Electrification is the most exciting disruptor in the world economy. Old-energy mindsets need to wake up to what’s happening in the East. China leads in all electrification technologies except semiconductors.
Silicon Carbide (SiC) is a critical semiconductor material of electrification. It has better performance than silicon in most applications using electricity. It’s disrupting traditional electronics and playing a major role in innovations of e-mobility.
While e-mobility has been SiCs biggest growth market, it’s pushing innovations in many advanced technologies including photonics, AR glasses, and directed energy weapons. SiC has very unique optical and electrical properties.
It is extremely difficult to produce high-quality SiC materials at scale. This is one of the most advanced technological materials humans produce with similarities to advanced computing semiconductors.
Geopolitical chip wars are also playing out in this space. The scary thing for silicon-only industry and China is that SiC’s entire supply chain can be controlled by one company in one country…
America’s Wolfspeed 
is also the world leader in SiC materials.
China leads in energy generation, transmission, transportation and storage. The biggest buzz at CES 2025 is chinese super cars. Combustion-based automakers are nervous.
EVs are reaching cost parity with ICE vehicles in China. EVs will be cheaper to purchase, have lower operating costs, and offer better performance. The technology is being applied to all transportation.
Freight and most marine shipping will be electric with big companies like Maersk already decarbonizing ports. Even most air travel will be electric as advanced air mobility takes off. Robots, trains, buses, and almost all objects will be moved with electricity alone. Using SiC in powertrains is opening up many of these new markets, and making existing applications more efficient.
China just approved the first commercial electric plane.
Renewable energy is the cheapest and fastest growing source of electricity. PV panel costs continue to drop, currently ~11 cents per watt worldwide, and applications continue to expand. American solar manufacturing recently jumped to 3rd biggest producer in the world.
PV and wind need inverters and Wolfspeed makes cutting edge devices used in inverters, chargers and battery systems. Same devices can be used on heat pumps, industrial motor drives, and induction heating. SiC increases electrical efficiency in all these applications.
The intermittent nature of renewables is being addressed with batteries and Energy Storage Systems (ESS). Costs continue to plummet with $66/kwh batteries having huge implications for the world’s combustion-based energy sources.
Doing things cheaper with electricity creates less need to manage tiny explosions and burn resources.
TSLA’s Megapack growth helped offset declining vehicle deliveries with some expecting ESS to be the bigger part of TSLA’s future. They will be competing with BYD and CATL, their Megapack partner and competitor. CATL’s new containerized battery has twice the capacity and better degradation performance but doesn’t come with an inverter, an opportunity for SiC device manufacturers.
ESS get better performance with SiC components.
Fast charging is a priority with huge SiC growth opportunities both onboard vehicles and in stationary charging infrastructure. [Wolfspeed is a leader in fast charging devices.
Almost all electrical grids need updating and better interconnection. High Voltage Direct Current HVDC is the preferred way to transfer large voltages over distance while interconnecting different grids in the renewal and management of electrical grids.
Even National Defense is electrifying with laser and directed energy weapons being made more effective with SiC. The US Military has supply partnerships with Wolfspeed.
The technologies involved in the Energy Transition are a difficult place to invest with all the disruption, innovation and competition. Wolfspeed’s SiC is an ideal long-term investment in this space. Even if Asian competition manages to close the considerable performance gap, it’s unlikely that foreign made semiconductors will be allowed in such important energy technology and infrastructure.
Wolfspeed is picks and shovels material because it can potentially benefit any product that uses electricity. Their long-term strategy of building new fabs entirely in America with control over the entire supply chain is about to pay off in big ways for years to come.
Share price is suspiciously low for the materials market leader in SiC industry expecting double digit CAGR growth to 2030. Doubts of insolvency ignore their current positioning compared to competitors. The new fabs are mostly done and now ramping with a significant head start on 200mm wafer revenue.
Significant CapEx reductions expected and 2.5B+ Cashflow anticipated over next two years. 28B Design-Ins and 11B Design-Wins since FY20 with both still growing. Plenty solvent for current revenue to scale into the flat market.
Do we expect electrification to stay flat or even decline? Not if we are going to keep up with China. If America can’t keep up in electrification we will decline.
What about Wolfspeed’s biggest growth market, EVs in America?
Inside EV covers Lucid’s record sales growth up 70% for 2024. Lucid has a multi-year supply agreement with Wolfspeed. GM is now the US #2 EV maker and have a supply agreement with Wolfspeed. Both are growing much faster than TSLA, who’s distracted leader no longer seems interested in e-mobility innovation. 
EV pessimists list range, charging time and charger availability as reasons not to adopt but all these concerns make SiC a smart investment. You may not like this electric disruption, but lower costs with higher performance always wins.
Timing is debatable but eventually this flat market must resume growth.
Institutional ownership has increased through the entire decline. Insiders bought more when restrictions were lifted after CHIPS negotiations.
The share price has been driven down by a small number of hedge funds. It’s not hard imagining the potential adversaries that may be trying to hurt an important American company and industry. Hopefully, we get more transparency and better short reporting in the near future.
Institutions happily make money off borrowed shares, knowing this company is extremely important and has obvious growth ahead. Institutions were buying above $100, knowing the new fabs were years away from generating profits. Now the modular, highly-automated, all-American factories are generating revenue. The highest quality SiC, most efficiently produced at market demand scale is now ramping.
No investment is without risk, but SiC leaders are foolish to ignore. WOLF is the best play in electrification and energy transition.