Restructuring

12 Months Ended

Jun. 29, 2025

Restructuring and Related Activities [Abstract]

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 are expected to ultimately result 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 initiated plans to consolidate 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 is taking 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 is expected to result in a cumulative total headcount reduction of approximately 25%. As of June 29, 2025, the 2025 Restructuring Plan resulted in a cumulative total headcount reduction of approximately 23%, and the remainder is expected to occur over the next six months.

The costs that will be 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 has incurred, and over the next six months will continue to incur, 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 expects to incur approximately $450 million to $500 million of total costs, including approximately $75 million of involuntary and voluntary severance costs, approximately $160 million of other closure-related cash costs, and approximately $265 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 through the fourth quarter of fiscal 2025 resulting from these restructuring activities is shown below:


			Fiscal Year Ended
(in millions of U.S. Dollars)			June 29, 2025
Accelerated depreciation			33.6
Other closure-related costs			63.5
Total cost of revenue, net			97.1

Impairments on abandoned assets			170.2
Severance(1)			72.9
Accelerated depreciation			11.4
Contract termination costs			18.6
Other closure-related costs			32.0
Restructuring and other expenses			305.1
Total			402.2

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

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


(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 $30.7 million at June 29, 2025, 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.