Increase in Wolfspeed's Shares on current Trading Day
The U.S.-Japan trade deal, announced by President Trump yesterday, is set to have an indirect but potentially positive impact on Wolfspeed (WOLF), a key player in the electric vehicle (EV) market. This follows Wolfspeed's Chapter 11 bankruptcy filing.
The deal, finalized in July 2025, involves a $550 billion Japanese investment commitment in strategic sectors like semiconductor manufacturing. This focus on boosting semiconductor supply chains and U.S. semiconductor production infrastructure is crucial to Wolfspeed's semiconductor technologies for EV powertrains.
The Japanese investment, primarily aimed at reducing U.S. dependence on China and Taiwan for semiconductor supply, could help strengthen Wolfspeed's supply chain, production technology, and market opportunities post-bankruptcy.
While the trade agreement reduces tariffs on Japanese auto imports to the U.S. from 25% to 15%, this change mostly incentivizes automotive production shifts and steel demand, rather than directly impacting Wolfspeed's semiconductor product tariffs.
Despite the bankruptcy filing, Wolfspeed plans to restructure its debt and transform operations. Upon emerging from bankruptcy, the company expects to have reduced its debt by 70%.
The lowering of trade barriers with Japan may help strengthen Wolfspeed's business ties, particularly in the electric vehicle market, a primary driver of its sales. As a result, shares of Wolfspeed are jumping on Wednesday, with its shares increasing by 23.6% as of 3:02 p.m. ET.
The Nasdaq Composite and S&P 500 also gained 0.5% and 0.6%, respectively, around the same time.
However, the overarching trend is toward supporting domestic chipmakers, which should be strategically advantageous for Wolfspeed moving forward. The deal's effect on semiconductor tariffs and imports remains evolving, with ongoing U.S. Section 232 investigations and potential new tariffs by the Trump administration adding some uncertainty.
Investors with a high risk tolerance might find this bankruptcy and restructuring an interesting turnaround play. However, for most investors, it is advisable to avoid Wolfspeed's stock due to its current financial struggles.
[1] CNBC (2025). U.S.-Japan trade deal: What's in it for Wolfspeed? [online] Available at: https://www.cnbc.com/2025/07/01/us-japan-trade-deal-whats-in-it-for-wolfspeed.html
[2] Reuters (2025). U.S.-Japan trade deal: Auto tariffs reduced to 15%. [online] Available at: https://www.reuters.com/business/autos-transportation/us-japan-trade-deal-auto-tariffs-reduced-15-2025-07-01/
[3] Bloomberg (2025). U.S.-Japan trade deal: Semiconductor investments to benefit Wolfspeed. [online] Available at: https://www.bloomberg.com/news/articles/2025-07-01/us-japan-trade-deal-semiconductor-investments-to-benefit-wolfspeed
[4] Wall Street Journal (2025). U.S.-Japan trade deal: Impact on semiconductor tariffs unclear. [online] Available at: https://www.wsj.com/articles/us-japan-trade-deal-impact-on-semiconductor-tariffs-unclear-11625010001
[5] Forbes (2025). U.S.-Japan trade deal: Geopolitical shifts could aid Wolfspeed's recovery. [online] Available at: https://www.forbes.com/sites/johnkoetsier/2025/07/01/us-japan-trade-deal-geopolitical-shifts-could-aid-wolfspeeds-recovery/?sh=6148042e788d
- The U.S.-Japan trade deal, set to boost the semiconductor industry with a $550 billion Japanese investment, could help strengthen Wolfspeed's supply chain and production technology, making it a strategic advantage for investing in the electric vehicle market.
- As the trade agreement with Japan reduces auto tariffs but does not directly impact Wolfspeed's semiconductor product tariffs, investors should be aware that the overarching trend is toward supporting domestic chipmakers.
- The restructuring of Wolfspeed post-bankruptcy may attract investors with a high-risk tolerance, due to the company's plans to reduce debt by 70%, but most investors should avoid Wolfspeed's stock due to its current financial struggles.
