US chipmaker Wolfspeed is preparing to file for bankruptcy in the coming weeks.

According to a report from the Wall Street Journal, with the support of its creditors, the company is looking to file for Chapter 11 bankruptcy, having previously rejected several out-of-court debt restructuring proposals.

The company currently has debts of $6.5 billion, including a $575 million balloon payment due to convertible noteholders in May 2026, the WSJ reported. As of March 31, Wolfspeed had $1.3bn in cash on hand.

Founded in North Carolina in 1987, Wolfspeed is the world’s leading manufacturer of wafers and devices made from silicon carbide, a material that provides several advantages over conventional silicon for power applications, including better thermal conductivity, higher switching speeds, and lower dissipation.

The company is currently grappling with reduced demand for its 150mm wafers and in January 2025, put its site near Dallas, Texas, up for sale for an undisclosed price. The facility in Farmers Branch, which comprises four buildings, including one 14MW data center and a semiconductor fab, is still on the market. None of the four buildings are available for sale individually.

Wolfspeed has also indefinitely suspended construction plans for a device fab in Saarland, Germany.

In October 2024, Wolfspeed signed a provisional agreement with the Department of Commerce to receive up to $750 million in direct CHIPS Act funding to support the construction of two new facilities in North Carolina and New York.

According to the WSJ, in order to receive the funding, Wolfspeed would need to successfully refinance the 2026 convertible notes, in addition to other convertible notes that are set to mature in 2028 and 2029.