Wolfspeed
Vertically integrated IDM: grows its own SiC boules, sells bare/epi wafers (Materials segment) AND fabricates discrete SiC MOSFETs, diodes and power modules (Power segment) to automotive, industrial and energy customers; blends long-term wafer-supply agreements with design-in device revenue.
Earnings, margins, COGS & capex
A structurally attractive SiC franchise wrapped around a repaired balance sheet and a demand trough. FY2026 revenue is shrinking (Materials -36% YoY, Power -15% QoQ) as EV/industrial SiC orders soften and legacy 150mm capacity rolls off faster than 200mm design-ins ramp. Gross margin is negative on low fab utilization, but the trend is improving quarter-over-quarter, and the September 2025 Chapter 11 emergence cut ~70% of debt (~$4.6B) and roughly 60-65% of annual cash interest (from a projected ~$400M to ~$145M), giving the company runway to self-fund the 200mm transition into a hoped-for SiC recovery.
Income statement — where each revenue dollar goes
% of revenueOf every $1 of revenue, ~100¢ is cost of goods and ~0¢ operating expense, leaving ~0¢ of operating profit.
Revenue trend
Margins
improving (from -34% in Q2 FY26; GAAP was +2% a year ago)
negative; TTM GAAP not cleanly comparable due to fresh-start accounting
improving as opex is held flat and revenue mix shifts to Power
improving (cash burn narrowing: op cash flow -$83.8M vs -$142.1M YoY)
COGS structure
COGS is dominated by fixed fab depreciation and under-absorbed overhead - the Mohawk Valley (New York) 200mm device fab and the North Carolina (Siler City / JP) 200mm materials facility are ramping well below capacity, so unit costs are high until volume fills them; SiC crystal growth is slow and yield-sensitive, keeping materials cost structurally elevated versus silicon.
Capex
Peak build phase is over: gross capex ~$38M in Q3 FY26, offset by ~$33M of state/CHIPS-linked incentives for ~$5M net. Management has sharply curtailed expansion capex to conserve cash and self-fund the plan; prior years ran capex well above $1B annually building the 200mm footprint.
Latest earnings
Revenue $150.2M near guidance; GAAP net loss $119.9M (EPS -$3.26; ~$128M loss attributable to common), Adjusted EBITDA -$62M. Non-GAAP gross margin improved sharply to -20.6% from -34%, and total debt was cut ~25% sequentially. Market read it as 'cash burn improving despite falling revenue.'
Q4 FY26 revenue $140M-$160M; gross margin expected to stay negative; opex ~flat with Q3.
- Q3 FY26 revenue
- $150.2M (-19% YoY)
- Materials revenue
- $50.1M (-36% YoY)
- Power revenue
- $100.1M (-15.4% QoQ)
- Non-GAAP gross margin
- -20.6% (from -34%)
- GAAP net loss
- $119.9M (EPS -$3.26)
- Adjusted EBITDA
- -$62M
- Free cash flow
- -$90M
- Cash & ST investments
- $1.165B
- Total debt (post-refinancing)
- ~$1.7B
Growth drivers
- 200mm (8-inch) SiC wafer transition — larger wafers cut cost-per-die materially versus 150mm and are the path to positive gross margin
- AI-data-center power (10kV SiC MOSFET and next-gen TOLT package) as an adjacency beyond EV/industrial - AI-datacenter revenue grew ~30% sequentially in Q3 FY26
- EV powertrain SiC content growth (800V architectures) once the auto inventory correction clears
- Long-term wafer-supply agreements (notably Renesas) and a device design-in pipeline converting to revenue
- Renesas equity/wafer-supply relationship and Mohawk Valley / North Carolina fab utilization ramp
Reported financials — SEC EDGAR
Audited GAAP figures pulled from SEC filings · latest filing 2026-08-20. The audited primary-source spine — not financial advice.
Revenue — annual (GAAP)
Margins & balance sheet — FY’26
Bull & bear
A de-levered, vertically integrated SiC IDM with the West's largest 200mm footprint already built - an option on the SiC recovery where the balance-sheet risk has largely been removed and gross margin is inflecting off the bottom.
- Chapter 11 did the hard part: ~$4.6B (~70%) of debt eliminated, cash interest cut ~60-65% (to ~$145M), maturities pushed to 2030/2031 - the bankruptcy risk that capped the equity is gone, and net debt is only ~$555M
- Gross margin trend is inflecting: non-GAAP -20.6% vs -34% a quarter earlier as 200mm utilization creeps up - the path to breakeven is visible
- The capex is spent - the 200mm fabs exist; incremental volume now drops toward the margin line instead of funding construction
- ~$1.165B liquidity plus a self-funding plan buys runway to the SiC upcycle; Renesas wafer-supply/equity ties (Renesas holds a large post-emergence stake) anchor demand
- Structural SiC TAM (EV 800V, AI-datacenter power, grid) still compounds; AI-datacenter revenue already grew ~30% sequentially in Q3, a non-auto demand leg
- At ~$2.1B market cap the equity is a cheap call option on utilization + SiC recovery if the plan lands
A cash-burning, negative-gross-margin business in a demand trough, facing Chinese substrate deflation and scaled Western rivals - restructuring fixed the debt but not the P&L, and the new equity may still be overvalued.
