Wolfspeed is a semiconductor company known for its focus on silicon carbide technologies, with a core mission of providing solutions for efficient energy consumption and a sustainable future. The company’s product families span silicon carbide material and power devices designed for a range of applications, including electric vehicles, fast charging, renewable energy, and storage.

Jana, an activist investor founded by Barry Rosenstein in 2001, is known for its strategic approach to creating long-term value through well-researched activist positions. The firm has moved from a “three Vs” strategy to a “three Ss” strategy, focusing on stock price, strategic activism, and aligning with industry experts. Jana recently urged Wolfspeed to explore strategic alternatives, including a potential sale of the company.

Wolfspeed has established itself as a market leader in silicon carbide production, with a significant competitive advantage due to the complexity and cost of manufacturing SiC substrates. The company’s first-mover advantage has allowed it to dominate the global SiC market, producing the majority of SiC material in existence. The demand for Wolfspeed’s products in various applications, such as EVs, motor drives, power supplies, and solar energy, has led to significant growth opportunities.

Despite strong market demand and a robust position in the SiC market, Wolfspeed has faced operational challenges, particularly related to the expansion of its manufacturing facilities. Delays in the rollout of new facilities and concerns about low utilization rates have raised investor uncertainty. The company’s announcement of plans to build a new SiC device manufacturing facility in Germany has further added to market concerns about its ability to execute effectively.

Jana has outlined key recommendations for Wolfspeed to address its operational challenges and regain market confidence. These recommendations include prioritizing execution at existing facilities, earning an acceptable return on capital, setting realistic targets, and outlining clear capital expenditure plans to prevent further dilution. Jana also suggests that Wolfspeed’s board consider strategic alternatives, including a potential sale of the company.

Wolfspeed’s position as a leading semiconductor company in the SiC market presents significant growth opportunities, but operational challenges have impacted its performance. Jana’s activist commentary and recommendations highlight the need for Wolfspeed to address its execution issues and set clear strategic goals to enhance shareholder value. By implementing these recommendations, Wolfspeed may be able to overcome its current challenges and unlock its full potential in the semiconductor industry.


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