Wolfspeed Inc. has announced that its board has removed CEO Gregg Lowe without cause, amid mounting challenges from a slowdown in electric vehicle (EV) demand and broader operational issues. The Durham, North Carolina-based semiconductor company saw its shares rise about 6% following the announcement.
The decision to oust Lowe, who had led the company since 2017, comes as Wolfspeed grapples with significant headwinds. The chipmaker recently disclosed plans to shut down a manufacturing facility due to persistent production issues, a move accompanied by $174 million in restructuring charges. In its latest earnings call, the company revealed it would lay off 20% of its workforce, reflecting efforts to manage costs in a challenging market environment.
Wolfspeed specialises in silicon carbide (SiC) chips, a key component in electric vehicles and renewable energy applications due to their superior energy efficiency compared to traditional silicon-based chips. However, demand from major customers, including General Motors and Mercedes-Benz, has slowed as the global EV market faces declining growth rates. Additionally, Wolfspeed canceled plans to build a factory in Ensdorf, Germany, citing slower-than-expected EV adoption in Europe.
“Between weak demand, ongoing restructuring, and reduced capital expenditure for fiscal 2025, the new management’s options for reviving the company’s fortunes are limited,” analysts at Charter Equity Research stated, suggesting that a full-on sale of the company might be the best path forward.
Wolfspeed’s stock has plummeted about 85% this year, significantly underperforming the broader market, including the S&P 500 and the Philadelphia Semiconductor Index.
In the interim, Wolfspeed has appointed Chairman Thomas Werner as executive chairman while a search for a permanent CEO is underway. Lowe will receive a severance package as part of his departure, the company confirmed in a regulatory filing.
As Wolfspeed navigates these turbulent times, the company’s ability to adapt to market conditions and resolve operational inefficiencies will be critical to restoring investor confidence and sustaining its position in the competitive semiconductor landscape.