- Gross margin is still negative and revenue is shrinking ~19% YoY - the core problem (under-utilized fabs) is unsolved, only less debt-encumbered
- ~$90M/quarter FCF burn against ~$1.165B cash is a finite runway; a slow recovery forces another raise/dilution (already tapped ~$475.9M in March 2026 via converts + equity)
- Chinese SiC substrate suppliers are collapsing materials pricing - the vertical-integration moat erodes fastest exactly where Wolfspeed was strongest (Materials -36% YoY)
- STMicro, Infineon and onsemi have deeper pockets, captive auto sockets and their own 200mm roadmaps - Wolfspeed can be out-invested
- Management has repeatedly missed ramp/utilization timelines; execution credibility is thin and governance goodwill was burned when legacy holders were left with only ~5%
- EV demand timing is exogenous; if the recovery slips past the cash runway, equity holders are impaired again
What it is worth
EV/sales on a trough revenue base plus a reverse-DCF sanity check on the utilization/margin inflection, cross-checked against SiC peers (ON, STM, IFNNY, COHR). At ~$2.1B market cap + ~$0.555B net debt, EV ~= $2.65B on ~$600M annualized (Q4-run-rate) revenue -> ~4.4x EV/sales on deeply negative margins - the equity is priced as a call option on the 200mm margin inflection, not on current fundamentals.
EV/industrial softness persists, Chinese substrate deflation keeps materials margin negative, utilization stalls, and the ~$90M/qtr burn forces another dilutive raise - the new equity is impaired again and drifts well below the ~$2.1B mark. Not financial advice.
Demand troughs through FY26 and recovers gradually; margin claws toward breakeven over FY27; the company self-funds without a major dilutive raise. Equity roughly holds its post-emergence ~$2-2.6B EV range as an option that is slowly being exercised.
SiC demand recovers into FY27, 200mm fabs fill, gross margin turns solidly positive, and revenue re-accelerates past $1B - the integrated Western SiC IDM re-rates toward peer EV/sales multiples on a growing, profitable base; multiples of today's ~$2.1B equity.
Legacy per-share history is meaningless post-cancellation (fresh-start accounting, new equity); value the reorganized enterprise, not the old chart. The core question is whether 200mm utilization flips gross margin positive before the ~$1.165B cash runway (net of ~$90M/qtr burn) forces further dilution. The ~$475.9M March 2026 raise (converts + equity) shows the funding tap is already being used.
SWOT
Strengths
- Most vertically integrated SiC player in the West — owns crystal growth through finished power modules, a hard-to-replicate stack
- First-mover, largest installed 200mm SiC capacity (Mohawk Valley device fab + North Carolina materials fab) - a multi-billion-dollar head start now built
- Deep SiC IP and process know-how (decades as Cree's materials arm); shipped first commercial 10kV SiC MOSFET
- Post-restructuring balance sheet — ~70% less debt (~$4.6B eliminated), ~60-65% lower cash interest, no maturities until 2030, ~$1.165B liquidity and only ~$555M net debt
Weaknesses
- Negative gross margin - fabs are badly under-utilized; the P&L only works at much higher volume
- Still burning cash (~$90M FCF outflow/quarter) with revenue shrinking, not growing
- Reputational and governance overhang — legacy shareholders were nearly wiped out in Chapter 11 (retaining only ~5% of the new equity) while the ticker was kept, alienating the retail base
- Concentrated end-market exposure to EV/industrial demand cycles it cannot control; execution history of missed ramp timelines
Opportunities
- 200mm cost curve: filling the 200mm fabs could flip gross margin positive and re-rate the equity
- AI-data-center and grid/energy power demand as a second leg beyond automotive
- SiC content growth per EV as 800V platforms proliferate globally
- Western/'friend-shored' SiC supply preference (CHIPS-era policy, defense/grid) favoring a US-domiciled IDM
Threats
- Chinese SiC entrants (e.g., SICC, TanKeBlue) driving aggressive substrate price deflation, compressing the materials moat
- Scaled, better-capitalized rivals — STMicroelectronics, Infineon, onsemi - with their own 200mm SiC roadmaps and captive auto demand
- Prolonged EV demand softness / de-stocking pushing the recovery beyond the company's cash runway
- Substrate price erosion outrunning the 200mm cost-down, keeping gross margin negative longer than planned
Moats, dependencies & bottlenecks
Moats
Genuine and hard to replicate in the West, but Chinese substrate deflation is attacking the materials end of it.
