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Engineer & Portfolio Manager, Author of Tech Investments Newsletter
Silicon carbide's years of oversupply are turning, as China's Yangjie Tech says its capacity is fully booked, per SCMP, a positive sign for Infineon, Wolfspeed and STMicroelectronics. As more makers fail to meet rising demand, orders should also flow to Wolfspeed, whose heavily underutilized New York SiC fab would gain tremendous operating leverage. x.comÂ
Wolfspeed commands the silicon carbide wafer chokepoint as Western and Chinese supply chains separate. It holds 33.7% of the SiC wafer market including Chinese rivals and 55-60% excluding them, much as AXT does in indium phosphide. China may restrict exports to keep wafers for its own AI buildout. Its bankruptcy came from pioneering costly 8-inch SiC production before it had today's data-center revenue and pipeline, and it has since restructured. x.com x.com x.comÂ
BorgWarner's 800V inverter platform could bring substantial silicon-carbide revenue to Wolfspeed. At an assumed $400 per EV for a traction inverter, within a $300-$600 range, 100,000-400,000 vehicles would imply $40 million-$160 million for Wolfspeed, versus $650 million in revenue now. A prior BorgWarner program covered 400,000 vehicles; volume could be higher as EVs made up 25% of new vehicle sales in 2025 and should keep gaining share. x.comÂ
Pure or heavy silicon carbide players such as STMicroelectronics, onsemi and Wolfspeed look higher-risk and currently unappealing in the AI data-center shift to 800V DC power and solid-state transformers. The better risk/reward in that transition sits with power-electronics names positioned for it, such as Enphase and SolarEdge, whose bidirectional power-conversion know-how suits transformers that step 13 kV utility power down to 800V DC and must handle sudden GPU load swings. x.comÂ
Wolfspeed's results bottom in Q2, and silicon carbide demand should genuinely pick up from Q3, lifting both utilization and gross margin. The Q2 strength was not a real shortage but inventory restocking. For short-term rebound trades memory names are more sensitive, while Intel's Q2 should be decent though CEO Lip-Bu Tan guides conservatively. x.com x.comÂ
Wolfspeed's case as America's silicon carbide bet is taking shape with a conditional $1.5B, 30-year Department of War loan commitment, $600M of which is aimed at refinancing its expensive debt. x.comÂ
Wolfspeed has yet to show AI data centers can fix its economics. It has gone four quarters without sizing AI data-center revenue, reporting only decelerating sequential growth of roughly 50%, 30% and 20%, and calls the opportunity 'moderate'. Gross margin is -16.2%, with 1.7x debt to equity after a Chapter 11 that closed in September. Yet Lite-On's 800 VDC power racks, due for mass production in November, run on Wolfspeed's 200mm SiC, so a rerate could land on it first. x.com x.comÂ
STMicroelectronics is a hidden common thread across semiconductors, and the market is waking up to it in 2026. It turns up in silicon carbide and GaN power devices, its STM32 is effectively the MCU standard, and it leads MEMS sensor share. Its chips sit in SpaceX Starlink satellites, AWS data center infrastructure and a humanoid robot shown at NVIDIA's headquarters. A "European semiconductor" label long kept interest lukewarm, but that perception is breaking down fast. x.comÂ
Wolfspeed is no longer that speculative and deserves a chance as a core position, with upside-skewed probabilities. Valuation isn't demanding at all after the stock fell from the $70s to the $50s, and it has a huge asset base as demand inflects. Catalysts include 800V data centers, TSMC's 300mm silicon carbide interposers and the grid. x.comÂ
Infineon, STMicroelectronics and NXP have little value upside left from humanoid robotics after rallying hard on the AI datacenter theme. Infineon's CEO said humanoids could eventually rival AI datacenters as a revenue opportunity, about 20% of sales, yet Infineon saw insider sales this week. Humanoids may create few real bottlenecks: about 60% of parts come from the existing auto supply chain, most value will likely accrue in China and OEMs will integrate vertically, leaving heavy competition. … Show more
Wolfspeed could be the best-performing stock by this time next year despite a weak quarter, because 800V DC power will need lots of new silicon-carbide hardware. Schulz Research notes substrate revenue fell 44.8% year over year to $43.3 million and GAAP gross margin was minus 25%. 800V DC was pushed out but will still come, requiring solid-state transformers and inverters that use SiC heavily. The market got carried away; the Rubin Ultra ramp is when it matters, and then it will matter big. … Show more
