Are electric vehicle manufacturers stepping on the brakes and cutting chip orders? After two seemingly contradictory financial reports were exposed this week, investors' confusion is understandable.
ON Semiconductor's stock price fell by more than 20% on Monday after disappointing third quarter results were announced. After Wolfspeed released its financial report for the same period on Tuesday morning, its stock price surged by 20%. Both companies produce silicon carbide chips, which are key components of chips widely used by electric vehicle manufacturers, but their descriptions of the industry's current situation are vastly different.
During a conference call on Monday, Ansemy stated that even car customers who have signed long-term supply agreements with the company are demanding a delay in order delivery. A major buyer has significantly reduced orders, reducing Ansemy's silicon carbide chip shipping target by about 20% this year. Analysts generally believe that this customer is Tesla.
This report has shaken people's confidence in the longer-term prospects of this chip manufacturer. Tim Arcuri of UBS Group (UBS) said in a report to clients on Tuesday, "In terms of Ansemy's long-term supply agreement, it is already a thing of the past
Meanwhile, Wolfspeed described in a conference call that customers have a "very, very high demand" for silicon carbide, and stated that its CEO now receives weekly calls from customers seeking to purchase more silicon carbide. Wolfspeed has made a big bet on building new silicon carbide chip production capacity, and in the past year, the company has also encountered some significant setbacks in fully building and putting these capacities into operation. But Wolfspeed now seems to have overcome these initial difficulties, with Ed Snyder from Charter Equity saying that Wolfspeed's silicon carbide chips are "unparalleled" in the industry.