Troubled chipmaker Wolfspeed said on Sunday that it plans to file for bankruptcy in the United States under a restructuring agreement reached with creditors. The agreement will provide it with new financing and reduce its debt by nearly 70%.

In May, Wolfspeed raised questions about its continued operations as economic uncertainty from changes in US trade policy increased, coupled with weak demand, triggering a series of financial challenges.

In a statement, Wolfspeed said the restructuring agreement reached with creditors and Renesas Electronics' US subsidiary will bring $275 million in new financing, support from some existing creditors, and help reduce $4.6 billion in debt.

Wolfspeed plans to seek approval for its pre-packaged plan and then emerge from bankruptcy by the end of the third quarter of 2025.