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Technology Stocks : Wolf speed
WOLF 31.97+3.9%Oct 29 3:59 PM EDT
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To: Lou Weed who wrote (10626)8/22/2023 11:43:37 AM
From: slacker7112 Recommendations

Recommended By
Lou Weed
The Ox

   of 10711
 
It is only $125m so capital requirements definitely aren't driving the sale.

Macom said the talks started last winter. That was when they said that they weren't going to be able to transition RF to 150mm substrates. My guess is that they decided that it wasn't a core business so didn't want to invest the necessary capital to allow the business to get decent margins over time. The mobile networks business has also seen a pullback in spending and management probably wanted to focus on the parts of the business that are seeing growth.

All of that being said, GaN on SiC should have been an area where the company could show differentiation and it would have provided some diversification from the power device business. Selling the business off for 1/3 what you paid five years ago isn't great.
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