Wolfspeed Stock Surges on 10-Year Deal to Supply Chip Wafers to Renesas
Shares of Wolfspeed, the chip company owned by Cree Inc., experienced a significant surge after announcing a 10-year agreement to supply Tokyo-based semiconductor manufacturer Renesas Electronics with silicon carbide wafers. The deal, which includes both bare and epitaxial wafers, involved a $2 billion deposit from Renesas to secure the long-term supply commitment.
Silicon carbide wafers serve as the foundation for building electronic components like chips. The wafer supply agreement with Wolfspeed will provide Renesas with a stable and reliable source of high-quality wafers, enabling them to expand their power semiconductor offerings to better cater to their customers’ diverse range of applications.
Hidetoshi Shibata, the Chief Executive of Renesas, expressed his confidence in the partnership, stating, The wafer supply agreement with Wolfspeed will provide Renesas with a stable, long-term supply base of high-quality silicon carbide wafers. This empowers Renesas to scale our power semiconductor offerings to better serve customers’ vast array of applications.
The companies highlighted the rapidly increasing demand for semiconductors, driven by the growing popularity of electric vehicles and clean energy. As these industries continue to expand, the need for reliable and high-quality components is critical.
As news of the deal broke, Wolfspeed’s stock surged by 15% in premarket trading, reaching $65.03. Prior to this announcement, the stock had experienced an 18% decline this year. Similarly, American depositary receipts of Renesas saw a 2.7% increase in early trading, reaching $9.66. Year-to-date, Renesas shares have soared by an impressive 115% in 2023.
This partnership between Wolfspeed and Renesas represents a significant step forward for both companies. Not only does it solidify Renesas’ supply base for important silicon carbide wafers, but it also allows Wolfspeed to capitalize on the increasing demand for semiconductors. The focus on electric vehicles and clean energy technologies indicates a shift towards a greener and more sustainable future, and both Wolfspeed and Renesas are well-positioned to benefit from this trend.
As the global semiconductor market continues to evolve, partnerships and collaborations like this one will play a crucial role in ensuring a stable supply of essential components. The 10-year agreement between Wolfspeed and Renesas is a testament to the mutual trust and confidence both companies have in each other’s capabilities.
In conclusion, the news of Wolfspeed’s 10-year supply agreement with Renesas has sparked significant interest and optimism among investors. As the demand for semiconductors continues to rise, companies that can provide reliable and high-quality components will undoubtedly thrive in this rapidly evolving market.
