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   Technology StocksCree Inc.


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To: slacker711 who wrote (10410)8/17/2021 7:59:43 PM
From: Lou Weed
   of 10481
 
I wonder if design in = design win? You can be designed in but not necessarily win all or any of that business, depending on your competition (new pricing, qualification issues with their part, delivery constraints etc.). Also, is that $1B over the life of the projects or from one year of revenue......lots of ????

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To: Lou Weed who wrote (10411)8/18/2021 6:42:07 AM
From: slacker711
   of 10481
 
I wonder if design in = design win? You can be designed in but not necessarily win all or any of that business, depending on your competition (new pricing, qualification issues with their part, delivery constraints etc.). Also, is that $1B over the life of the projects or from one year of revenue......lots of ????

Yeah, I don't understand why they don't use the word "design win" instead of "design in".


The revenue number is definitely uncertain. These are projections from the customer and they cover the life of the project. Some might ramp in a year but auto revs are 3-4 years out and that obviously means that the delta of any projections is large. The larger customers also might have an incentive to increase their projections so Cree will increase capacity which would serve them well.

All of that being said, they are winning business and the step up in design in activity bodes well for Cree's ability to transition into a vertically integrated component supplier.

Personally, I heard what I wanted from the call and the fact that the market is going to sell of anyway is a good thing. The valuation has sucked on Cree for a while but we might get prices that don't require substantial upside to the current '24 projections.

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From: slacker7118/18/2021 8:29:46 AM
1 Recommendation   of 10481
 

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To: slacker711 who wrote (10412)8/18/2021 9:01:31 AM
From: Lou Weed
1 Recommendation   of 10481
 
Yeah, - I'm guessing there's a suitor waiting in the wings for a more substantial drop to step in and make an offer. The valuation is still way too high. Lowe has been there what, 4 years now? I give him another 2 - 3 years at the most. It'll be taken out somewhere in that time frame IMO.

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To: slacker711 who wrote (10413)8/18/2021 10:43:42 AM
From: OldAIMGuy
   of 10481
 
Hi S, Re: Price Targets.........................

Those new guide prices are somewhat closer to what Value Line is showing for the 3-5 year time horizon.

Value Line Price Targets
3-5 Year Range - $35 to $55

Their write-up suggests the stock got way ahead of itself with the ~4X gains over the last year or so. Current Price/Book is 4.1. Selling off the lighting division forced VL to suspend their "timeliness" rank for now as they feel there won't be any useful year to year comparisons for a while.

I was selling into that strength so have a bunch of cash sidelined for share repurchases sometime in the future should it figure out how to make product and sell it at a profit.


There's now more cash in this sleeve than there was total investment back in 2014. It's over 50% of current account holding value.

Best wishes,
OAG

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To: OldAIMGuy who wrote (10415)8/18/2021 11:29:19 AM
From: Lou Weed
1 Recommendation   of 10481
 
Great move selling into that strength. I did also but a little sooner than you did - no harm though, never complain about a profit ;-)

I agree - its still way ahead of itself at this price......

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From: slacker7118/19/2021 10:20:10 AM
2 Recommendations   of 10481
 
The two parts of the earnings call that I found most interesting.

unhedged.com

Reynolds straight out says that the $1.5 billion revenue guide is now low.

And what type of cost that is, I mean probably if you go back to January and the CapEx plan that we laid out when we launched 200-millimeter, this is largely the same plan. What we're trying to do is capture the capacity and the revenue in such a way by pulling in that same plan anywhere we can to drive more capacity. So some of that was going over '23 and '24. Some of that was materials expansion for facilities and things like that. So you can think about it as being -- maybe pulling in roughly $100 million maybe versus what we anticipated before. But with the expectation that as we get out to '23 and '24, we can meet a higher revenue level than we had anticipated previously in the $1.5 billion plan.


and management gave some hard numbers around the anticipated savings around Mohawk.

Let me just kind of spell that out a little bit in further detail. I think If you think about the differences between North Carolina and Mohawk Valley, wafer cost, for instance, in Mohawk Valley will be more than 50% lower than what we currently have in Durham. And that's not completely including the full benefit of moving from 150-millimeter to 200-millimeter at diameter change. Cycle times in Mohawk Valley will be 50% greater or better than what we have -- so 50% better than what we have in Durham. And then lastly, the yield in Mohawk Valley will be 20% to 30% -- sorry, 20 to 30 points higher than what we have currently in Durham.

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To: slacker711 who wrote (10417)8/19/2021 10:50:44 AM
From: slacker711
1 Recommendation   of 10481
 
Also, this from the 10k. Capex is much larger than they are indicating.

sec.gov

For fiscal 2022, we target approximately $475.0 million of net capital investment, which is primarily related to capacity and infrastructure projects to support longer-term growth and strategic priorities. This target is highly dependent on the timing and overall progress on the construction of our new silicon carbide fabrication facility in New York and is net of approximately $300.0 million of expected reimbursements from the State of New York Urban Development Corporation under the GDA.

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To: slacker711 who wrote (10417)8/21/2021 11:15:55 AM
From: EvanG
   of 10481
 
Reynolds straight out says that the $1.5 billion revenue guide is now low.

2021 has turned out to be a massive growth year for SiC. Yole majorly revised up their 2021 estimates but they didn't revise later years. 2024 has yet to be revised up, it doesn't make sense that it just fizzles out.

Infineon SiC revenue will be up 100% in its FY21. STMicroelectronics SiC revenue will be up at least 80% in its FY21. If you back out II-VI SiC revenue from their transcripts, SiC revenue was up at least 50% in their just reported FY21. Growth in just those 3 companies combined for over 70% of Cree yearly revenue, pretty significant.

Yole estimate from Q2 2021:


Yole estimate from Q1 2020:

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To: EvanG who wrote (10419)8/25/2021 9:10:00 AM
From: slacker711
1 Recommendation   of 10481
 
An "Ask the expert" session covering ST's SiC portfolio and plans.

youtu.be


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