Wolfspeed Inc at JPMorgan Global Technology, Media & Communications Conference Transcript

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

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : Let me kick it off quickly just in the interest of time. Gregg, we can get into more detailed discussions later, but do want to sort of set the stage here for any new investors and overall sort of talking about silicon carbide. And why should investors really be sort of looking at silicon carbide as a disruptor? And why should they be interested in investing in it as such?

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : Great. So one of the questions I get asked most often from investors is the competitive moat in silicon carbide, right? And you are a leader in substrates, you are trying to build a bigger presence in devices. And the question often coming up is, where is the competitive moat in the process? Going from like crystal growth to device manufacturing, where is it the highest? And what's driving your interest in the device market? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 23, 2022 / 3:20PM, WOLF.N - Wolfspeed Inc at JPMorgan Global Technology, Media & Communications Conference

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : Good. Gregg, one of the questions that I get on that front is, how should an investor be convinced that the market leadership that you have in substrates translates into leadership in devices? And you just mentioned that you've been in the devices market for a while as well. So as we think sort of go forward, is it more of still sort of a bunch of capabilities that you need to add? Or is it more of just driving the go-to-market, getting out to customers and driving essentially the ramp in revenues? How should we think about that?

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : Yes, great. So I'll start with a few questions here. And for anyone on the webcast, I'll be honest, we don't need more questions. We have like 11 or 12 here. So no need sending anymore, and I think we'll have Neill busy here for the next 15, 20 minutes. So let me start with a few of these. You announced CapEx plans for $550 million for fiscal '23, which compares to, I think prior, the range was about $200 million, $300 million. What's the incremental $300 million of CapEx being spent on?

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : Yes. A follow-up here. And bear with me, this is a long one. Why wasn't there an increase to your 2024 to 2026 revenue targets commensurate to the pull-forward in CapEx? Should we be thinking about a pull-forward in revenue as well?

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : Okay. Great. So maybe a bit more medium term here. You've also talked about requiring a new fab. Just help us think about sort of the magnitude of the investment that will be required for that. What is the time line? Sort of like more particularly relative to Mohawk, what does the time line look like there in terms of starting something that's more greenfield and getting up and running?

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : So going back to the question and following up here, Neill. The reason I asked that is, so the increase in the CapEx guidance for fiscal '23 does not -- just to clarify, does not include anything relative to a new fab at this point, right?

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : Yes. okay. Now in terms the -- you talked about the increase in CapEx, so the net CapEx bases. I think what the math investors are doing is on gross CapEx that you're spending, which is up slightly higher just because of the change in timing on subsidies, I believe. That comes to about $400 million. You just mentioned 1 to 1.5 being the sort of intensity in terms of CapEx -- translation of CapEx to revenue. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 23, 2022 / 3:20PM, WOLF.N - Wolfspeed Inc at JPMorgan Global Technology, Media & Communications Conference I think the question we're getting a lot is, if that's the gross CapEx increase, should we be applying a similar multiplier in terms of what your revenue projections should be? Or is it a higher number because the 1 to 1.5 includes building like brick-and-mortar cost as well, right?

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : Last one on CapEx, I promise, here. What's the ongoing capital intensity of the business outside of build-outs of capacity?

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : Okay. Great. So let me come back here to the long-term story a bit. You disclosed at the Analyst Day addressable market -- automotive addressable market of $4.6 billion, and the content per vehicle that it was contingent on is about $300. So how CPV tracking, content per vehicle, tracking relative to your expectation? How are you thinking about sort of upside to that? What are you seeing in terms of vehicle architectures that can drive that number higher?

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : Gregg, you're referring to this as a sort of the broader industrial adoption as well. But I wanted to see if you can break it out in terms of like within -- because industrial is quite broad. Like which sort of verticals are you seeing more adoption? And outside of automotive, where are the biggest interest company areas?

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : Let's open it up to the audience. Anyone in the room with a question? Yes. You can go ahead and... Unidentified Analyst [Is there a component or part of the process that's coming from China and subject to lockdown? And I'm wondering what your strategy is to replace them if that's the case.]

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : Gregg, sorry. We'll need to repeat the question. Sorry. Is there a -- so the question is, is there a component coming from China? And if there's a strategy to sort of navigate that...

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : Please go ahead. No, there's no mic. Yes, sorry, go. There is not. Yes. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 23, 2022 / 3:20PM, WOLF.N - Wolfspeed Inc at JPMorgan Global Technology, Media & Communications Conference Unidentified Analyst [How do you see the industry evolving for materials? A lot of OEMs are trying to make their own. And where do you see in like 3, 4, 5 years? Like do you think the amount of will with inflation or...]

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : yes. So the question is, how do we see -- how does Wolfspeed see the materials market evolving? And is there more vertical integration over the next few years?

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : Yes. So the question is on the competitive landscape in devices.

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : Please go ahead. Yes. Unidentified Analyst

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : Go ahead and answer it. Yes.

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : Great. We've run out of time here. So thank you, everyone. Thank you, Gregg and Neill, thank you.