Wolfspeed reports investment losses, focuses on new Siler City plant

Company is optimistic about the future of its Siler City semiconductor operation


SILER CITY — Wolfspeed disclosed a net loss of $402.7 million in its first-quarter earnings report for the 2024 fiscal year, despite substantial investments and state incentives aimed at expanding its semiconductor manufacturing presence in Siler City.

North Carolina has extended a state appropriation and a Job Development Investment Grant (JDIG) to Wolfspeed, potentially worth a combined $133.6 million, with $57.5 million guaranteed. These incentives were offered to encourage the company to establish its manufacturing plant in the area.

Wolfspeed recently began hiring for the 1,800 Siler City plant jobs the company believes it will need to fill by 2030.

According to the earnings report, Wolfspeed invested $442 million in property and equipment purchases, underscoring its commitment to long-term growth. CEO Gregg Lowe highlighted the strategic importance of these investments, acknowledging the current financial losses as a necessary step toward future advantages.

"The market opportunity for silicon carbide stands at $6 billion today, up from $400 million just five years ago," Lowe stated in the Q1 fiscal earnings report. "This further validates our strategy to invest now to capitalize on the immense opportunities at hand, and the significant opportunity in the future."

In an effort to mitigate some of the financial impact of these investments, Wolfspeed has agreed to sell its RF product line for an estimated $75 million in cash, along with $50 million in shares of the acquiring company, MACOM Technology Solutions Holding Inc.

The company's Mohawk Valley Fab, a $1 billion initiative, began generating revenue in the previous fiscal quarter, which has helped to balance the investment costs. Despite the substantial net loss this quarter, Wolfspeed experienced a 4% increase in year-over-year quarterly revenue growth, with its debt constituting only 72.7% of its assets.

Looking ahead to the second fiscal quarter, Wolfspeed anticipates a considerably reduced net loss, targeting between $131 million and $153 million. The company also predicts that revenue could rise by up to $30 million or decrease by as much as $5 million.

Wolfspeed is preparing for and investing in long-term growth, which will take several years to fully materialize. Lowe remains confident that the investments will yield significant returns, particularly for Chatham County and the company itself.

"The capacity of our new materials factory in Siler City will increase our wafer production by 10 times," Lowe said. "We will be better positioned to support our customers' needs going forward and, as the only pure-play silicon carbide company in the market today, we believe that we are best positioned to capitalize on a decades-long tailwind that represents a $20 billion addressable market by 2030."