Wolfspeed Secures Strategic Win with Toyota Partnership and Major Tax Credit

Early December 2025 has proven to be a pivotal period for semiconductor manufacturer Wolfspeed, marked by two significant developments. The company announced a major supply agreement with automotive giant Toyota and received a substantial tax refund, signaling operational progress following its successful financial restructuring completed in September.

On December 1, Wolfspeed disclosed the receipt of a $698.6 million tax refund from the U.S. Internal Revenue Service. This capital infusion originates from the Advanced Manufacturing Investment Credit (AMIC), a provision within the CHIPS and Science Act. The payment elevates the company's cash position to approximately $1.5 billion.

"This substantial cash infusion further strengthens our liquidity position at a critical phase in Wolfspeed's strategic evolution," stated CFO Gregor Van Issum.

Pursuant to a prior restructuring agreement, $192.2 million of this refund will be allocated to repaying roughly $175 million in secured debt. This move follows the company's September 2025 debt reduction, which had already lowered total indebtedness by about 70%.

Toyota Validation as a Key EV Supplier

A week later, on December 9, Wolfspeed revealed a new partnership with Toyota Motor Corporation. The Japanese automaker, renowned for its quality standards, will integrate Wolfspeed's silicon carbide MOSFETs into the onboard charging systems for its future battery-electric vehicles.

CEO Robert Feurle highlighted the strategic importance of a domestic supply chain, noting, "Wolfspeed's U.S.-based supply chain and domestic silicon carbide manufacturing footprint ensure the stability and continuity they need to achieve their electrification goals."

This partnership serves as a strong endorsement of Wolfspeed's technology in the competitive electric vehicle component market. Silicon carbide chips offer distinct advantages over traditional silicon, including faster charging times due to more efficient power conversion, extended vehicle range from reduced energy loss, and more compact system designs enabled by higher power density.

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

Operational Transition and Market Diversification

The company is currently finalizing its transition from 150mm wafer production in Durham, North Carolina, to advanced 200mm manufacturing at its Mohawk Valley facility. The larger wafers provide a 1.7x increase in surface area per disc, driving down per-chip costs through greater manufacturing efficiency.

Beyond the automotive sector, Wolfspeed is targeting other high-growth markets. These include artificial intelligence data centers, which require efficient power supplies for energy-intensive infrastructure, as well as the aerospace and defense industries, which demand highly reliable power electronics.

Analyst Sentiment and Forward Outlook

Market experts remain divided on the stock. Current analyst ratings show three recommending a buy, one maintaining a neutral stance, and four advising a sell.

For the first quarter of fiscal year 2026, reported on October 29, 2025, Wolfspeed posted revenue of $197 million. The company reported an adjusted loss per share of $0.55, which was better than the anticipated loss of $0.75. However, guidance for the second quarter projects revenue in a range of $150 to $190 million, falling below the consensus estimate of $232 million.

Investors are closely monitoring several near-term milestones: the production ramp-up at Mohawk Valley, the planned completion of the Durham facility closure in December 2025, and the potential for additional tax credits amounting to approximately $300 million.

With a fortified balance sheet holding $1.5 billion in cash and the strategic validation from Toyota, Wolfspeed has gained crucial financial and operational breathing room. Nevertheless, challenges related to the manufacturing transition and softer near-term market demand continue to present headwinds.