Semiconductor Stocks: Tesla Comments Sink Silicon Carbide Chipmakers – Investor's Business Daily
TRENDING: Nasdaq Soars In Increasingly Split Market
Brief commentary by a Tesla (TSLA) executive that the electric-car maker plans to cut the amount of silicon carbide chips in its next-generation powertrain drove SiC chipmakers lower on Thursday. Semiconductor stocks ON Semiconductor (ON), STMicroelectronics (STM) and Wolfspeed (WOLF) fell on the news. Tesla stock also retreated.
At Tesla’s investor day on Wednesday, Colin Campbell, vice president of powertrain engineering, announced that the company’s new drivetrain platform will use 75% less silicon carbide. The move is part of a larger plan to lower manufacturing costs by 50% for its next-generation vehicle platform. But details were sparse.
Tesla stock dropped 5.9% to close at 190.90 on the stock market today. Analysts griped that Tesla didn’t show off any new vehicles or provide any surprises.
The news also hammered semiconductor stocks tied to making silicon carbide power chips.
Meanwhile, shares of ON Semiconductor, also known as Onsemi, ended the day down 1.9% to 76.75, though it pared greater losses from earlier in the session. STMicro, the primary supplier of silicon carbide chips to Tesla, watched its shares retreat 2.4% to 47.78. Wolfspeed stock tumbled 7% to 69.58.
Aehr Test Systems (AEHR), which makes semiconductor test and reliability qualification equipment, saw its stock tank 15.3% to 30.50.
“Tesla reducing SiC area is not unexpected and the 75% number is largely a red herring,” semiconductor stocks analyst Jed Dorsheimer with William Blair said in a note to clients. “Tesla provided one data point without the proper context, and when this is understood, we believe this announcement will provide an opportunity for investors.”
Tesla’s current inverter is its original design from 2017, Dorsheimer said. Significant progress has been made in silicon carbide device design since then and fewer components are needed per unit now, he said.
Dorsheimer rates Aehr and Wolfspeed as outperform, or buy, and Onsemi and STMicro as market perform, or neutral.
Onsemi and STMicro are two semiconductor stocks on the IBD Tech Leaders list. Aehr Test Systems also is on the Tech Leaders list.
Further, STMicro is on the IBD 50 and Global Leaders stock lists.
Silicon carbide semiconductors can operate at much higher voltages, temperatures and frequencies than traditional silicon-based semiconductors. That makes them a better choice for electric vehicles, solar power conversion, 5G wireless, aerospace and other applications.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
YOU MAY ALSO LIKE:
Autonomous Trucks Are Barreling Ahead, But Robot Big Rigs Face A Bumpy Road
Best Buy Beats Fourth-Quarter Targets But Consumer Spending Still Weak
Casino Games Publisher SciPlay Comes Up Aces With Fourth-Quarter Report
Is Tesla Stock A Buy Right Now?
MarketSmith: Research, Charts, Data And Coaching All In One Place
7:43 AM ET Apple, Nvidia, Microsoft fueled the Nasdaq, but the market is increasingly split. Tesla has a new base, with caveats. Meta…
7:43 AM ET Apple, Nvidia, Microsoft fueled the Nasdaq, but the market is…
As the midpoint of 2024 nears, the stock market continues to draw from the same layers of support that have energized returns all year. (© Chris Gash)
Get instant access to exclusive stock lists, expert market analysis and powerful tools with 2 months of IBD Digital for only $20!
Get market updates, educational videos, webinars, and stock analysis.
Learn how you can make more money with IBD’s investing tools, top-performing stock lists, and educational content.
Notice: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. The information has been obtained from sources we believe to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Authors may own the stocks they discuss. The information and content are subject to change without notice.
*Real-time prices by Nasdaq Last Sale. Realtime quote and/or trade prices are not sourced from all markets.
Ownership data provided by Refinitiv and Estimates data provided by FactSet.
© 2000-2024 Investor’s Business Daily, LLC. All rights reserved
