meet this increased demand. • Supply Constraints. The semiconductor industry has experienced supply constraints for certain items.
Added
This section of this Form 10-K generally discusses fiscal 2025 and 2024 items and year-to-year comparisons between fiscal 2025 and 2024.
Removed
We have successfully managed through challenges relating to obtaining certain necessary production and processing equipment thus far, and we have continued to see supply availabilities and lead times stabilize across many direct materials.
Added
Discussions of 2023 items and year-to-year comparisons between fiscal 2024 and 2023 that are not included in this Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended June 30, 2024 as filed with the SEC on August 22, 2024.
Removed
In addition, although we have not experienced significant impacts to date, the ongoing military conflict between Russia and Ukraine and the ongoing conflicts in the Middle East may further exacerbate global supply constraints.
Added
Unless otherwise noted, the following information and discussion relates to our continuing operations. Recent Events Restructuring Support Agreement On June 22, 2025, the Debtors entered into the Restructuring Support Agreement with (i) the Consenting Senior Secured Noteholders; (ii) the Consenting Convertible Noteholders; and (iii) Renesas.
Removed
We have taken steps to provide continuity in supply to our customers to the extent possible, including entering into purchase agreements and providing capacity reserve deposits with our suppliers to secure future supply to us. • Intense and Constantly Evolving Competitive Environment. Competition in the industries we serve is intense.
Added
We intend to substantially de-lever our capital structure on the terms set forth in the Restructuring Support Agreement through the Plan filed by the Debtors in the Chapter 11 Cases. The specific terms underlying the Restructuring Support Agreement are further detailed in the Plan.
Removed
Business Outlook We believe we are uniquely positioned as an innovator in the global semiconductor industry. The strength of our balance sheet provides us the ability to invest in our business and increase production capacity, as indicated by the Mohawk Valley Fab, where we started revenue production in late fiscal 2023.
Added
The following is a summary of the material terms of the transactions contemplated by the Restructuring Support Agreement and the Plan: • Senior Secured Notes.
Removed
In addition, an expansion of our materials factory in Durham, North Carolina, the construction of a new materials manufacturing facility in Siler City, North Carolina, the renovation of an epitaxy facility in Farmers Branch, Texas, and our plan to construct a new silicon carbide device fabrication facility in Saarland, Germany are all expected to increase our production capacity.
Added
Holders of Senior Secured Notes are expected to receive their pro rata share of (i) New Senior Secured Notes, which will have substantially similar terms to the existing Senior Secured Notes with certain modifications to reduce go-forward cash interest and minimum liquidity requirements, (ii) a payment from the redemption of $250 million in principal amount of existing Senior Secured Notes at a redemption price of 109.875% of the principal amount being redeemed (to be paid with the proceeds of the Rights Offering described below), and (iii) certain commitment fees, subject to certain conditions. • Convertible Notes.
Removed
Despite increased complexities in our manufacturing processes, we have improved yields significantly and expect that we will continue to improve yield levels to support our future growth, particularly as we transition more production to the Mohawk Valley Fab. We are also assessing the closure timeline of our existing device fabrication operations in Durham, North Carolina as part of this transition.
Added
Holders of Convertible Notes are expected to receive their pro rata share of (i) rights to participate in the rights offering of New 2L Convertible Notes in the principal amount of $301.13 million, to be fully backstopped by certain holders of Wolfspeed’s existing Convertible Notes, and the issuance of additional New 2L Convertible Notes in the principal amount of $30.25 million pursuant to a premium, as discussed in more detail below under the section titled “Backstop Commitment Agreement,” (ii) the New 2L Takeback Notes in the principal amount of $296 million and (iii) 56.3% of the New Common Stock to be issued on the Plan Effective Date, subject to dilution from other equity issuances, including the conversion of the New 2L Convertible Notes, and the convertible notes and warrants provided to Renesas.
Removed
We believe we have the ability to navigate the current environment while maintaining our capital expenditure plans to support future growth to meet long-term demand, although demand in the mid-term appears to be ahead of the industry's supply capabilities.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk See the section entitled “Financial and Market Risks” included in Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" of this Annual Report. 44 Table of Contents
Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk See the section entitled “Financial and Market Risks” included in Part II, Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" of this Annual Report. 60 Table of Contents

Other WOLF 10-K year-over-year comparisons