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Wolfspeed faces ramp up challenges at Mohawk SiC power fab

Wolfspeed faces ramp up challenges at Mohawk SiC power fab

Business news |
By Nick Flaherty



The latest financial figures from Wolfspeed have given some insight into the challenges of its ramp up at its 200mm silicon carbide (SiC) power fab in the US.

The Mohawk Valley Fab contributed $12 million in revenue in the second quarter of the financial year at Wolfspeed, a 3x increase from the prior quarter. It expects to double this next quarter, and the company says it ships 60% of the silicon carbide device sin the market.

The underutilisation of the fab is pulling down the margins, to 13.3% compared to 32.6% previously. The company expects to achieve 20% utilization by June 2024. It is still working on optimizing factory tool utilization to account for ‘one of a kind’ tools and avoid down time.

The fab has qualified more than 12 additional products including two of the company’s most complicated automotive devices and has received IATF automotive certification. Electric car maker Lucid is a key lead customer.

The company says it has power device design-ins of $2.1 billion, with $2.9 billion in Q2, and over 75% of these related to automotive applications. There is a backlog of over $150 million of 200mm devices, which provides for the next three quarters of revenue growth, it says.

The Mohawk Valley Fab began revenue generating production at the end of fiscal 2023 and the costs of operating this facility going forward will be primarily reflected in cost of revenue. These costs are expected to be substantial as Wolfspeed ramps up the facility to the expected utilization level. Wolfspeed incurred $10.5 million of factory start-up costs and $35.6 million of underutilization costs in the second quarter of fiscal 2024.

“We’re proud of our results this quarter, which reflect robust execution of our strategy and fortify our vision for the future of Wolfspeed and silicon carbide,” said Wolfspeed CEO, Gregg Lowe.

 “We have made considerable progress at our Mohawk Valley facility, tripling revenue sequentially. Our successful scale-up of 200mm wafer production and continued qualification of high-quality EV products on 200mm substrates are critical steps in meeting the continued customer demand. This is demonstrated by a record $2.9 billion of design-wins, predominantly in the EV sector across multiple OEMs. Our steadfast commitment to our long-term goals is bolstered by the conversion of our design-ins into significant design-wins.”

For its third quarter of fiscal 2024, Wolfspeed targets revenue from continuing operations in a range of $185 million to $215 million, down from , with a loss of $134 million to $155 million.

As part of expanding its production footprint to support expected growth, Wolfspeed is incurring significant factory start-up costs relating to facilities the Company is constructing or expanding that have not yet started revenue generating production. These factory start-up costs have been and will be expensed as operating expenses in the statement of operations.

The company is keen to point to a $275m extension to a deal to supply 150mm silicon carbide bare die and epitaxial wafers to an unnamed semiconductor company. Wolfspeed already has wafer supply deals with Infineon, Renesas and onsemi.

“As the global leader in silicon carbide wafer production, Wolfspeed is uniquely positioned to be a critical supplier of high-quality and advanced silicon carbide materials at scale. We will continue to be an important partner to power device manufacturers who need the highest-quality silicon carbide wafers to service their customers,” said Dr. Cengiz Balkas, SVP and GM of Materials for Wolfspeed. “This agreement further strengthens our long-time partnership with a best-in-class power semiconductor manufacturer. Our collective efforts are helping to address the rapidly expanding opportunity for silicon carbide and better address the unfulfilled demand that exists in the marketplace today.”

The company is currently expanding its manufacturing capacity in the United States and has plans to open a new, automated materials factory in Siler City, North Carolina later this year that will produce 200mm silicon carbide wafers. The new materials factory will increase Wolfspeed’s current materials production capacity by ten times.

www.wolfspeed.com

 

 

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