As stock sinks, Wolfspeed says $5B NC plant is ‘underway.’ When production will begin
During an investor call Wednesday, Wolfspeed executives provided an update on its incoming $5 billion factory in western Chatham County.
Wolfspeed CEO Gregg Lowe noted construction at the site was “well underway,” and later told an analyst the factory will start manufacturing silicon carbide crystals next summer.
“June quarter of next year, we would begin producing 200-millimeter crystals out of that facility,” he said, adding “the building foundation is in place, and we’ve now started construction on the shell of the building.”
The 445-acre facility is named after John Palmour, a Wolfspeed cofounder and longtime executive who died in November. By 2030, the company has pledged to create 1,800 jobs at the plant outside Siler City, adding to a workforce that already includes 2,500 Triangle-area employees.
An hour’s drive west of Raleigh, the Chatham County factory will be used to convert raw silicon carbide into blank circular wafers, a necessary step to make functioning chips.
Semiconductors are a class of materials used to create chips that power a wide-range of appliances. Wolfspeed, formerly known as Cree, specializes in making a unique type of semiconductor called silicon carbide, which the company praises as more efficient.
Once complete, Wolfspeed anticipates the John Palmour Manufacturing Center for Silicon Carbide will increase its wafer production capacity by a factor of 10. The company currently manufactures wafers at facilities in Durham before it ships them to a chip fabrication facility in New York’s Mohawk Valley.
“The adoption of silicon carbide is driving the need for more capacity, and we’re seeing continuous upward pressure on demand for both devices and materials,” Lowe told investors. “The (electric vehicle) revolution continues to be the driving force for this adoption.”
Disappointing guidance drops Wolfspeed stock
The Durham semiconductor producer saw its share price drop 14% in after-hours trading after releasing new quarterly earnings and 2024 projections.
While Wolfspeed continued to grow revenue, fueled by global demand for silicon carbide, it anticipates incurring higher-than-expected losses heading into next year.
On Wednesday’s investor call, analysts grilled Wolfspeed executives about these disappointing numbers, including low output at the company’s recently opened “fab” facility in Mohawk Valley. Wolfspeed told investors “Incremental growth” at this plant will be the primary driver of future revenue growth.
During fiscal year 2023, Wolfspeed grew revenue by 24% compared to the previous year. Yet its net losses also climbed, from $295 million in 2022 to $330 million.
This story was originally published August 17, 2023 at 5:30 AM.
