I havent paid much attention to Cree in a long time but I am wondering if there is some real value that the market is underpricing in Wolfspeed. They did $71 million in revenue in Q2 and plan on doubling their capacity in the near-term. The gross margins are significantly above the corporate average.
Most importantly, the two biggest markets that SiC on GaN enable are electric cars and 5G. Both are at the knee of their growth curves. Cree has said that they are evaluating strategic alternatives for Wolfspeed and will announce something soon.
Demand and excitement for our Wolfspeed products, silicon carbide power, as well as gallium nitride RF, remains very strong. Our silicon carbide platform is at the heart of the auto industry’s transition to electric vehicle. In the past six months or so, China announced the target to sell 7 million electric vehicles in 2025, nearly 20 times the level seen in 2016. France, Norway and the UK have announced timelines for the complete elimination of gasoline and diesel cars. GM, Toyota, Volkswagen, Ford, Daimler and BMW, have made announcements about investments in electric vehicles. Collectively, they have announced additional investments of nearly $60 billion in electric vehicles, with a significant number of new electric vehicle introductions over the coming decade.
We're in the early stage of a substantial opportunity as EVs become more prevalent on the roads across the world, and our leadership position in silicon carbide technology positions us extremely well to capitalize on that strong demand that this technology will have over the coming decade. Likewise, the recent release of the new 5G radio standard sets the stage for large scale trials and commercial deployment, giving us a meaningful opportunity for our gallium nitride business over the coming years. GAN RF transistors are better able to satisfy needed performance in the primary spectrum bands being allocated for 5G services, those between 3.3 gigahertz and 6 gigahertz, versus traditional silicon LDMOS transistors. We have a leadership position in GAN for these types of applications and believe the distinct advantages will accelerate its adoption in the marketplace.