Wolfspeed Inc. (previously known as Cree) saw its WOLFshares drop by more than 5% in after-hours trading on Wednesday, following a presentation from Tesla Inc. executives. During the investor day presentation, Tesla executives revealed that their next-generation car would require 75% less silicon carbide. This news had a significant impact on Wolfspeed, a semiconductor company that specializes in silicon-carbide chips.
Silicon carbide chips are used in electric vehicles due to their resistance to heat. When Tesla executives announced their plans for the next-generation powertrain, they stated that the need for silicon carbide would be drastically reduced. This news caused Wolfspeed’s stock to plummet in after-hours trading. Tesla’s stock also declined by more than 5% in the same period.
The news of reduced silicon carbide requirements has raised questions about Wolfspeed’s future. The company has been heavily investing in the development of silicon-carbide chips, and it is unclear how the reduced demand will affect them. The company’s stock is down more than 17% since the beginning of the year, and the news of reduced silicon carbide requirements is likely to further hurt the stock.
Wolfspeed’s CEO, Gregg Lowe, has attempted to reassure investors by stating that the company’s silicon-carbide chips are still essential for electric vehicles. He argued that the chips are still needed for powertrain applications, such as inverters, onboard chargers, and DC-DC converters. He also noted that the company’s chips are still needed for power electronics applications, such as electric motors, solar inverters, and industrial drives.
Despite Lowe’s reassurances, the news of reduced silicon carbide requirements has sent shockwaves through the industry. Wolfspeed’s stock has dropped significantly since the news broke, and it is unclear how the company will be impacted in the long-term. The company’s future is now in doubt, and investors are waiting to see how the company will respond to the news.
In the short-term, Wolfspeed’s stock is likely to remain volatile. The company’s future is uncertain, and investors are likely to remain cautious until more information is released. Despite the news of reduced silicon carbide requirements, Wolfspeed’s CEO has argued that the company’s chips are still essential for electric vehicles. Whether or not this will be enough to reassure investors remains to be seen.
