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To: EvanG who wrote (10421)8/27/2021 12:43:45 PM
From: slacker711
1 Recommendation   of 10665
 
My theory has been that RF revs fell off a cliff but they rarely talk about RF anymore (including the LDMOS revs) so it is impossible to say if this was the case.

The underlying problem is that Cree still doesn't break out the revenues within Wolfspeed. It is absurd that they have a single division and give total group revenues without giving the split between materials and devices.

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To: slacker711 who wrote (10422)8/27/2021 2:48:03 PM
From: Lou Weed
   of 10665
 
I've always seen this as problematic also. You can get some numbers from Yole about the rev split but that's just market research. Best guesstimates would be 45/30/25 split Materials/RF/Power?

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To: Lou Weed who wrote (10423)8/27/2021 5:05:12 PM
From: EvanG
   of 10665
 
Best guesstimates would be 45/30/25 split Materials/RF/Power?

From the 4Q21 call:
I would anticipate to Jed -- Ed, I'm sorry is that when we look at our plans for 2024 at $1.5 billion we were projecting that roughly $600 million of that was going to be devices.

And about $900 million of that was going -- excuse me $600 million was going to be materials and $900 million was going to be devices. Actually we are anticipating that our device business will be growing faster than the materials business through that timeframe of 2024. And it will most likely accelerate as a percentage of the business beyond 2024 as we start seeing customer ramp with the you know the $1 billion of device wins that we just posted this first previous quarter.

$600 million in materials out of $1.5 billion would be 40%. If the device business is growing faster than materials through 2024, then it would seem materials might be much larger than 45% currently.

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To: EvanG who wrote (10424)8/27/2021 5:18:34 PM
From: Lou Weed
   of 10665
 
Yep Evan - good call. Probably 60% + at this point. Thx for the update......

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To: EvanG who wrote (10418)8/28/2021 12:35:25 PM
From: slacker711
1 Recommendation   of 10665
 
A partial answer to your question about revenues from the 10k. Revenue from STM barely grew in FY '21 ($89.3m to $94.6m) STM signed a deal with SiCrystal (Rohm) in Jan. 2020 so perhaps we are seeing the impact of that in FY '21?

I'm going to try and dig up some more details about the revenue splits this weekend.

sec.gov


Customers
We have a small number of customers who represent more than 10% of our consolidated revenue. ST Microelectronics, Inc. (ST Microelectronics) accounted for 18%, 19% and 11% of our total consolidated revenue from continuing operations in fiscal 2021, 2020 and 2019, respectively. Sumitomo Corporation (Sumitomo) accounted for 10%, 14% and 14% of our total consolidated revenue from continuing operations in fiscal 2021, 2020 and 2019, respectively. Additionally, Arrow Electronics, Inc. accounted for 13% and 14% of our total consolidated revenue from continuing operations in fiscal 2021 and 2019, respectively. For further discussion regarding customer concentration, please see Note 16, “Concentrations of Risk,” in our consolidated financial statements included in Item 8 of this Annual Report. The loss of any large customer could have a material adverse effect on our business and results of operations.

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To: slacker711 who wrote (10426)8/31/2021 7:09:32 AM
From: slacker711
1 Recommendation   of 10665
 
Transcripts are great, but I finally did something I should have done a while ago....took notes on some earnings calls.

I really wanted to get a better understanding of what has been driving the recent margin and revenue trends. Unfortunately, it is still hard to parse the various pieces of color commentary that they have given over the last year or so.
For example, they said during the Q4 2020 earnings (last August) that materials made up half of revs. Unfortunately, they didn't specify whether they were talking about the whole fiscal year or the last fiscal quarter. Since that earnings call, materials revenues have grown "modestly" each quarter while device revs have seen substantial growth.

If materials were half of revs in Q4 2020, then they would be substantially less than that today. OTOH, that wouldn't be true if materials were half of revs for all of 2020. The last two fiscal quarters were impacted by COVID so it is really tough to parse the statements around those particular quarters.

One thing I am fairly certain of, they have substantial amounts of excess capacity for materials right now.

