The Chip Insider®–Wolfspeed: When a tactical opportunity is a strategic error. Maxims.

Wolfspeed's bankruptcy shocked many and saddened more. It was a great and well-respected technology company that was led to this state by a perfect storm of execution issues, compounded by financial woes as the EV market softened and Chinese SiC competitors…Yet its core issues date well back before this…Part of the core reasons behind Wolfspeed’s woes can be blamed on the old Hewlett-Packard first-mover principal of “The early bird gets the worm. But the second mouse to the trap gets the cheese.” They were way too early. They could have done little to change this. A big mistake they could have avoided is the strategic error made in pursuit of a tactical opportunity: “biting the hand that feeds you”…

Wolfspeed/Cree was some two decades ahead of the market demand wave for SiC that would come with the EV revolution. Tesla would not … ship its first car, the Roadster, until 2007. Clearly, Wolfspeed’s founders saw the opportunity for SiC, introducing the first SiC MOSFET in 2011. This might have been in frustration with chip manufacturers, who are notoriously slow adopters of new materials. Nevertheless, there were now competing with their customers…

By 2018, Wolfspeed was doubling down on competing with customers… The new plan was to be a leading manufacturer of SiC power devices for markets like electric vehicles, fast-charging stations, and renewable energy.

However, while Wolfspeed was the world's expert in SiC wafers, it had few core strengths in power devices. As TechInsights Senior Technical Fellow, Stephen Russell put it, “Wolfspeed were conservative in device design, sticking with planar MOSFETs while Infineon and Rohm took the risk on trench designs…” So they had started to compete with their customers with no technical advantage, other than with the substrates... Then customers, with greater financial resources, decided to go after Wolfspeed’s SiC substrate advantage by vertically integrating down-market. Wolfspeed was… playing checkers against competitors who were playing chess.

Maxims: Strategy versus tactics, know the difference. Strategy versus Grand Strategy – the difference is significant.

"Strategy requires a sense of the whole that reveals the significance of respective parts." – John Lewis Gaddis