Moderate-to-strong A multi-billion-dollar built head start - but it's only a moat if utilization/yield materialize; idle, it's a fixed-cost anchor.
Real technical depth (first commercial 10kV MOSFET, early 200mm SiC leadership), but rivals and Chinese entrants are closing the process gap.
Renesas and design-in relationships create stickiness once qualified into automotive-grade sockets.
Dependencies
Operational / cost structure Gross margin is entirely gated on filling these fabs; the whole thesis rests here.
End-market / cyclical Exogenous; a delayed recovery outlasts the cash runway.
Customer / strategic Renesas took a large equity stake in the restructuring (CFIUS-cleared Jan 2026, ~16.9M shares) and holds a long-term wafer-supply deal - a demand anchor but also a concentration.
~$555M net debt) and creditor lenders (Apollo) Self-funding plan works only if burn narrows as guided; further raises dilute the new equity.
State incentives materially offset capex (~$33M in Q3); policy shifts change the funding math.
Advantages
- Only Western fully-integrated SiC IDM at scale - from crystal to module
- Largest built 200mm SiC footprint outside Asia - capex already sunk
- De-levered balance sheet (post-Chapter 11) with ~$555M net debt and maturities pushed to 2030/2031
- Technology leadership signals (first commercial 10kV SiC MOSFET, early 200mm SiC leadership, TOLT package for AI power)
Weaknesses
- Negative gross and operating margins with contracting revenue
- Ongoing cash burn against a finite (if improved) liquidity position
- Materials segment (its historic strength) shrinking fastest under price competition
- Damaged shareholder trust and thin execution credibility after legacy holders retained only ~5%
Bottlenecks
- Fab utilization - the single gate on gross margin turning positive
- 200mm wafer yield and cost-down pace versus Chinese 150/200mm substrate pricing
- Cash runway versus the timing of the SiC/EV demand recovery
- Converting the device design-in pipeline into shipped Power-segment revenue fast enough
Top signals & trends
Top signals
The most important single number; sustained improvement validates the 200mm thesis.
Bullish (directionally) · Runway math improves as burn shrinks; a reversal would force dilution.
Substrate demand/pricing pressure hitting the historic moat.
No inflection to growth yet; recovery remains a FY27 story at best.
Evidence of a second demand leg beyond EV.
Trends
Positive (structural, delayed) · Long-run content growth intact; near-term muted by EV demand air-pocket.
Positive if executed · Cost-per-die step-down; Wolfspeed is early but rivals are following fast.
SICC/TanKeBlue et al. compressing materials margins globally.
Positive (emerging) · High-voltage SiC for power delivery is a new, non-auto demand pool; Wolfspeed's AI-datacenter revenue grew ~30% sequentially in Q3 FY26.
Favors a US-domiciled integrated SiC supplier for auto/grid/defense.
Ecosystem & competitor graph
Suppliers feed the company; customers pull from it. Line thickness shows the strength of each tie (supply-chain dependency, customer earnings contribution). Hover to isolate a tie.
SiC epitaxy (epi) deposition equipment.
Wafer-fab process equipment for the 200mm SiC device lines.
Also a merchant SiC substrate/materials source industry-wide (and a competitor).
Advanced materials, filtration and consumables for SiC wafer processing.
Long-term SiC wafer-supply agreement and large post-restructuring equity holder (CFIUS-cleared Jan 2026) - anchor customer/partner.
EV OEM designing SiC into 800V powertrains (representative auto demand).
Tier-1 auto supplier integrating SiC power modules into EV inverters (private).
Distribution channel for Wolfspeed's Power discrete/module products.
SiC device/module leader with captive auto demand (historically Tesla) and its own 200mm SiC + in-house substrate roadmap.
World's largest power-semi maker; aggressive SiC + GaN roadmap and 200mm SiC; deep auto/industrial sockets and balance sheet.
Vertically integrating SiC (substrate to module) for EV; the closest US-listed strategic analog and direct device rival.
SiC substrate/materials supplier (legacy II-VI) - competes directly with Wolfspeed's Materials segment on wafers.
Japanese SiC power-device maker with integrated substrate (SiCrystal); strong in auto/industrial SiC.
GaN/SiC power specialist targeting data-center and EV power - smaller, fabless-leaning, more adjacency than head-to-head.
Rapidly scaling low-cost SiC substrate supply, driving global price deflation - competitive-threat context only, not an investment call.