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Investing.com-- Shares of Renesas Electronics Corp (TYO:6723) fell in Tokyo trade on Tuesday after Wolfspeed Inc (NYSE:WOLF), a major U.S. supplier of the company, filed for bankruptcy and outlined plans to slash its debt commitments.
Renesas shares fell 2.5% to 1,744.0 yen by 00:01 ET (04:01 GMT), compared to a 1% drop in the Nikkei 225 index.
Wolfspeed, a major supplier of the firm, filed for bankruptcy on Monday and outlined plans for a creditor-backed restructuring of $4.6 billion in debt.
Of this debt, roughly $2.1 billion is from Renesas, which the Japanese chip firm had provided to Wolfspeed in 2023 under a silicon carbide wafer supply agreement.
Under Wolfspeed’s bankruptcy proceedings, Renesas agreed to convert the $2 billion into convertible notes, Wolfspeed equity, and warrants, the company had said last week. This conversion will now take effect after Wolfspeed’s bankruptcy filing.
Renesas warned last week that it would see a loss of roughly 250 billion yen ($1.7 billion) from Wolfspeed’s debt restructuring. But it will also hold 38.7% of Wolfspeed’s outstanding shares after its debt restructuring is completed.
The silicon carbide company is the second-largest bankruptcy so far in 2025, was hit by the Donald Trump administration reassessing Biden-era grants to chip companies.
The company had raised going-concern doubts in May, citing increased uncertainty over Trump’s trade policies and sustained pressure from weakening demand.