Wolfspeed is a semiconductor company specializing in bandgap technologies, focusing on silicon carbide and gallium nitride (GaN). The class action lawsuit against Wolfspeed claims that throughout the class period, the company and its executives made false and/or misleading statements and failed to disclose key facts. The lawsuit alleges that Wolfspeed exaggerated the growth potential of its Mohawk Valley fabrication facility and the demand for its 200mm wafers in the electric vehicle (EV) market. It further asserts that the company overstated demand for its core products and placed undue reliance on projected design wins, while growth at the Mohawk Valley facility had already begun to slow. Wolfspeed had also misrepresented the ability of the facility to achieve $100 million in quarterly revenue at just 20% utilization, and the $2 billion revenue target it had promised appeared unrealistic.

The lawsuit also claims that on November 6, 2024, Wolfspeed announced its financial results for the first quarter of fiscal year 2025, revealing that the actual performance of the Mohawk Valley facility was far below expectations. The 20% utilization of the facility would lead to revenue 30% to 50% lower than the previously projected $100 million. The company attributed the shortfall and lowered guidance to slower-than-expected demand, citing that EV customers were adjusting their launch timelines as the market navigated a transition period. Following this announcement, Wolfspeed’s stock price reportedly dropped by more than 39%.