Wolfspeed Inc at Citi Global TMT Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Atif Malik - Citi - Analyst : Gregg, if I can start with the the big question investors have, why do you think your stock price has underperformed by so much this year? What are the investors missing?

Question: Atif Malik - Citi - Analyst : Great. And let's just unpack a little bit. You guys mentioned Mohawk Valley, Durham, CapEx. Let's start with the Mohawk Valley fab. Gregg, you're expecting Mohawk Valley fab to reach 25% utilization in September quarter, which is one quarter ahead of the original plan. What gives you the confidence that you remain on this trajectory of getting to higher utilizations. You guys just take us to the ground and talk about what changes and improvements have you made where the yields are tracking better and everything? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2024 / 7:50PM, WOLF.N - Wolfspeed Inc at Citi Global TMT Conference

Question: Atif Malik - Citi - Analyst : Right. Neill, over to you. When you had your Investor Day, I remember three years ago or something, you guys talked about for the cost to be 40% lower per millimeter maybe utilization rates have to be at 80% or so for the Mohawk Valley fab and correct me if I'm wrong. But -- so how do we look at the cost improvements from here as the utilization improves. Is it a linear function? Or is it more of a step function in terms of how we should expect the margin profile? And is September quarter really the trough in your gross margins.

Question: Atif Malik - Citi - Analyst : Okay. And then moving on to the Durham 150-millimeter fab, you guys talked about pulling that down. And like to Gregg's point, that shows your confidence in the Mohawk Valley fab. But in terms of the handoff between the two, how do you guys ensure a smooth hand off? And just historically, what was the sales level or the margin level of the Durham fab that we should account for in the model?

Question: Atif Malik - Citi - Analyst : But I&E will remain a focus for you guys or are you guys even looking at exiting?

Question: Atif Malik - Citi - Analyst : Okay. So that helps on the supply side of the equation. You guys are starting to just try it in Mohawk Valley fab and transitioning Durham. So on the demand side, the EV market growth appears to be slowing down. And you guys are optimistic that the market will at least continue to grow for you guys, maybe a bit slower than before and a very strong design and activity still. Can you talk about your outlook on the EV market broadly next year and three years out?

Question: Atif Malik - Citi - Analyst : Then one of the concerns investors have on China competition. To your knowledge, are there projects in China that are doing 200-millimeter substrates? When we talk to the equipment makers that are supplying equipment to China, they talk about maybe 20, 25 different projects on the silicon carbide side, but we're not sure how many of them are 200-millimeter. But can you just talk about the threat of China? And are you seeing any pricing pressure in the market from China?

Question: Atif Malik - Citi - Analyst : Great. Let me pause here and see if any questions in the audience. Unidentified Participant So on the CHIPS Act funding, if it comes through, is it going to be one installment? Or is it going to be milestone-based? And how does it actually flow through?

Question: Atif Malik - Citi - Analyst : And Gregg, just a quick one. On the ASP side, have you guys seen any like decline on the ASP in the market or for, yourself?

Question: Atif Malik - Citi - Analyst : There's a question in the front. Unidentified Participant The first question, I guess, on utilization, you guys are talking about 25% next quarter. And then from your earnings call, you talked about 40% sometime mid next year. The trajectory seems a little slow compared to what we've seen on some other silicon fabs and understand silicon carbide. Are you essentially limited by Siler City ramping up or you're doing a slow ramp for some other reason? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2024 / 7:50PM, WOLF.N - Wolfspeed Inc at Citi Global TMT Conference

Question: Atif Malik - Citi - Analyst : Great. Almost we're out of time. On that optimistic note, we can wrap up our fireside chat. Neill and Gregg, thank you for coming to the conference. Thank you.