Chipmaker Wolfspeed forecasts quarterly revenue below estimates as EV sales growth slows

FILE PHOTO: U.S. power chip maker Wolfspeed’s silicon carbide 200mm wafer is seen on display at Wolfspeed’s Mohawk Valley Fab in Marcy, New York, U.S., April 2022. Silicon carbide power chips have been gaining traction with electric car makers as they

(Reuters) - Chipmaker Wolfspeed forecast current-quarter revenue below estimates on Wednesday as automakers grapple with high inventory levels due to slower-than-expected EV sales growth.

Shares of the company, which counts General Motors and Mercedes-Benz among its customers, fell about 4% in extended trading.

Wolfspeed makes chips out of silicon carbide, a more energy-efficient material than standard silicon for tasks such as transmitting power from an electric car's batteries to its motors.

EV demand has been growing at a slower-than-expected pace, attributed to high interest rates that lead to chip inventory build-ups at the automakers' factories.

The company said it expects fourth-quarter revenue between $185 million and $215 million, compared with analysts' estimate of $225.8 million, according to LSEG data.

"While the industrial and energy end markets pose short-term headwinds to our results, we firmly believe in the strength of our long-term prospects as the electrification of all things continues across a broad set of applications," CEO Gregg Lowe said in a statement.

Tesla reported a drop in quarterly deliveries in the first quarter of 2024, as it expects "notably slower" growth this year since automakers have pivoted to produce and sell more gasoline-electric hybrid vehicles.

Wolfspeed reported March-quarter revenue of $200.7 million, compared with estimates of $201.1 million, while net loss widened to $1.18 per share from 80 cents per share a year earlier.

(Reporting by Akash Sriram in Bengaluru; Editing by Alan Barona)