(Reuters) – Wolfspeed on Wednesday forecast quarterly revenue below expectations and said it would book $174 million in restructuring charges for a planned facility closure, as the chipmaker faces sluggish demand from auto customers.
Shares of the company, which counts General Motors and Mercedes-Benz among its customers, fell 15% in extended trading.
Slowing sales of electric vehicles have affected demand for the chips Wolfspeed makes based on silicon carbide, a more energy-efficient material than standard silicon.
The company last month dropped plans to build a factory in Ensdorf, Germany, citing slower adoption of electric vehicles in Europe.
In October, rival ON Semiconductor also forecast fourth-quarter revenue and profit to be below market estimates.
Wolfspeed expects second-quarter revenue from continuing operations to be between $160 million and $200 million, below analyst estimates of $214.6 million, according to data compiled by LSEG.
It expects a quarterly adjusted loss per share of 89 cents to $1.14, compared with estimates of a loss of 90 cents.
Wolfspeed has seen costs rise as it closed its 150mm chip plant in Durham to focus on its more efficient 200mm chip plant in Mohawk Valley.
The company expects to record $174 million in restructuring-related charges in the current quarter, after recording $87.1 million in such charges during the first fiscal quarter ended September 29, including severance payments.
Turnover for the first quarter also fell below expectations. The company said its Mohawk Valley facility in New York, which is not yet fully utilized, contributed about $49 million in revenue, the same as in the previous quarter.
The company said last month it would receive up to $750 million in funding under the CHIPS and Science Act to support the expansion of its North Carolina-based chip plant and Mohawk Valley plant.
(Reporting by Jaspreet Singh in Bengaluru; Editing by Mohammed Safi Shamsi)
