During today's session, shares of the American company Wolfspeed (WOLF.US) are up over 17%. The positive sentiment towards the company, which is one of the global leaders in the semiconductor market focused on silicon carbide and gallium nitride (GaN) technologies, stems from a signed agreement for the supply of semiconductor wafer-based components to Tokyo Renesas Electronics. The entire agreement is set to last for 10 years, and Renesas has already deposited $2 billion related to the contract.
Both companies stated that the demand for semiconductors is "dramatically growing" due to the development of electric vehicles and clean energy.
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Open account Try demo Download mobile app Download mobile app"The agreement for wafer supply from Wolfspeed will provide Renesas with a stable, long-term supply base of high-quality silicon carbide wafers. This will enable Renesas to scale our power semiconductor offering to better serve customers across a wide range of applications," said Hidetoshi Shibata, CEO of Renesas.
Compared to conventional silicon semiconductors, silicon carbide devices offer higher energy efficiency, greater power density, and lower system costs.
Renesas' $2 billion deposit will support ongoing projects for the construction of Wolfspeed's new facility, which will be the world's largest silicon carbide materials factory. The multibillion-dollar facility is expected to generate over a tenfold increase in production capacity.
From a fundamental point of view, the company has been performing moderately in terms of profitability in the past. The company is burdened with debt, and the WACC/ROIC ratio suggests that the company has had issues with optimal capital allocation. Source: XTB Research
Chart of Wolfspeed (WOLF.US) stock, D1 timeframe. Today's increase in the company's stock price lifted it towards a significant resistance level defined by the 200-day exponential moving average (golden curve). Source: xStation 5.
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