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   Technology StocksCree Inc.


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To: slacker711 who wrote (10435)8/31/2021 7:21:48 AM
From: slacker711
   of 10477
 
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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To: slacker711 who wrote (10436)8/31/2021 9:01:59 AM
From: OldAIMGuy
   of 10477
 
Hi S, Re: summaries of calls...................

Thanks for composing all of these summaries. This does help.

Best wishes,
OAG

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To: OldAIMGuy who wrote (10437)8/31/2021 9:49:40 AM
From: Lou Weed
   of 10477
 
I second that! Thx for all the time you put into this. Much appreciated slacker :-)

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To: slacker711 who wrote (10429)9/1/2021 8:11:10 PM
From: EvanG
1 Recommendation   of 10477
 
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?

STM financial quarters line up with the calendar year. So it takes some effort to try and align with Cree. Their SiC revenue has been:

Year Revenue
2018 $100 million for the year
2019 $200 million for the year
2020 Missed $300 million goal for year but made $300 million run rate for Q4
2021 Estimating $550 million for year (still 2 quarters to go)

With that revenue spread with constant quarterly growth within their financial years it looks something like this.



Cree's STM revenue can also be spread at a constant quarterly growth within the Cree financial years and then converted into a percent of STM's revenue.
  • If the 2021 STM ramp is completely 2nd half, the circled portion isn't real. But that would mean the 2nd half of 2021 would be around a $800 million run rate.
  • Perhaps ROHM took some share or there are yearly discounts. Up until calendar end 2020 there hadn't been a sizable shift.
  • The biggest factor could be that STM is now selling its 3rd Gen which is a sizable die size shrinkage. If that is a sizeable portion of the revenue and they can maintain good pricing then the percentage could have a large drop without Cree losing share.



Here is the die size shrinkage with the 3rd Gen from STM.


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From: Lou Weed9/6/2021 10:54:36 AM
2 Recommendations   of 10477
 
seekingalpha.com

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To: EvanG who wrote (10408)9/9/2021 8:42:11 PM
From: EvanG
   of 10477
 
II-VI said in a webcast today that they are working with an outsource wafer fab partner for SiC. Thought there is just X-FAB which is small with $24.8 million in SiC revenue the last 12 months. Is someone else besides X-FAB moving into the SiC foundry business?

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To: EvanG who wrote (10441)9/10/2021 7:47:26 AM
From: slacker711
1 Recommendation   of 10477
 
I think it's the first time I also have heard them mention using a foundry for their device strategy. I haven't heard of another SiC foundry and X-fab certainly doesn't believe that there is any real competition as they are projecting 90% SiC foundry share in '25.

Maybe an opportunity here if IIVI has any success with their fabless model.


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To: slacker711 who wrote (10442)9/10/2021 9:27:27 AM
From: slacker711
1 Recommendation   of 10477
 
Also, the die shrink noted by X-fab with their Gen 3 device reminds me that we are due to see Cree announce their Gen 4 devices. I believe the plan a few years ago was that they would make the transition to trench technology for this generation of devices. They are competitive with planar but my understanding is that they should see increased performance with trench but that they were working to increase the reliability.

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To: slacker711 who wrote (10442)9/12/2021 7:33:31 PM
From: EvanG
   of 10477
 
Maybe an opportunity here if IIVI has any success with their fabless model.

X-FAB and from my understanding Infineon as well, use the same fab to make Si and SiC. The high volume of Si helps lower the cost for SiC by keeping the fab highly utilized. X-FAB is using a 150mm BiCMOS fab. Infineon is using a 200mm fab.

Monolith Semiconductor, owned by Littelfuse now, is an X-FAB customer and put together the presentation linked below describing the process to get a Si fab to convert to running Si and SiC.

With X-FAB using a 150mm fab, not sure it meets II-VI goals. But it should be a matter of approaching a bunch of high volume 200mm fabs and see if one is willing to making tooling changes to work SiC as well.

nist.gov

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To: EvanG who wrote (10384)9/15/2021 2:05:46 PM
From: slacker711
1 Recommendation   of 10477
 
Cree says that they will be using thicker 200mm wafers as well.

unhedged.com

We
have a very strong team in place. And also, we put a very adequate capacity in place for our R&D people to do their jobs. Now 8-inch is, of course, a little more challenging in the sense that the wafers will be thicker than 6-inch wafers. So that means you have to make more crystal to get to more number of wafers out. But I would say the team has done fantastic up to this point. And the quality of the wafers that we're getting and also to following epitaxial processes, they're absolutely far with what we've seen in the 6-inch side of the business.

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