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Technology Stocks : Wolf speed
WOLF 18.62-7.9%3:59 PM EST
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Lou Weed
To: Lou Weed who wrote (10352)4/29/2021 12:36:57 PM
From: slacker7111 Recommendation  Read Replies (1) of 10712
 
The primary explanation appears to be the various issues around ramping capacity at an outdated Durham fab. The problem with this is that this likely should have been forseen even back during the analyst day in '19. They haven't done a good job of communicating margins during this transition so the market is now wondering about margins at the Mohawk fab will ultimately look like.

I think they should have been much more granular in the explanations.

Are yields that much lower for the new device capacity? Are costs higher because they are making small runs of devices? Are ASP's dropping faster than they expected? Are device margins substantially lower than material margins and so increasing device revs are depressing GM's?

There only real comment on yields was that 200mm on their pilot fab is at the high-end of expectations. I think the market might have focused on this if the explanations around current gm's had been better.
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