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Technology Stocks : Cree Inc. -- Ignore unavailable to you. Want to Upgrade?

To: slacker711 who wrote (10429)8/31/2021 7:09:32 AM
From: slacker7111 Recommendation

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  Read Replies (1) | Respond to of 10503
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.

To: slacker711 who wrote (10429)9/1/2021 8:11:10 PM
From: EvanG1 Recommendation

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  Respond to of 10503
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.