Wolfspeed and Navitas soar on positive spillovers from Huawei tech breakthrough, guidance boost from peer

Shares of Wolfspeed and Navitas Semiconductor are rising after power chip company Vicor boosted its Q2 guidance and a potential technological breakthrough by China’s Huawei is helping to boost US chip stocks with a big Asia footprint.

Vicor attributed the strong guidance in part to “royalties from an additional licensee to its patented power system technology.” Wolfspeed is a little more upstream from Vicor in the power chip industry as a silicon carbide producer.

Huawei, one of China’s national tech champions, said it’s developed a “LogicFolding” technology that will allow it to start producing 1.4-nanometer chips by 2031.

This announcement helped lift sentiment across Chinese semiconductor names. Semtech, another stock with historically elevated sales exposure to Asia, was up big in early trading but pared most of its gains. ASML is modestly lower, perhaps a nod to the idea that Huawei’s ability to manufacture chips this tiny without its top-notch EUV lithography machines (in light of export restrictions to China) undercuts its critical role in advanced semiconductor manufacturing.

(The irony of any US stocks going up on a Chinese tech self-sufficiency push is not lost on us, especially given competition from Chinese silicon carbide suppliers helped push Wolfspeed into Chapter 11 bankruptcy!)

TSMC, for its part, plans on having chips that small in mass production by 2028.