Wolfspeed: Anatomy of a Failed Company
I’ve written numerous articles on silicon carbide (SiC) starting in March 2022 with a Seeking Alpha article entitled II-VI: Eyes On Carbide Automotive Chip Market As Semiconductor Shortage Ends. I wrote on this topic to alert readers of my marketing report at The Information Network entitled “Power Semiconductors: Markets, Materials and Technologies.” Of course II-VI acquired Coherent (COHR) and renamed the company Coherent.
Since then, I’ve written more than a dozen articles on SiC, focusing on companies such as onsemi (ON), STMicroelectronic (STM), and Wolfspeed (WOLF). My first article on WOLF came in my September 21, 2022 Seeking Alpha article entitled Wolfspeed: Separating Automotive SiC Hype From Reality, when I rated the company a Sell, and later a Strong Sell following more miscues.
On November 18, 2024, the board of directors fired the CEO, as the cracks in the company’s foundation are become more apparent, but it was two years too late. The share price had been dropping since a high of $136.00 on November 10, 2021. By then, the share price had dropped to $8.36.
Shares crashed more than 60% in early trading on Wednesday May 21, 2025 after The Wall Street Journal reported that the Durham, N.C.-based company has prepared to file bankruptcy in the next few weeks.
This article consolidates key insights from my past analyses and explains why Wolfspeed remains a strong sell. Below are six issues I’ve identified that shows my rational for this rating.
1. Ten Quarters Without Profitability
Wolfspeed has been unable to turn a profit for seven consecutive quarters, a critical indicator of its ongoing operational and financial struggles. The company's Non-GAAP EPS has remained negative, with no sign of improvement. This performance is particularly concerning given the growth of the Silicon Carbide (SiC) market and the successes of competitors like onsemi and STM.
Chart 1 illustrates Wolfspeed's inability to achieve profitability over the last seven quarters, with negative EPS widening through Q2 2025 ending December 2024.
Chart 1