NC chipmaker Wolfspeed to close Durham HQ factory as company seeks more cost savings
The Durham semiconductor manufacturer Wolfspeed plans to close a production facility near Research Triangle Park as the chipmaker faces capital constraints amid a rough year on Wall Street. “We believe these actions can deliver meaningful cost reductions,” Wolfspeed CEO Gregg Lowe told investors during a call Wednesday. Wolfspeed said it “will be providing more detail” around the planned factory closure at its next earnings call in November. The company employs around 4,500 people worldwide, most based in North Carolina. Formerly called Cree, Wolfspeed is the world’s leading producer of a unique type of semiconductor chip made from silicon carbide. At this site, Wolfspeed makes 150-millimeter substrates, the standard wafer size in the industry. These substrates are then cut into tiny square “die,” which once fabricated, power electric vehicles and solar converters, among other applications. But Wolfspeed has pioneered production of a larger 200-millimeter substrate, which Lowe said offers “significant die cost advantages.” The company finalizes this bigger substrate at its fabrication factory in New York State’s Mohawk Valley and plans to produce more 200-millimeter wafers at its incoming materials factory near Siler City. “Construction continues to progress well (at Siler City),” Lowe said, noting the facility is on schedule to deliver 200-millimeter wafers to the Mohawk Valley site by next summer. Despite progress toward this larger wafer, Wolfspeed has seen its stock price tumble in 2024, down nearly 70% since Jan. 1 (as the overall market has risen). Its shares closed Wednesday at $13.50, well below Wolfspeed’s $120 share price in September 2022. Since then, the company has battled supply delays and concerns over weakening demand for electric vehicles. On Wednesday, Lowe said “the market is clearly not valuing the company consistent with our technology, the business we built, or the strategic potential of the business.” Investors appeared to respond favorably to Wolfspeed’s decision to close its Durham production factory as the company’s share price rose 9% after the market closed Wednesday. In another bit of optimistic news for the company, Lowe said Wolfspeed is negotiating final terms to receive federal funding through the CHIPS Act, which set aside $52 billion in grants for domestic producers of semiconductors and created a federal tax credit to subsidize projects like the new Siler City factory.
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