| To: slacker711 who wrote (10389) | 7/12/2021 12:41:02 PM | | From: EvanG | | | | This is obviously going to cause friction with wafer customers but they will likely be forced to deal with Cree through the next 3-5 years.
In a low growth environment with few players remaining I would agree but that could take decades. Expanding players will mean lower margins and lower market share. It is about surviving to be one of the few which helps if their are partners.
If they execute, the transition to 200mm will give Cree an enormous advantage.
I highly expect that not long after 200mm goes into mass production that 300mm is demonstrated. If Cree wants an advantage they need to not be outgunned on EBITDA by everyone of their competitors and that means making money, something they have consistently been unable to do. |
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| To: EvanG who wrote (10390) | 7/12/2021 2:17:30 PM | | From: slacker711 | | | | I highly expect that not long after 200mm goes into mass production that 300mm is demonstrated. If Cree wants an advantage they need to not be outgunned on EBITDA by everyone of their competitors and that means making money, something they have consistently been unable to do.
We are in limbo with Cree right now. The valuation is ludicrous based on current results and extremely rich based on the FY'24 guidance given in Nov '19. It will probably be 24 month before we can even begin to see what the results look like with the ramp of the Mohawk fab.
In other words, it is going to be a while before we can prove or disprove your skepticism.
FWIW, I doubt that they are going to fund much of their next fab. They received $500 million in subsidies before semis were considered a national priority by every region. |
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| To: slacker711 who wrote (10391) | 7/12/2021 7:54:54 PM | | From: EvanG | | | | FWIW, I doubt that they are going to fund much of their next fab. They received $500 million in subsidies before semis were considered a national priority by every region.
Cree needed to raise $500 million in February for the current fab. STM is investing $1.8 billion to $2 billion in CAPEX this year, which includes pulling forward their SiC substrate efforts. Just saying that size investment barely dents their finances and they didn't need to dilute their shareholders.
It will probably be 24 month before we can even begin to see what the results look like with the ramp of the Mohawk fab.
Gregg Lowe keeps making it sound like it will be early next year. Think 24 months would be a surprise to most investors. |
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| To: EvanG who wrote (10394) | 7/12/2021 9:04:16 PM | | From: slacker711 | | | | Cree needed to raise $500 million in February for the current fab.
The question isn't whether they are self funding now. That is obviously not the case but whether they will be in the future. I think that decent execution on the 200mm fab will get them there.
I also don't think that they will be supplying half the capex required on their next fab.
STM is investing $1.8 billion to $2 billion in CAPEX this year, which includes pulling forward their SiC substrate efforts. Just saying that size investment barely dents their finances and they didn't need to dilute their shareholders.
STM has guided for $1 billion in SiC revenue in 2025 which will be substantially less than 10% of their total revenue. I have no doubt that they will beat that number handily but the vast majority of their capex is going to non SiC projects.
Gregg Lowe keeps making it sound like it will be early next year. Think 24 months would be a surprise to most investors.
First wafers and qualification samples in the 1st half of 2022. First revs in the 2nd half of 2022. Margins and yields will suck at the beginning of the ramp so the 1st half of calendar 2023 is when I think we can start saying anything definitive about their choice of 200mm. |
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