Wolfspeed, one of the leading providers of silicon carbide chips, posed a worsening operating and net loss for the latest quarter. The company expects rising costs due to factory start-up and operating costs with new facilities.
Wolfspeed released its financial results for the fiscal third quarter of 2023, which ended in June. The full-year revenue rose from US$746.2 million in fiscal 2022 to US$921.9 million in fiscal 2023, and year-to-date design-ins reached US$8.3 billion. Wolfspeed's fiscal fourth quarter revenue grew by 3.19% year-on-year to US$235.8 million. Wolfspeed turned a loss in the past quarter, reporting a net loss of US$113.3 million.
Wolfspeed CEO Gregg Lowe said in a statement that the company secured US$5 billion of funding to support its continued capacity expansion plans, initiated construction on a 200mm materials factory in North Carolina, and generated initial revenue from the Mohawk Valley 200mm device fab, adding that Wolfspeed will remain focused on scaling up materials and device capacity in the next fiscal year.
Wolfspeed expects sales for the fiscal first quarter of 2024 to be US$220-240 million and foresees a GAAP net loss between US$145 million and US$169 million.
Wolfspeed said in a press release that the company is incurring substantial factory start-up costs for factories under construction or production expansion that have not yet commenced generating revenue. Once a newly established facility begins production that generates revenue, the operational expenses previously categorized as start-up costs will predominantly be integrated into the production costs, which will then be accounted for within the cost of revenue.
Wolfspeed further said that the company incurred US$39.5 million and US$160.2 million of factory start-up costs for the fiscal fourth quarter and full fiscal year 2023, respectively, which accounted for a significant portion of the operating expenses. The company expects its operating expenses to include about US$8 million of factory start-up costs primarily in connection with our materials expansion efforts and our cost of revenue, net, to include about US$37 million of under-utilization costs primarily in connection with the new silicon carbide device fabrication facility in Marcy, New York.
Wolfspeed's financial results (US$m) | ||||||
Financials | Jun-22 | Sep-22 | Dec-22 | Mar-23 | Jun-23 | YoY growth (%) |
Sales | 228.5 | 241.3 | 216.1 | 228.7 | 235.8 | 3.19 |
Gross profit | 78.9 | 79.9 | 66.9 | 68.1 | 64.6 | -18.12 |
Operating income | -58.9 | -75.7 | -91.3 | -101.9 | -111.7 | -89.64 |
Net income | 32.4 | -26.2 | -90.9 | -99.5 | -113.3 | -449.69 |
Source: Wolfspeed, August 2023
