Wolfspeed’s bold SiC bets meet tough timing and growing competition

There’s a piece of news shocking the SiC community today, saying that Wolfspeed may be preparing to file for bankruptcy in the coming weeks. The truth is that Wolfspeed is restructuring the company by reinforcing operational efficiency and its financial situation. The company has been considered as the leader in terms of innovations in the SiC field, e.g., launching the first SiC substrates on 1-inch, 2-inch, 4-inch, and 6-inch since the 90s. With ambitions to enter SiC device manufacturing, the company opened the first 8-inch wafer fab, the well-known Mohawk Valley Fab (MHV), in 2022. As of 2025, Wolfspeed is the only company manufacturing SiC devices on an 8-inch platform in high volume.

Yole Group has been closely tracking the evolution of compound semiconductor technologies, with a particular focus on silicon carbide (SiC) for power electronics. Through a significant portfolio of market reports and teardown analyses, Yole Group’s analysts continuously assess these technologies and pinpoint emerging opportunities.

In this latest insight, Poshun Chiu, Principal Technology & Market Analyst for Compound Semiconductors at Yole Group, examines Wolfspeed, a major player in the SiC landscape. What is Wolfspeed’s current position, and what developments might we expect in the coming weeks? How will these changes ripple through the SiC market, especially in light of the recent downturn in EV demand?

So, grab a coffee and settle in. Yole Group invites you to dive deep into the dynamics, disruptions, and future outlook of the SiC industry.

According to Yole Group’s estimation, power SiC devices accounted for about 20% of Wolfspeed’s business in 2020, about $100 million in revenue, along with SiC substrates, epiwafers, and RF devices. In the past, Wolfspeed was not considered a power electronics devices company. However, in 2024, its power SiC devices activity represented more than 50% of the revenue, a nearly 4-fold increase in the past 5 years to nearly $400 million, leading to a ranking of No. 4 globally.

So, why is the exciting story of business transition a tough position today?

The multi-billion-dollar investment was planned to transform the business. The company raised funds by signing billion-dollar agreements with BorgWarner, ZF, and Renesas, and also relied on external investment, tax refunds, and the CHIPS Act. However, the market is impacted by the EV slowdown in 2024, shortening the time to grow the device market segment and turn it into operating cash flow.

Wolfspeed couldn’t grow its SiC device revenue in 2024, delivering the same level of revenue as in 2023.

Indeed, even though the main part of its SiC device revenue has been generated by the 8-inch platform at MHV since H2-2024, the complexity of combining various innovations into actual production is taking longer than was expected in 2022 when MHV was opened.

Meanwhile, Chinese SiC substrate players have arrived rapidly with large capacity. A high volume of good, cost-effective SiC substrates has entered the market, and major device manufacturers are happy to see multi-sourcing of this strategic material. It triggered the dramatic price decrease of SiC wafer, leading to a 30% drop in 2024. As of 2025, nearly 40% of the SiC substrate market is controlled by Chinese players, such as SICC and TanKeBlue; their market share was 10% in 2021. The SiC substrate business used to be a good cash generator for Wolfspeed, and they remained the leader for decades. In view of the transition to the 8-inch platform, Wolfspeed is not the only player to benefit. Today, multiple substrate suppliers are delivering samples to the market at a more accessible price.

The “high-quality SiC material moat” Wolfspeed hoped would protect itself during the transition period into the device business is failing.

Wolfspeed has divested its LED and RF device business in recent years to focus on power SiC. Therefore, to split the business further seems to be one of the options. Wolfspeed is stuck; high CapEx is needed for future development. However, the barrier to converting a material company into a device business seems high. Coherent is another example, though they adopted a different strategy by partnering with dedicated SiC device players.

Wolfspeed remains the market leader in SiC materials, ranked No. 1 for both n-type and semi-insulating SiC substrates for power and RF applications. In 2017, Infineon Technologies couldn’t close the acquisition of Wolfspeed due to the US government’s national security concerns. Wolfspeed then sold its RF device business to Macom, as the semi-insulating SiC substrate remains strategic for the defense supply chain in the US.

The asset remains strategically valuable, in terms of national security and supply chain independence. In terms of SiC power devices, the new and fully automated 8-inch high-volume fab is attractive and is the only one owned by a US company.

Many options are on the table today. At Yole Group, we remain confident in the future of SiC technology and will see various players continuing to work on it.

Yole Group continues its daily investigations. Stay tuned with UpToDate analyses, including:

Poshun Chiu is Principal Analyst, Compound Semiconductors at Yole Group.

Poshun is engaged in developing technology and market products and is involved in custom projects.

Before joining Yole Group, Poshun had 9 years’ experience in R&D and product management at Epistar (TW & CHN). He is the author or co-author of more than 10 patents in solid-state lighting. Poshun was also engaged in developing and evaluating novel applications of process technology and components based on relevant semiconductor material systems.

Poshun received an MSc in microelectronics from National Cheng Kung University (TW) and an MBA from IESEG School of Management (FR).

This article has been written in collaboration with the compound semiconductor team.

Source: www.yolegroup.com