Wolfspeed shares surged 32% on Tuesday, after the chipmaker successfully emerged from Chapter 11 bankruptcy with a substantially reduced debt load.

The move has restored investor confidence in the company's prospects to become a leading provider of silicon carbide semiconductors, known for their energy efficiency, to electric-vehicle makers amid growing electrification and increasing chip content in automobiles.

"Wolfspeed has emerged from its expedited restructuring process, marking the beginning of a new era," CEO Robert Feurle had said on Monday.

"We are well positioned to capture rising demand in end-markets, such as AI, EVs, industrial and energy, that are rapidly growing and recognizing silicon carbide's potential," Feurle said.

Wolfspeed had filed for bankruptcy protection in June due to deepening economic uncertainty stemming from changing U.S. trade policies and weakening demand.

Since then, it has restructured, worked toward extending debt maturities and made significant leadership changes, including naming industry veteran Van Issum as its chief financial officer.

The company said on Monday it had achieved its goal of reducing overall debt by about 70%.

Wolfspeed, however, has canceled all legacy shares in its bankruptcy restructuring, issuing just 1.3 million new shares to existing investors at a steep exchange ratio of less than 1% per old share.

This reduces prior shareholders' stake since the bulk of the new equity goes to creditors and backstop investors, leaving legacy holders with only a sliver of ownership.

Owing to analysts' expectations of continued losses at Wolfspeed, the company carries a negative multiple. That compares with the 12-month-forward price-to-earnings ratio of 17.9 for Onsemi and 16.7 for NXP, according to data compiled by LSEG.