$MP $ON $WOLF $TSLA: Tesla’s plan to slash silicon carbide use sends some chipmakers’ shares down

:pushpin: Tesla plans to slash use of silicon carbide transistors 75%, powertrain engineering leader Colin Campbell told investors Wednesday.

:pushpin: Investors, worried that this may be a harbinger for the industry, sent shares of chipmakers ON Semiconductor, ST Microelectronics and Wolfspeed down.

:pushpin: Chips made with silicon carbide transistors are widely used in electric vehicles. Generally, they withstand more heat, have a longer life and are more energy-efficient than semiconductors made with silicon power transistors.

At Tesla’s 2023 Investor Day presentation on Wednesday, which largely focused on efficiency and controlling costs, powertrain engineering leader Colin Campbell took the stage to show how the company plans to reduce the cost of their cars’ powertrains, while maintaining high performance and energy efficiency.

Campbell revealed that, “In our next powertrain, the silicon carbide transistors that I mentioned, that are key component[s] but expensive, we figured out a way to use 75% less without compromising the performance or the efficiency of the car.”

Shares of ON Semiconductor and ST Microelectronics each lost about 2%, while Wolfspeed dropped about 7% as investors worried that Tesla’s moves would be a harbinger for the automotive industry.

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