Core Viewpoint - Wolfspeed, a leading silicon carbide substrate company, has seen its stock price plummet over 78%, raising concerns about potential bankruptcy due to ongoing losses and increased competition in the silicon carbide market [1][5]. Company Performance - Wolfspeed's stock price peaked at $142.33 per share during 2021-2022 but has now dropped to $1.28 per share, indicating a significant decline [1]. - The company reported a net loss of $286 million for the third fiscal quarter of 2025, despite a revenue of $185 million, which represents an 8% year-over-year decline [8]. - The Mohawk Valley wafer plant, which was expected to be a key revenue driver, achieved only a 20% utilization rate by June 2024, with projections to reach 25% by the end of 2024 [5][8]. Market Position and Competition - Wolfspeed's market share in silicon carbide substrates has decreased from approximately 80% to 33.7% from 2018 to 2024, with Chinese companies like TanKeBlue and SICC gaining significant ground [2]. - The company faces intense price competition, with silicon carbide substrate prices reportedly halving over a three-year cycle, diminishing Wolfspeed's technological advantages [9][10]. - The global market for N-type silicon carbide substrates is projected to decline by 9% in 2024, largely due to weakened demand in the automotive and industrial sectors [11]. Industry Dynamics - The silicon carbide industry is experiencing a shift, with increased competition from both domestic and international players, particularly in China, which is seen as a key market for silicon carbide applications [11][12]. - Domestic Chinese companies are reportedly more efficient and responsive compared to their overseas counterparts, which may enhance their competitive position in the market [11]. - The transition from 6-inch to 8-inch wafers has been debated, with concerns about yield and cost implications, impacting Wolfspeed's strategic decisions [7]. Financial Support and Future Outlook - Wolfspeed is expected to receive $750 million in funding from the U.S. government and an additional $750 million from a consortium of investors, totaling $2.5 billion in anticipated capital [8]. - The company is undergoing management changes to improve its financial situation, including the appointment of a new CEO and board members with experience in the semiconductor industry [7][8].