Wolfspeed to close 1 of its Durham factories as stock continues to slump
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The Durham semiconductor firm Wolfspeed plans to close one of its silicon carbide wafer production facilities in Durham as the company tries to cut costs, executives told investors on Wednesday.
Why it matters: Wolfspeed told Axios that it could not yet share how many employees will be impacted by the closure and reiterated that it is still committed to Durham and opening a new, 1,800-job plant in Chatham County.
What they're saying: The move only affects the device fab on the Durham campus — the company's headquarters and other nearby facilities will remain in Durham, Wolfspeed spokesperson Kris Camacho told Axios in an email.
- "We remain strong in our commitment to North Carolina, with a focus on the continued progress of our materials fab in Siler City, a multi-billion dollar investment which will bring thousands of jobs to the area," Camacho added.
- The company will release more information on the factory's closure by its next earnings call in November, Camacho said.
Zoom in: Wolfspeed CEO Gregg Lowe said the closure of the Durham plant was about slowing demand for its 150-millimeter silicon carbide wafers and cutting costs.
- The company has been moving toward producing a 200-millimeter wafer at a plant in New York, which has cost advantages over the Durham plant.
- Wolfspeed also noted on the call that an equipment incident in June at the Durham plant added more costs and lowered output. Lowe didn't share details of the incident, but added "it's been rectified and repaired and it's behind us."
State of play: Wolfspeed's stock has suffered this year — down more than 70% — as it has dealt with supply chain issues and softening demand for electric vehicles, one of the biggest industries that uses its semiconductors.
- Earlier this year, an activist investor bought shares of Wolfspeed and urged it to review its strategy and even consider selling the company.
- In June, Wolfspeed also paused plans to open a factory in Germany.
- Despite a slowdown in the EV market, Lowe noted that revenue from that industry in that sector is still growing and that they have "merely scratched the surface" of silicon carbide's potential in other industries
What they're saying: "The market is clearly not valuing the company consistent with our technology, the business we've built or the strategic potential of the business," Lowe told investors. "In light of this disconnect, the management team and the board of directors routinely consider alternatives to enhance value for shareholders."