Wolfspeed Secures Major Financial Boost with $698.6 Million Tax Credit

Semiconductor manufacturer Wolfspeed has significantly bolstered its balance sheet, receiving a substantial cash infusion of $698.6 million from the U.S. Internal Revenue Service. The payment, recorded on December 1, 2025, constitutes a tax refund under Section 48D of the Internal Revenue Code.

Management has outlined clear plans for the newly acquired capital. In accordance with agreements with its senior lenders, the company will allocate $192.2 million from the refund to retire approximately $175 million in outstanding debt. The remaining funds are designated for general corporate purposes.

This strategic move follows the company's recent emergence from Chapter 11 bankruptcy protection at the end of September 2025. That restructuring process successfully reduced Wolfspeed's total debt burden by roughly 70 percent. Existing shares were canceled, transferring majority ownership to a consortium of creditors, including Apollo Global Management and Renesas Electronics.

Liquidity Position Strengthened to $1.5 Billion

This latest refund originates from the Advanced Manufacturing Investment Credit (AMIC). It represents a major step in monetizing an accumulated pool of roughly one billion dollars in Section 48D credits. During its 2025 fiscal year, the firm had already received $186.5 million from prior tax filings.

The injection catapults Wolfspeed's total cash and equivalents to an estimated $1.5 billion. Chief Financial Officer Gregor Van Issum characterized the refund as enhancing the company's liquidity "during a critical phase of Wolfspeed’s strategic development," providing "financial agility to support long-term growth."

Should investors sell immediately? Or is it worth buying Wolfspeed?

Key Financial Figures:
* Section 48D Tax Refund: $698.6 million
* Projected Total Cash Balance: ~$1.5 billion
* Planned Debt Reduction: ~$175 million
* Funds Allocated for Debt Paydown: $192.2 million

Path to Profitability Remains a Focus

Despite the improved liquidity, fundamental challenges persist. The company continues to report significant losses. Over the trailing twelve-month period, Wolfspeed posted a loss per share of $13.28, with a negative gross margin of -6.9%. Revenue for the period stood at $759.7 million.

A key part of the growth strategy involves diversifying beyond the electric vehicle market. The company is now targeting expansion into several adjacent sectors, including artificial intelligence data centers, aerospace and defense, and industrial applications such as wind and solar energy.

The upcoming quarterly report, scheduled for January 28, 2026, will offer investors a clearer view on whether the post-bankruptcy restructuring and strategic pivot are beginning to yield tangible results.