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To: slacker711 who wrote (10427)8/31/2021 7:11:07 AM
From: slacker711
   of 10665
 
Cree Q4 July 2020

Wolfspeed $108m revenue
RF “some improved performance”
Early signs of strengthening demand in RF and power
Materials declined as expected. Unable to ship to one customer (STM?)
GM of 35.3% driven by COVID costs
$400m of capex in 2021. Expect ‘21 to be peak.
Guidance of $107-$117m GM’s of 35.5 to 37.5%
150mm MOSFET yields still below expected levels
$600m in design awards
Opportunity pipeline is “well above” $10 billion
Delphi win expected to ramp between ‘22 and ‘23

Q&A
Device side saw strong demand, particularly for power
Materials side slower demand. Expect “modest improvements” through end of ‘20. More substantial in ‘21
Outsourcing LED SiC operations and moving capacity to wolfspeed. Increased capacity “into FY ‘22”. Presumably devices.
Materials expansion linear growth.

Capex in ‘21 could be higher but then ‘22 would decline.

No shipments to Huawei and no revs in device guidance. Maybe small material revs could be impacted going forward.
Repurposing Huawei technology for other customers.

Snyder question. Management used to say ? GaN ? SiC ? materials.
Last several years materials growing faster than devices.
Right zip code with materials “roughly half” of Wolfspeed.
Power fastest growing through ‘24
Some RF design wins during quarter.
Normalized Wolfspeed margins ~40%, 50% once you get to MVF

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To: slacker711 who wrote (10428)8/31/2021 7:11:51 AM
From: slacker711
   of 10665
 
Cree Q1 2021 Earnings October 2020

Wolfspeed $116m in revs
Driven by “continued demand” in power and some improvement in RF and Materials
Gross margin 36.6%
Increase in GM driven by cost and yield improvements in RF and power offset by lower material utilization
Capex remains $400m (net)
Guidance of $118 to $124m driven by power. RF and materials with modest improvements.
GM 37%-39%
$700m in design ins

Q&A

>60% of $700m design ins for automotive
RF dominated by China. No Huawei revs
Roughly 50/50 split between devices and materials. Expect faster growth in devices through ‘24. Won’t be smooth fits and starts depending on timing in each business
Automotive less than 10% and true in FQ1 ‘20 as well
Engaged with all non-Huawei RF. “Got some wins”
Design-ins go to design wins when production starts.
Very good aerospace and defense business. “Pretty good portion” of RF

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To: slacker711 who wrote (10429)8/31/2021 7:12:24 AM
From: slacker711
   of 10665
 
Cree Q2 2021 Earnings 1/27/21

- Starting MVF at 200mm
- Capex from $400m to $550m
- Greater percentage completion of MVF as well as 200mm and epi capacity
- Wolfspeed revs $127m
- In power, momentum continues.
- RF “performance was better”, backlog increasing
- Materials “modest uptick”
- GM was 38.5%
- Guidance of $127-$133m
- GM guidance of 34.5% to 36.5%
- $600m in design ins
- Extension of previous material agreement, now worth $250m.

Q&A

- No intention of selling 200mm wafers in ‘22.
- Expanding wafer fab in Durham. Will remain 150mm
- Industrial ramps 2-4 years after design-in
- of $600m in design-ins, little more than half were auto and a quarter were industrial
- Revenue from June lows ($108m) to today driven by devices. Modest increase in RF.
- Durham issues are independent of substrate.

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To: slacker711 who wrote (10430)8/31/2021 7:13:01 AM
From: slacker711
   of 10665
 
Cree Q3 2021 Earnings call

Revs were $137m

RF “improving trends”

Strong demand across devices, up “more than” 50% YoY revs

Modest uptick in materials

Guidance of $142 to $148m supported by momentum in devices and modest improvements in materials

$580m in design ins


Q&A

Pilot line yields very very positive.

Significant increase in activity around “directed buys”.

Engagement in base stations in China is extremely limited. Huawei cant use and others (ZTE) are biased against.

Incrementally better outside of China

4 new RF products sampling. New products generally accretive to margins.

A question about the slow pace of rev growth with materials. Says that most material revs are under LTA’s. Going as planned. Says 60% of merchant material market and expect to keep that going forward.


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