2023-04-28 12:03:11 ET
Shares of silicon carbide semiconductor manufacturers Wolfspeed (NYSE: WOLF) , STMicroelectronics (NYSE: STM) , and Allegro MicroSystems (NASDAQ: ALGM) fell this week, down 22.5%, 9.7%, and 14.6%, respectively, through Thursday trading, according to data from S&P Global Market Intelligence .
Silicon carbide (SiC) is a type of semiconductor material made from the fusion of pure silicon and pure carbon molecules and then doped with other elements, according to the specification of the end application. Silicon carbide is more expensive and difficult to produce than traditional silicon, but it has excellent electrical conductivity, durability, and resistance to heat. As such, the silicon carbide market is projected to grow by leaps and bounds over the next decade, as it's a key material in electric vehicles, charging stations, electrical power utilities, and data centers.
On that optimism, some leading silicon carbide stocks had been bid up to relatively high valuations in recent weeks. However, SiC leader Wolfspeed reported its earnings this week, giving guidance for the next fiscal year that was below expectations. Management blamed operational difficulties in scaling up its new advanced SiC plant and also said it would have to raise more money before the end of the year.
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Why Silicon Carbide Stocks Wolfspeed, STMicroelectronics, and Allegro MicroSystems Plunged This Week