DURHAM, N.C. - Wolfspeed, Inc. (NYSE: NYSE:WOLF), a leader in silicon carbide technology, announced that its Mohawk Valley silicon carbide fabrication facility has achieved a 20% wafer start utilization rate.
The company's Building 10 Materials facility has also met its 200mm wafer production goal to support the Mohawk Valley Fab's projected 25% utilization by the end of 2024.
The Mohawk Valley facility has been recognized for its sustainability efforts with a LEED Silver certification. This facility is unique as the first of its kind designed for fully automated 200mm silicon carbide production, enhancing Wolfspeed's position in the market.
In Siler City, North Carolina, Wolfspeed's John Palmour Manufacturing Center has installed and activated its initial furnaces within one year of vertical construction. The company expects the facility to be ready to supply wafers to Mohawk Valley by the summer of 2025.
However, Wolfspeed also reported an equipment incident at its Durham 150mm device fab, which temporarily reduced capacity. The issue has been resolved, and the company anticipates returning to targeted utilization levels by August. Despite the setback, Wolfspeed does not foresee a significant impact on its fourth-quarter revenue, although it projects an underutilization impact and other related costs.
Wolfspeed's fiscal fourth-quarter 2024 revenue outlook remains at $185 million to $215 million, with a potential negative impact of about $20 million on the first quarter of 2025 revenue. The company estimates fourth-quarter GAAP gross margins between (4%) to 4% and non-GAAP gross margins from 0% to 8%. The projected non-GAAP net loss for the fourth quarter ranges from $122 million to $105 million, excluding certain expenses.
President and CEO Gregg Lowe expressed confidence in the company's vertical integration strategy and its ability to meet facility targets, emphasizing rapid resolution of the Durham fab incident and continued focus on execution.
The news above is based on a press release statement from Wolfspeed, Inc.
In other recent news, Wolfspeed has delayed the construction of its $3 billion chip plant in Germany, citing a softened EV market and a shift in focus to its New York site. The company is also facing pressure from investor Jana Partners to enhance shareholder value.
Meanwhile, Mizuho maintained its neutral rating on Wolfspeed shares but increased the price target to $28.00, reflecting revised estimates for the company's future revenues and earnings per share. Deutsche Bank (ETR:DBKGn) and TD Cowen have revised their price targets for Wolfspeed, citing weaker guidance and concerns about the company's market prospects, respectively. JPMorgan (NYSE:JPM) and William Blair also adjusted their outlooks on Wolfspeed, following the company's third fiscal quarter results and delays in the anticipated ramp-up at the company’s Mohawk Valley facility.
InvestingPro Insights
As Wolfspeed, Inc. (NYSE: WOLF) continues to make strides in silicon carbide technology and production, the company's financial health and market performance remain a focal point for investors. According to real-time data from InvestingPro, Wolfspeed currently holds a market capitalization of $2.89 billion. Despite the company's technological advancements, it is operating with a negative P/E ratio of -3.67, indicating that it is not currently profitable. This aligns with an InvestingPro Tip highlighting that analysts do not anticipate the company will be profitable this year.
Additionally, the company's stock has experienced significant volatility, with a one-year price total return of -52.3%, reflecting the challenges faced in the market. This is further supported by another InvestingPro Tip which notes that Wolfspeed operates with a significant debt burden and has a valuation that implies a poor free cash flow yield.
Investors looking for a deeper analysis of Wolfspeed's financial outlook and stock performance can find additional insights and metrics on InvestingPro. For those interested in premium features, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. There are 13 additional InvestingPro Tips available for Wolfspeed, offering a comprehensive overview of the company's financial health and market potential.
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