Wolfspeed (WOLF) 6 Nov 24 2025 Q1 Earnings call transcript

In Wolfspeed Inc.'s Q1 Fiscal Year '25 earnings call, management provided insights into the company's strategic direction and financial performance, highlighting a focus on solidifying its capital structure, simplifying the business, and capitalizing on the growing demand for silicon carbide in the global shift towards electric vehicles (EVs) and industrial and energy markets. The call revealed several key themes and trends that underscored the company's confidence in its growth prospects and its ability to navigate challenges in a dynamic industry landscape.

Strategic Direction and Priorities

CEO Gregg Lowe outlined Wolfspeed's strategic direction, emphasizing the importance of solidifying its capital structure and positioning its Mohawk Valley device and North Carolina materials facilities to generate an annual targeted revenue of approximately $3 billion. The company's strategic focus on 200-millimeter silicon carbide technology is a significant differentiator, aiming to enhance yields, improve economics, and position Wolfspeed as a leader in the market. This strategic move is expected to lower costs and accelerate the path to profitability, as well as capitalize on the structural and long-term growth demand for silicon carbide in the EV and industrial sectors.

Financial Performance and Guidance

The call highlighted Wolfspeed's financial performance, with revenue of $195 million for the quarter, slightly below the midpoint of guidance. While power revenue declined quarter-over-quarter, the company reported $49 million in power device revenue from the Mohawk Valley fab, surpassing the Durham fab for the first time. The transition to 200-millimeter technology is expected to continue, with the revenue from this fabrication process exceeding that of the legacy Durham fab in the first quarter. The company also provided guidance for Q2 2025, targeting revenue between $160 million to $200 million, reflecting the current macro environment and demand visibility related to EVs.

Investments and Funding

Wolfspeed's recent funding milestones were a significant highlight, with the company securing $750 million in proposed direct funding under the CHIPS & Science Act and $750 million in committed debt funding from a group of investors. These funds, coupled with an estimated $1 billion of Section 48D cash tax refunds, provide Wolfspeed with up to $2.5 billion of incremental funding to support its U.S. capacity plan. This funding is a testament to the quality of Wolfspeed's products and its role in the broader semiconductor industry.

Market Conditions and Challenges

The call also addressed market conditions and challenges, particularly in the industrial and energy sectors. While demand in these sectors remains weak, the company is seeing an increase in end customer demand as inventory levels decline. The market is expected to recover in the first half of calendar 2025, with Wolfspeed poised to support the increased demand. The transition to EVs and the shift towards silicon carbide technology in various industries are seen as key growth opportunities, with Wolfspeed positioned to capitalize on these trends.

Conclusion

Wolfspeed's Q1 Fiscal Year '25 earnings call underscored the company's strategic focus on capitalizing on the growing demand for silicon carbide technology in the EV and industrial sectors. The company's solid financial performance, strategic investments, and ability to navigate market challenges position Wolfspeed for long-term success in a dynamic industry landscape. As Wolfspeed continues to execute on its strategic priorities, it remains well positioned to capitalize on the opportunities and challenges presented by the global shift towards EVs and other high-growth markets.