Wolfspeed to close its Durham plant
In its fourth quarter and full fiscal year 2024 report, semiconductor company Wolfspeed says it plans to accelerate the shift of device fabrication to its 200mm Mohawk Valley Fab, while assessing the timing of the closure of its 150mm device fab in Durham.
The company recorded consolidated revenue of approximately EUR 201 million during the fourth quarter of 2024, compared to USC 203 million during 4Q23. The Mohawk Valley Fab contributed about USD 41 million in revenue. Wolfspeed also reported a loss of USD 174.9 million during the quarter, compared to a loss of USD 113.3 million during the same quarter last year.
Consolidated revenue for the full fiscal year of 2024 amounted to USD 807 million, up from USD 759 million in 2023. GAAP gross margin of 10%, compared to 32% during 2023. For the full year, the company reported a loss of USD 864.2 million, compared to a full-year loss of USD 329.9 million in 2023.
“We have two priorities we are focused on: optimizing our capital structure for both the near term and long term and driving performance in our state-of-the-art, 200-millimeter fab, and this quarter was a step forward on both of these priorities,” said Wolfspeed CEO, Gregg Lowe, in the fiscal report.
The CEO continues to say that the company achieved 20% utilisation at Mohawk Valley in June and continued to see strong revenue growth from that fab. Wolfspeed's 200mm device fab is currently producing solid results – which are at significantly lower costs than its Durham 150mm fab.
“This improved profitability gives us the confidence to accelerate the shift of our device fabrication to Mohawk Valley, while we assess the timing of the closure of our 150mm device fab in Durham. At the JP, we have also made great progress, installing and activating initial furnaces in the fourth quarter. We have already processed the first silicon carbide boules from the JP and the quality is in line with the high-quality materials coming out of Building 10.” Lowe said.
At the same time, the company is taking proactive steps to slow down the pace of its CapEx by approximately USD 200 million in fiscal 2025 and is looking to identify areas across its entire footprint to reduce operating costs.
Looking forward the company is targeting revenue from continuing operations in the range of USD 185 million to USD 215 million during the first quarter of fiscal 2025. GAAP net loss is targeted at USD 226 million to USD 194 million.
As part of expanding its production footprint to support expected growth, Wolfspeed is incurring significant factory start-up costs relating to facilities that are either being constructed or expanded and have yet to start generating revenue. Wolfspeed incurred USD 20.5 million of factory start-up costs and USD 24.0 million of underutilisation costs in the fourth quarter of fiscal 2024. No underutilisation costs were incurred in the fourth quarter of fiscal 2023.
For the first quarter of fiscal 2025, operating expenses are expected to include approximately USD 25 million of factory start-up costs primarily in connection with materials expansion efforts.
