Chipmaker Wolfspeed projects revenue below estimates on weak auto demand, shares sink
Nov 6 (Reuters) -Wolfspeed WOLF.N forecast quarterly revenue below estimates on Wednesday and said it would book $174 million in restructuring charges for the planned closure of a facility, as the chipmaker deals with sluggish demand from automotive customers.
Shares of the company, which counts General Motors GM.N and Mercedes-Benz MBGn.DE among its customers, fell 15% in extended trading.
Slowing sales of electric vehicles have affected demand for the chips Wolfspeed makes using silicon carbide, a more energy-efficient material than standard silicon.
The company dropped plans last month to build a factory in Ensdorf, Germany, citing the slower adoption of EVs in Europe.
In October, rival ON Semiconductor ON.O also forecast fourth-quarter revenue and profit below market estimates.
Wolfspeed expects second-quarter revenue from continuing operations to be between $160 million and $200 million, which is below analysts' estimates of $214.6 million, according to LSEG-compiled data.
It expects a quarterly adjusted loss per share of 89 cents to $1.14, compared with estimates of a 90 cent loss.
Wolfspeed has seen a rise in costs, as it shuts down its 150mm chip fabrication plant based in Durham to focus on the more efficient 200mm chip plant located in Mohawk Valley.
The company expects to book $174 million in restructuring-related costs in the current quarter, after recording $87.1 million in such costs during its fiscal first quarter, which ended on Sept. 29, including for severance.
Its first-quarter revenue was also below expectations. The company said its Mohawk Valley facility in New York, which has yet to hit full utilization, contributed about $49 million in revenue, the same as the previous quarter.
The company said last month it would receive up to $750 million in funding under the CHIPS and Science Act to support the expansion of its North Carolina-based chip factory and the Mohawk Valley plant.
Reporting by Jaspreet Singh in Bengaluru; Editing by Mohammed Safi Shamsi
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