David Moadel
6 min read
Quick Read
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Wolfspeed dropped 25% in October, including a 16% single-day plunge, despite securing a conditional $1.5 billion federal financing commitment.
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Peers ON Semiconductor and STMicroelectronics fell 8% and 14% this month, but their diversified chip portfolios offer more protection against silicon carbide weakness.
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CFO Van Issum pegged gross margin breakeven at an $800 million annual run rate, while the company carries roughly 16% first-lien debt interest.
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October opened with federal support for Wolfspeed (NYSE:WOLF), but the silicon carbide maker is ending the month lower. Wolfspeed stock is down 25% in October to $21.02 in late trading, after closing at $28.13 on September 30. That slide includes a 16% drop from the prior close. The decline shows how volatile the stock has been since the company emerged from bankruptcy protection on September 29, 2025.
At its core, Wolfspeed makes silicon carbide substrates and wafers, plus power chips used in electric vehicles, industrial equipment, artificial intelligence (AI) data centers and renewable energy. Larger power chipmakers fell this month too, though by less. ON Semiconductor (NASDAQ:ON) stock is down 8% over the past month to $69.97. Over the same stretch, STMicroelectronics (NYSE:STM) stock is down 14% to $45.69.
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Bull Case: Washington and Infineon Line Up Behind Wolfspeed
For Wolfspeed, the bull case starts in Washington. On October 7, Wolfspeed said it had received a conditional commitment from the U.S. Department of War’s Office of Strategic Capital for up to $1.5 billion in long-term financing to support domestic silicon carbide production. That commitment is part of a wider federal push. The department’s fiscal 2027 budget request puts more than $100 billion toward defense supply chains, and the Office of Strategic Capital is among the programs it funds.
