(Reuters) – Wolfspeed Corp on Wednesday forecast lower-than-expected first-quarter revenue, anticipating manufacturing issues that could impact its production capacity amid slowing sales of electric vehicles.
However, shares of the chipmaker rose about 6% in extended trading, as CEO Greg Lowe said the company continues to see strong growth from its chipmaking facility in Mohawk Valley, New York.
In June, Wolf Speed said it had experienced equipment issues at its 150mm wafer manufacturing plant in Durham, which could impact first-quarter revenue by about $20 million.
Meanwhile, Wolfspeed’s chip manufacturing plant in Mohawk Valley is set to reach 25% of its operating capacity in the first quarter, ahead of schedule.
“Our 200mm hardware plant is currently producing strong results… This improved profitability gives us confidence in accelerating the shift of our hardware manufacturing to the Mohawk Valley,” Lowe said in a statement.
Michael Ashley Schulman, chief investment officer at Running Point Capital, said stocks have started to recover as the market recognizes the cost benefits of the new 200mm manufacturing unit in Mohawk Valley, compared to the old 150mm unit.
The company counts General Motors and Mercedes-Benz among its customers, and makes chips using silicon carbide, a more energy-efficient material than standard silicon, for tasks like transferring power from an electric car’s batteries to its motors.
Wolfspeed expects first-quarter revenue to come in between $185 million and $215 million, the midpoint below analysts’ average estimate of $211.7 million, according to LSEG data.
The company expects adjusted loss per share to be between $1.09 and $0.90, compared with estimates of a loss of 84 cents per share.
Revenue in the fourth quarter was $200.1 million, compared to the average estimate of $201.2 million.
Wolfspeed’s net loss per share was $1.39, compared to a loss of $0.73 per share a year earlier.
(Reporting by Jaspreet Singh in Bengaluru; Editing by Mohammad Safi Shamsi)
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