Wolfspeed defended by Roth MKM after Tesla-related drop causes worries
Justin Sullivan/Getty Images News

During its investor day, Tesla (NASDAQ:TSLA) said that it had discovered a way to use less silicon carbide in its vehicles.
However, investment firm Roth MKM said that while Tesla's (TSLA) announcement would weigh on silicon carbide companies, including Wolfspeed (NYSE:WOLF) stock, there is a "good chance" the claims may not materialize or the entire silicon carbide industry benefits. 
"In our opinion, Tesla has a history of overstatement, so in all likelihood this claimed improvement in heat extraction (packaging technology) accelerates industry adoption to WOLF's benefit," analyst Craig Irwin, who has a buy rating on Wolfspeed (WOLF), wrote in a investor note. 
Wolfspeed (WOLF) shares fell more than 10% in early trading, while competitors ON Semiconductor (NASDAQ:ON) dropped 5.5% and 5.8%, respectively.
During the event, Tesla's (TSLA) president for powertrain engineering Colin Campbell said silicon carbide is an "amazing semiconductor," but added that it is expensive and "really hard" to scale, so using 75% less of it in cars is a "big win for us."
Irwin added that any increase in packaging engineering efficiency would benefit the entire silicon carbide industry and wind up being a long-term benefit for Tesla's (TSLA) silicon carbide suppliers, including Wolfspeed (WOLF), ON Semiconductor (ON) and ST Micro (STM).
Last month, Goldman Sachs listed Wolfspeed (WOLF) among its favorite stocks for clients to own.