Which cliché rings more true: running a successful business has never been easy, or having a good business has never been harder? Either way, the message is clear — today’s companies face relentless challenges.
Different times bear different obstacles. There is not one key to success, and there’s no guarantee how long the good thing will last. As the world develops, people change. Our culture, habits, and monetary abilities dictate the trends.
That’s why timing is everything.
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Trends can shift; however, one industry that seems relatively immune to economic turbulence and uncertainties is technology.
Technology is deeply connected to nearly everything we do and need. It powers everything from agricultural machines that bring food to our tables, to medical devices that make various diagnoses or surgeries possible, to cool gadgets we don’t actually need, but love.
One of the fastest-growing technology sub-industries is semiconductors.
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Semiconductors as a super industry
Within the tech sector, one of the fastest-growing sub-industries is semiconductors. According to the Deloitte Center for Technology, Media & Telecommunications, the semiconductor industry had strong growth in 2024, with sales reaching $627 billion.
Experts predict sales of $697 billion for 2025, signaling the industry is on track to reach $1 trillion in chip sales by 2030. The industry must grow at a compound annual growth rate of 7.5% between 2025 and 2030 to hit that target.
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The stock market also reflects industry performance. As of mid-December, the combined market capitalization of the top 10 global chip companies was $6.4 trillion, up 93% year over year and 235% over two years.
However, it is important to note that the companies in the generative AI chip market have led the performance. In contrast, companies without that exposure (automotive, smartphone, computer, and semiconductor) have underperformed the average, explains Deloitte.
Next-generation semiconductor maker faces challenges
One semiconductor maker that has been facing challenges is publicly traded Wolfspeed WOLF. The Durham, North Carolina-headquartered company prides itself on being the creator of the next-generation semiconductor technology, making huge improvements in efficient and sustainable power.
Wolfspeed specializes in silicon carbide (SiC) semiconductors made from silicon and carbon. Its advantages over silicon semiconductors include a breakdown electric field strength 10 times greater than silicon, enabling the configuration of higher voltage (600V to thousands of V) power devices.
This feature makes them suitable for applications requiring high endurance, such as electric vehicles, telecommunication infrastructure, and renewable energy systems. SiCs are also popular for their high mechanical, chemical, and thermal stability.
Wolfspeed shared on May 8 that it was considering a bankruptcy filing after failing to reach an agreement regarding a bond restructuring, reports The Financial Times.
The company currently has $6.5 billion in total debt, including a $1.5 billion senior secured loan held by asset management firm Apollo Global Management.
On May 11, Wolfspeed was thrown a possible lifeline as its junior creditors offered $600 million in rescue financing to refinance a large convertible bond coming due in 2026 and provide fresh capital.
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Wolfspeed’s senior lender controls its ability to issue more secured debt, while convertible bondholders like Balyasny and Shaolin Capital fear a premature bankruptcy. If that happens, Apollo and partners could dominate restructuring, leaving junior creditors at a loss.
Meanwhile, Renesas Electronics gave Wolfspeed a $2 billion advance for future products. In 2024, Wolfspeed secured a $750 million Chips Act deal with the Biden administration — though the funds are still pending.
Confident in its U.S. manufacturing edge over Chinese rivals, Wolfspeed has heavily invested in production, anticipating EV-driven revenue to exceed $800 million annually.
However, EV sales were not hitting the expected numbers.
For the third quarter of fiscal 2025, the company disclosed revenue of $185 million, as compared to $201 million in 2024, and a net loss of $1.86 million, compared to a net loss of $1.18 million in the same period a year ago.
During the earnings call on May 8, Wolfspeed reminded investors about its cost-cutting strategies such as mass layoffs, sharing plans to cut 30% of its senior leadership team and close its 150-millimeter device facility in Durham.
Over the past 12 months, Wolfspeed’s share price dropped 84.35% to $3.71 per share, and its market capitalization has dropped from $4 billion last year to some $574 million at the moment.
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