| To: EvanG who wrote (10403) | 8/11/2021 7:12:36 AM | | From: slacker711 | | | | Apparently it is 15,000 wafers/month capable. Not 30,000 wafers/month and they can't say if they are selling any. At a $2.5 billion cost, wondering how this is low cost.
Subsidies from the state probably make it low cost to the company but you still need decent yields for the economics to work.
We are getting headlines about SiC capex plans almost every day but I'm not sure any of these new players are doing anything beyond shipping samples. The idea that a company is going to start shipping their first 6" wafers in '21 and then have commercial 8" wafers in '24 seems extremely unlikely. |
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| To: slacker711 who wrote (10402) | 8/12/2021 7:29:49 PM | | From: EvanG | | | | IIVI plans on investing $1 billion into SiC over the next ten years. That covers both capex and R&D.
II-VI had a conference call today. Clarified that the $1B included $200-$250 million in OPEX (a good portion manufacturing engineering and design for manufacturability) with the remainder in CAPEX mainly in a 3 year intensity with some followup in remaining years. |
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| From: slacker711 | 8/17/2021 7:16:43 PM | | | | | | Another earnings report.
Margins still suck.
Demand continues to inflect higher (capacity constrained in FY'22).
$1 billion in design ins in the quarter and $2.9 billion in the last year.
They are going to spend a billion dollars in capex total in fiscal years '21 and '22. That was supposed to be their expenditures over five years.
Market clearly in show-me mode.
investor.cree.com |
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| To: slacker711 who wrote (10407) | 8/17/2021 7:59:43 PM | | From: Lou Weed | | | | | 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 (10408) | 8/18/2021 6:42:07 AM | | From: slacker711 | | | | 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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| To: slacker711 who wrote (10409) | 8/18/2021 9:01:31 AM | | From: Lou Weed | | | | | 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 (10410) | 8/18/2021 10:43:42 AM | | From: OldAIMGuy | | | | 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 (10412) | 8/18/2021 11:29:19 AM | | From: Lou Weed | | | | 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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