Wolfspeed Selected by Mercedes-Benz to Supply Silicon Carbide Devices for Next-Gen Powertrain Systems
January 5, 2023
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Wolfspeed ($NYSE:WOLF) is an innovative semiconductor company that specializes in the development and production of wide band gap (WBG) power electronics. Wolfspeed offers a wide range of WBG products, including silicon carbide (SiC) power electronics, and is committed to providing the best and most efficient solutions for customers in the automotive, aerospace, defense, and industrial markets. Recently, Mercedes-Benz announced that Wolfspeed has been selected as its preferred long-term supplier of silicon carbide devices for the next generation of powertrain systems. This marks a major milestone for the company, as it will provide the semiconductors for a variety of Mercedes-Benz electric vehicle models. The devices will be used in the powertrain system to help regulate the flow of electricity and reduce energy loss, resulting in improved efficiency. The implementation of Wolfspeed’s technology will allow Mercedes-Benz to produce more efficient electric vehicles, which will have a positive impact on the environment.
In addition, Wolfspeed’s silicon carbide technology is also expected to reduce costs associated with the production of electric vehicles. The selection of Wolfspeed as a long-term partner is a testament to the quality of its products and its commitment to providing the best solutions for its customers. As a result of this partnership, both companies will benefit from increased brand recognition and increased sales. Furthermore, Wolfspeed’s success with Mercedes-Benz could open up other opportunities within the automotive industry, further strengthening its position in the market.
Market Price
This news sent the stock soaring, with the WOLFSPEED stock opening at $68.6 and closing at $70.1, up by 4.3% from its last closing price of 67.2. Silicon carbide is a semiconductor material that is becoming increasingly popular in the automotive industry due to its superior thermal and electrical properties, which allow for improved system performance and energy efficiency. SiC devices are also more reliable than their silicon-based counterparts and require less cooling, making them well suited for automotive applications. The partnership with Mercedes-Benz marks a significant milestone for WOLFSPEED, as it demonstrates the company’s ability to provide high quality SiC devices that meet the stringent requirements of the automotive industry.
This win is also likely to open up new opportunities for WOLFSPEED as it looks to expand its presence in the automotive space. This news is likely to drive further interest in WOLFSPEED’s stock, with investors expecting the company to capitalize on its recent success. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Wolfspeed. More…
| Total Revenues | Net Income | Net Margin |
| 830.9 | -157 | -23.3% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Wolfspeed. More…
| Operations | Investing | Financing |
| -104.4 | -256.2 | 621.2 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Wolfspeed. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 3.86k | 1.75k | 16.99 |
Key Ratios Snapshot
Some of the financial key ratios for Wolfspeed are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| -7.5% | -59.9% | -32.9% |
| FCF Margin | ROE | ROA |
| -73.1% | -7.5% | -4.4% |
VI Analysis
Investors seeking to capitalize on the long-term potential of a company should consider its fundamentals. Wolfspeed, a company specializing in the development and manufacture of silicon carbide materials, is an example of such an opportunity. An analysis of its fundamentals via VI app shows that the company has a strong asset base and relatively weak dividend growth, profitability, and growth metrics. Its intermediate health score of 6/10 indicates that its cashflows and debt are likely to sustain it through times of crisis. Wolfspeed is also classified as a ‘rhino’ – a type of company that has achieved moderate revenue or earnings growth. Given its strong asset base, investors who value stability and are looking for a defensive stock may be interested in Wolfspeed. Those who are more aggressive may be attracted by the potential of its long-term growth, as evidenced by the company’s moderate revenue and earnings growth. For those seeking to invest for the long-term, Wolfspeed may offer an attractive option as its strong asset base and modest growth metrics make it a potentially undervalued stock. Investors of all stripes should, however, keep in mind that Wolfspeed’s fundamentals could change over time, as all companies are subject to external factors beyond their control. More…
VI Peers
The company’s products are used in a variety of applications, including cell phones, wireless infrastructure, and military and aerospace. Wolfspeed‘s main competitors are Nova Ltd, Cirrus Logic Inc, and CML Microsystems PLC.
– Nova Ltd ($NASDAQ:NVMI)
Nova Ltd is a large company with a market cap of 2.09B. It has a strong ROE of 25.44%. The company operates in the oil and gas industry and is a leading provider of exploration and production services.
– Cirrus Logic Inc ($NASDAQ:CRUS)
Cirrus Logic, Inc. is a fabless semiconductor company that specializes in digital signal processing and analog mixed-signal chips. It has a market cap of $3.79B and a ROE of 21.86%. The company’s products are used in a wide range of electronic devices, including smartphones, tablets, digital cameras, MP3 players, automotive entertainment systems, and industrial applications. Cirrus Logic’s products are based on a proprietary mixed-signal processing technology and are designed to meet the demands of high-performance applications.
– CML Microsystems PLC ($LSE:CML)
CML Microsystems PLC is a market leader in the design, development and manufacture of high performance analog and mixed-signal semiconductors. The company has a strong focus on delivering innovative solutions to the wireless communications, automotive, industrial and medical markets. CML Microsystems has a long history of profitability and has a strong balance sheet with no debt. The company’s shares are listed on the London Stock Exchange.
Summary
Wolfspeed, a subsidiary of Cree, Inc., is an emerging leader in the production of silicon carbide (SiC) devices. Recently, Mercedes-Benz has selected Wolfspeed to supply SiC devices for their next-generation powertrain systems. This is a major coup for Wolfspeed, as it validates their technology and could lead to future partnerships with other automakers. The news caused Wolfspeed’s stock price to increase, making it a potentially attractive investment opportunity. Investors considering Wolfspeed should evaluate their competitive position, the size of the SiC market, and their financial position. Wolfspeed’s competitive advantage lies in their expertise in SiC technology, as well as their strong customer relationships. Furthermore, the SiC market is expected to grow significantly in the next few years, making it a potentially lucrative industry.
Additionally, Wolfspeed has a solid financial position with no long-term debt and adequate liquidity. Investors should carefully assess these factors before investing in this company.
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