Chipmaker Wolfspeed forecasts quarterly revenue below estimates as EV sales growth slows

Monolithic Power Systems

01/05/2024 22:15

May 1 (Reuters) - Chipmaker Wolfspeed  WOLF.N  forecast
current-quarter revenue below estimates on Wednesday as
automakers grapple with high inventory levels due to
slower-than-expected EV sales growth.
    Shares of the company, which counts General Motors  GM.N 
and Mercedes-Benz  MBGn.DE  among its customers, fell about 4%
in extended trading.
        Wolfspeed makes chips out of silicon carbide, a more
energy-efficient material than standard silicon for tasks such
as transmitting power from an electric car's batteries to its
motors.
    EV demand has been growing at a slower-than-expected pace,
attributed to high interest rates that lead to chip inventory
build-ups at the automakers' factories.
    The company said it expects fourth-quarter revenue between
$185 million and $215 million, compared with analysts' estimate
of $225.8 million, according to LSEG data.
    "While the industrial and energy end markets pose short-term
headwinds to our results, we firmly believe in the strength of
our long-term prospects as the electrification of all things
continues across a broad set of applications," CEO Gregg Lowe
said in a statement.
    Tesla  TSLA.O  reported a drop in quarterly deliveries in
the first quarter of 2024, as it expects "notably slower" growth
this year since automakers have pivoted to produce and sell more
gasoline-electric hybrid vehicles.
    Wolfspeed reported March-quarter revenue of $200.7 million,
compared with estimates of $201.1 million, while net loss
widened to $1.18 per share from 80 cents per share a year
earlier.

 (Reporting by Akash Sriram in Bengaluru; Editing by Alan
Barona)
 ((Akash.Sriram@thomsonreuters.com; On X as @HoodieOnVeshti;
+91-74116-87774;))