During the first quarter of fiscal 2025, the Company initiated a headcount reduction and facility closure and consolidation plan intended to optimize its cost structure as the Company accelerates its transition from 150mm to 200mm silicon carbide devices (collectively with the subsequent updates described below, the 2025 Restructuring Plan).

The actions taken under the 2025 Restructuring Plan resulted in the closure of the Company's 150mm device fabrication facility in Durham, North Carolina as well as a realignment of related activities across the geographic regions in which the Company operates. The Company also consolidated its manufacturing footprint for epitaxy products by closing operations at its facility in Farmers Branch, Texas and impairing assets associated with the Saarland, Germany site during fiscal 2025. In addition, the Company took steps to optimize the allocation of resources across various functional groups. The Company also implemented a voluntary separation program for a limited number of eligible employees based on their age and years of service. During the third and fourth quarters of fiscal 2025, the Company increased the scope of the planned headcount reductions, primarily in its Materials Products operations and supporting roles.

The 2025 Restructuring Plan resulted in a cumulative total headcount reduction of approximately 28%. The Company's 150mm device fabrication facility in North Carolina ceased production in the second quarter of fiscal 2026.

The costs incurred as a result of the 2025 Restructuring Plan primarily include severance and employee benefit costs, voluntary termination benefits, and other exit costs that qualify as exit and disposal costs under ASC 420, "Exit or Disposal Cost Obligations". The involuntary severance costs incurred were provided under an ongoing benefit arrangement and were therefore recorded once they were both probable and reasonably estimable in accordance with the provisions of ASC 712-10, “Nonretirement Postemployment Benefits”. Additionally, the Company incurred additional facility closure-related costs related to these activities, including asset-related charges, fixed manufacturing costs that will be eliminated as a result of this plan, and other incremental costs related to the exit of certain facilities.

Including these additional facility closure-related costs, the Company incurred approximately $457 million of total restructuring and related costs, including approximately $73 million of involuntary and voluntary severance costs, approximately $124 million of other closure-related cash costs, and approximately $260 million of charges related to long-lived assets and other non-cash costs, including accelerated depreciation and impairments upon abandonment or disposal of machinery and equipment.

A summary of the charges recognized in the consolidated statements of operations for the period from June 30, 2025 to September 29, 2025, the period from September 30, 2025 to June 28, 2026 and for the fiscal year ended June 29, 2025 resulting from these restructuring activities is shown below:


	Successor	Predecessor
(in millions of U.S. Dollars)	Period from September 30, 2025 to June 28, 2026	Period from June 30, 2025 to September 29, 2025	Fiscal Year Ended June 29, 2025
Accelerated depreciation	$—	$5.6	$33.6
Inventory write-down/scrap	11.7	2.5	—
Other closure-related costs	14.5	10.0	63.5
Total cost of revenue, net	26.2	18.1	97.1

Impairments on abandoned assets	1.8	0.1	170.2
Severance(1)	—	0.1	72.9
Accelerated depreciation(2)	—	—	11.4
Contract termination costs	1.6	2.3	18.6
Other closure-related costs	2.9	1.2	32.0
Restructuring and other expenses	6.3	3.7	305.1
Total	$32.5	$21.8	$402.2

(1 )Employee severance and benefit costs include the early exit program activity.

A summary of the balance sheet activity during the period from June 30, 2025 to September 29, 2025 related to the 2025 Restructuring Plan is shown below:


	Predecessor
(in millions of U.S. Dollars)	As of June 29, 2025	Charges	Usage	September 29, 2025
Employee severance and benefit costs(1)	$25.2	$0.1	($11.9)	$13.4
Contract termination liability	5.5	2.3	(2.0)	5.8
Total	$30.7	$2.4	($13.9)	$19.2

(1)Employee severance and benefit costs includes the early exit program activity.

A summary of the balance sheet activity during the period from September 30, 2025 to June 28, 2026 related to the 2025 Restructuring Plan is shown below:


	Successor
(in millions of U.S. Dollars)	As of September 30, 2025	Charges	Usage	June 28, 2026
Employee severance and benefit costs(1)	$13.4	$—	($12.4)	$1.0
Contract termination liability	5.8	1.6	(3.3)	4.1
Total	$19.2	$1.6	($15.7)	$5.1

(1)Employee severance and benefit costs includes the early exit program activity.

A summary of the balance sheet activity during fiscal 2025 related to the 2025 Restructuring Plan is shown below:


	Predecessor
(in millions of U.S. Dollars)	As of June 30, 2024	Charges	Usage	June 29, 2025
Employee severance and benefit costs(1)	$—	$72.9	($47.7)	$25.2
Contract termination liability	—	18.6	(13.1)	5.5
Total	$—	$91.5	($60.8)	$30.7

(1)Employee severance and benefit costs includes the early exit program activity.

The restructuring liability of $5.1 million at June 28, 2026, relating to severance payments and contract terminations, is recorded in the "accounts payable and accrued expenses" and "other current liabilities" and "other long-term liabilities" line items of the consolidated balance sheets, respectively.

During the second quarter of fiscal 2026, the Company implemented and substantially completed a headcount reduction (the "2026 Restructuring"), of approximately 8%, to better align with business needs as a result of the transition of Wolfspeed's internal chip manufacturing to 200mm and reduced demand for 150mm substrates. The severance and benefit costs related to this initiative were recorded in the second quarter of fiscal 2026 in accordance with the provisions of ASC 712-10, "Nonretirement Postemployment Benefits". No further charges are expected.

A summary of the charges recognized in the consolidated statements of operations through the period from September 30, 2025 to June 28, 2026 resulting from these restructuring activities is shown below:

A summary of the balance sheet activity related to these restructuring activities recognized in accounts payable and accrued expenses in the consolidated balance sheet as of June 28, 2026 follows:


	Successor
(in millions of U.S. Dollars)	As of September 30, 2025	Charges	Usage	June 28, 2026
Employee severance and benefit costs	$—	$7.5	($6.7)	$0.8
Total	$—	$7.5	($6.7)	$0.8

During the fourth quarter of fiscal 2026, the Company approved a restructuring plan designed to further optimize its organizational structure with current business needs. The Company recorded severance and related benefit costs in accordance with the provisions of ASC 712-10, "Nonretirement Postemployment Benefits". This planned workforce reduction of approximately 6% of the employee population is expected to occur by the first half of fiscal 2027. The Company expects to incur approximately $4 million of total restructuring costs related to involuntary severance costs, with the remainder being incurred during the first half of fiscal 2027.

A summary of the balance sheet activity related to these restructuring activities recognized in accounts payable and accrued expenses in the consolidated balance sheet as of June 28, 2026 follows:


	Successor
(in millions of U.S. Dollars)	As of September 30, 2025	Charges	Usage	June 28, 2026
Employee severance and benefit costs	$—	$3.0	$—	$3.0
Total	$—	$3.0	$—	$3.0