| To: Lou Weed who wrote (10423) | 8/27/2021 5:05:12 PM | | From: EvanG | | | | 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 (10418) | 8/28/2021 12:35:25 PM | | From: slacker711 | | | | 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 | | | | 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 | | | | 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 | | | | 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 | | | | 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 | | | | 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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| To: slacker711 who wrote (10431) | 8/31/2021 7:13:37 AM | | From: slacker711 | | | | Cree Q4 2021 Earnings
Revs of $146m
Power saw strong growth constrained by COVID shutdown in Malaysia
Power device revs up 46% YoY
RF rev increased
Materials saw “better order flow”
Fiscal ‘21 rev of $526m, 12% up Yoy
Fiscal rev growth driven by growth in device business while materials were down
$475m in capex net of reimbursements
Guidance of $144 to $154m
GM of 31.5% to 33.5% Modest improvements in Durham offset by Malaysia
$80m in startup costs at MVF $60m in cash costs
Slightly more than $1 billion in design-ins
Materials expansion to 2nd building
$800m agreement with STM runs into the 2nd half of the decade (2026?)
LTA for 150mm total $1.3 billion
Q&A
$1 billion design ins with ? automotive. Doesnt include materials
Automotive customers ramping right now and ramping in ‘23
Malaysia cost 1 point of GM in this and next quarter
Durham to MVF
- Wafer cost 50% lower (doesnt include all benefits of 150 to 200mm transition)
- Cycle times will be >50% greater
- Yields will be higher than 20 to 30% higher than Durham
- Devices will grow faster than materials through ‘24 and even faster after that as the $1 billion in designs ins this quarter ramp.
- $5-$7 million impact from Malaysia, $3-$5m last quarter
- inflection point used to be ‘23/’24, now in FY‘22
- Need to drive more capacity out of Durham to serve demand.
- Pulling in about $100m in capex from ‘23/’24
- Put in 100 tools into Durham |
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| To: slacker711 who wrote (10432) | 8/31/2021 7:21:48 AM | | From: slacker711 | | | | One more comment that I thought was important.
Sixteen months ago (April 29th 2020), Lowe said that they were targeting margins higher than 50% in all three businesses (RF, power, materials).
Maybe that is no longer true, but if it is, then the market certainly doesn't believe that is the case.
Also, in Nov '19, Lowe said that they would shut the Durham fab down after they ramped up Mohawk.
Brian
K. Lee
• Goldman Sachs Group Inc., Research Division
• VP & Senior Clean Energy Analyst
Okay. Yes, fair enough. That's all very helpful. Maybe moving to more of a longer-term question, because hopefully, all of this does normalize sooner rather than later. But as we think about the longer-term margin targets, I would assume they're not changed here. But how should we think about some of the mix implications? So as the $9 billion device pipeline as you start to see more of the mix of power devices in sales, what are the margins -- or I guess, the implications on margins from that increasing mix?
The reason I ask being, if you look at other power semis categories, those peers tend to have margins that are more in the 30s and 40s, and you guys are obviously targeting a much higher margin profile in the long-term time frame. So just wondering how the increasing mix of silicon carbide power devices should impact the Wolfspeed gross margins and why they'd be higher than traditional power semis, if that's your view?
Gregg A. Lowe
• Cree, Inc.
• President, CEO & Director
Yes. Maybe I'll kick it off and then turn it over to Neill for some additional color and so forth. I guess what I would say is, number one, our long-term view and the goal that we have of running this business north of 50% hasn't changed at all. I think we've got pretty good line of sight to get there, and we've got a pretty good -- I think we have got a pretty solid plan in place, that is, I don't want to say mix independent, but all 3 of the businesses are targeting at that or higher margins. So the mix over a longer period of time shouldn't be an issue. Obviously, in the near term, we've got all of these issues that we're dealing with, but it really hasn't changed the longer-term target. Maybe I'll hand it over to Neill for a little bit more color. |
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