What happened

Shares of Wolfspeed (NYSE:WOLF) rose as much as 38% on Thursday, lifted by a fantastic first-quarter earnings report. The stock closed the trading session at a 33.2% gain.

So what

The maker of silicon carbide and gallium nitride (GaN) semiconductors saw revenue surge 36% higher year over year, to $156.6 million. On the bottom line, Wolfspeed's net losses shrunk from $0.24 to $0.21 per diluted share. Your average analyst would have settled for a net loss of $0.23 per share on revenue near $149 million.

A microchip peeks out from a pile of hundred-dollar bills.

Image source: Getty Images.

Now what

The company, formerly known as Cree, has divested its lighting and LED operations over the last two years, focusing on the exotic semiconductor business that Infineon Technologies (IFNNY 2.44%) nearly bought in an ill-fated deal five years ago. Cree recently adopted the name and ticker symbol of its exotic semiconductor division, and the reformed company is off to a great start with this muscular report.

The unique GaN and silicon carbide chips are used in high-powered growth areas such as automotive battery and sensor systems, 5G radio frequency devices, and industrial controllers. For example, the company recently announced a long-term partnership with General Motors (GM 2.25%), where Wolfspeed will supply silicon carbide devices for the automaker's various electric vehicle (EV) platforms. These vehicles will hit the market in 2024 and beyond.

And Wolfspeed achieved these eye-popping results in the midst of a global semiconductor manufacturing crisis. Its chip manufacturing partner in Malaysia restricted its output in the first quarter due to an outbreak of the COVID-19 delta variant. Malaysian operations are ramping back up to normal speed now, and I can't help but wonder how much more impressive the financial results could have been without that operating hiccup.

Wolfspeed should be able to keep the good times rolling as long as these target markets stay vibrant.