Wolfspeed, the North Carolina-based silicon carbide manufacturer, announced it will reduce its global workforce by 20% and close its 150mm chip factory in Durham as part of a $450 million restructuring plan. This move aims to streamline operations and advance Wolfspeed's transition to a 200mm wafer production platform, a shift expected to significantly improve efficiency and cost-effectiveness.

In an earnings report released November 6, Wolfspeed detailed the planned layoffs, which will affect around 1,000 employees, including hundreds based near Research Triangle Park. The company had already reduced its workforce by 10% earlier this year through voluntary exits and attrition. This further reduction will take place over the next six to 12 months, and affected employees are set to receive a combined $60 million in severance as part of the restructuring budget, which also includes facility closure costs and asset-related expenses.

Wolfspeed CEO Gregg Lowe stated that the company's shift to exclusively producing 200mm wafers—the industry's largest silicon carbide substrates—positions Wolfspeed as a leader in this space. “We are becoming the first company to transition fully to 200mm, which allows us to simplify costs further, including closing our manual 150mm plant in Durham,” Lowe said. The transition to 200mm wafers, he noted, will support ongoing efforts to realign Wolfspeed's cost structure and optimize capital spending in response to a slowdown in the electric vehicle (EV) market, which has impacted demand for semiconductor materials.

Despite recent challenges, Wolfspeed remains optimistic about growth in its automotive segment, with a 2.5-fold year-over-year increase in EV business in Q1 of fiscal 2025. The company expects EV-related revenues to continue growing through 2025 as more models adopt Wolfspeed's silicon carbide solutions.

In October, Wolfspeed secured a $750 million federal grant and $750 million in loans under the CHIPS and Science Act to support the expansion of its upcoming 200mm wafer facility in Chatham County, expected to begin production next summer.

Looking ahead to the second quarter of fiscal 2025, Wolfspeed forecasts revenue between $160 million and $200 million, with GAAP net losses ranging from $362 million to $401 million. Lowe emphasized that the restructuring and cost-saving measures will position Wolfspeed for long-term growth as it continues to expand its industrial and energy sector footprint.