May 8 (Reuters) – Chipmaker WolfSpeed forecasts revenue in 2026 below Wall Street estimates and reported a 7% decline in third-quarter revenue on Thursday, with its stock falling 11% in expanded trading.
The company uses silicon carbide to make chips, more energy-efficient materials than traditional silicon content, and is affected by slower than expected EV, which is more complex to the higher prices of automatic parts driven by new tariffs.
These factors have caused customers to delay product launches, weakening demand for Wolfspeed products.
Broader macroeconomic challenges, including high interest rates and rising capital costs, have also delayed investment cycles in the industrial and energy sectors, which could further pressure order activities.
The company expects revenue to be $850 million in 2026, down from analysts’ estimate of $958.7 million.
According to data compiled by LSEG, the company’s revenue in the third quarter was $185.4 million, with an average estimated $185.9 million.
Wolfspeed listed GM and Mercedes-Benz as its customers and the company will receive $750 million in federal funding for its North Carolina silicon carbide fab. The company plans to use funds to accelerate U.S. chip manufacturing related to EVs and renewable energy.
But the future of legislation in the Biden era remains uncertain after the Trump administration calls on lawmakers to repeal federal funds under the chips Act. This caused Wolfspeed’s stock to lose half of its value when it fell to a 27-year low in March.
Wolfspeed reported a net loss of 72 cents per share in the third quarter, compared with an estimated loss of 82 cents per share.
(Reported by Priyanka.g in Bangalore; edited by Alan Barona)
