Wolfspeed’s new factory reaches milestone, Durham plant incident affects outlook

wolf speed(New York Stock Exchange: Wolf) A new silicon carbide manufacturer in Mohawk Valley, New York, has reached 20% chip start-up, a critical milestone, but an incident at its Durham, North Carolina, facility prompted the semiconductor company to update its guidelines.

Involved decreased 1% during Pre-market trading on Tuesday.

The Durham 150mm plant “suffered an equipment incident… that resulted in a temporary reduction in capacity while the incident was addressed,” the company said.

“We quickly identified and analyzed the equipment incident at our plant for the Durham 150mm, and we remain focused on execution as we move with urgency to continue this first-of-its-kind ramp,” said Wolfspeed CEO Greg Lowe.

Wolfspeed does not anticipate any impact on fourth-quarter revenue from the incident, as it still expects revenue to range from $185 million to $215 million. The analyst consensus expects revenue to reach $201 million.

However, first-quarter fiscal 2025 revenues may be negatively impacted by $20 million.

Also, the expected adjusted loss per share in the fourth quarter now ranges from $0.96 to $0.83. This is steeper than previous forecasts, which ranged from a loss of $0.86 to $0.72 per share. Analysts were expecting a loss of $0.82 per share.

The company is expected to announce fourth-quarter results on August 14.

Wolfspeed also announced that its John Palmour Manufacturing Center in Siler City, NC, “recently installed and activated primary furnaces less than a year after vertical construction began.”

It is expected to be the largest silicon carbide materials facility in the world when completed, and to begin delivering wafers to the Mohawk Valley plant by next summer.

“Wolfspeed announced significant milestones, with Mohawk Valley utilization reaching 20% ​​and JP on track to qualify for August,” TD Cowen analyst Joshua Buchalter said in a note. “But the equipment incident is the latest in a series of hurdles that have tested investors’ patience.”

The latest incident comes on the heels of a report last week that Wolfspeed plans to delay construction of a $3 billion chip factory in Germany. Construction of the plant, which was scheduled to make computer chips used in electric cars, has been delayed until at least mid-2025, two years later than originally planned.

Wolfspeed has cut capital spending following weakness in electric vehicle markets in the European Union and the United States, and has shifted its focus to ramping up production at its New York facility.