Wolfspeed forecasts dour quarterly revenue on weak demand for its semiconductors

(Reuters) - Chipmaker Wolfspeed forecast third-quarter revenue below estimates on Wednesday, as slower sales growth for electric vehicles hurt demand for its semiconductors used in them, sending its shares down 2% in extended trading.

Wolfspeed is a key supplier of specialized chips and power devices for electric vehicles, a segment that faces demand concerns.

Lower subsidies, higher borrowing costs and consumer weakness have weighed on demand at EV companies, with worldwide sales growth this year expected to fall to 27.1% from 29% in 2023, according to Canalys.

Wolfspeed said it expected third-quarter revenue from continuing operations to be between $185 million and $215 million. Analysts on average were expecting $224 million, according to LSEG data.

In the quarter ended Dec. 31, net loss from continuing operations widened to $126.2 million from $72.1 million a year earlier, and included a $35.6 million under-utilization cost related to the Mohawk Valley Fab in New York.The facility, which began revenue generating production at the end of the company's fiscal 2023, contributed $12 million in revenue in the last quarter, tripling sequentially.

Excluding items, the company lost 55 cents per share in the second quarter, compared with estimates of 66 cents.

Durham, North Carolina-based Wolfspeed makes silicon carbide (SiC) chips and power solutions.

SiC semiconductors can operate at much higher voltages, temperatures and frequencies than traditional silicon-based semiconductors, making them suitable for industries like EVs, telecom and energy.

In the reporting quarter, net revenue rose nearly 20% to $208.4 million, compared with estimates of $206.4 million.

(Reporting by Yuvraj Malik in Bengaluru; Editing by Krishna Chandra Eluri)