Wolfspeed’s board is dismissing CEO Gregg Lowe, who has led the chipmaking company since 2017, effective at the end of the month. Board Chair Thomas Werner will lead the company until a permanent chief executive can be hired, the chipmaker said today.
Lowe also held the role of president and was a member of the board of directors. Wolfspeed will seek a permanent CEO with the support of a global executive search firm.
Wolfspeed shares closed Friday at $6.70, 1 cent above its low for the past 52 weeks. It traded as high as $47.43 in the past year, a decline of more than 79%.
Werner has been a Wolfspeed board member since March 2006 and chair since October 2023.
“I have started in the role of executive chairman to keep Wolfspeed focused on completing key priorities while the board conducts a search for our next CEO,” says Werner.
Earlier this month, the Durham-based chipmaker announced that it’s cutting staff in the face of “current market conditions” and the impending closure of a wafer production line at its Durham factory.
The move will “result in an additional 10% of roles being eliminated across the global organization,” on top of a 10% reduction earlier in the year taken via “attrition and voluntary early exits,” spokeswoman Bridget Johnson said earlier this month.
Headcount-wise, Wolfspeed had 5,013 people on staff as of June 30, a post-pandemic high for the mid-year milestone.
Wolfspeed’s in the midst of shifting production to what it calls a “pure play” of 200-millimeter chips. The line it’s closing in Durham makes 150-millimeter chips.
Another line in Durham serves the 200-millimeter market, as does a new factory near Utica, New York, and the new wafer factory it’s in the process of standing up near Siler City that’s expected to employ 1,800 workers.
Building and opening the two new factories has been expensive. Wolfspeed officials say the company spent $2.1 billion on capital projects in fiscal 2023-24 and expects to spend an additional $1.1 billion to $1.3 billion this year.
The latter figure is about $100 million less than originally projected, while the job cutbacks and other streamlining moves should save about $200 million a year.
Those savings matter because Wolfspeed continues to lose money.
Earlier this month, Wolfspeed reported a net loss of $282.2 million for the first quarter of fiscal 2024-25, topping the company’s previous estimate that it would lose $194 million to $226 million in the period.
The company is warning investors to expect a $362 million to $401 million loss in the second quarter.
Werner says Wolfspeed can do better. “Wolfspeed is materially undervalued relative to its strategic value and I will focus on driving the company’s priorities and working with the Finance Committee of the board to explore options to unlock value.”
Werner has served as executive chairman of SunPower Corporation, a publicly traded marketer of solar cells and solar panels, since February. He was Sunpower’s board chair from June 2010 to November 2021 and as its CEO from June 2003 to April 2021. Before SunPower, Werner was CEO of Silicon Light Machines, an optical solutions subsidiary of Cypress Semiconductor, from 2001 to 2003.