Wolfspeed(US:WOLF)2024-02-01 00:31Financial Data and Key Metrics Changes - The company generated revenue of $208 million for the quarter, a 5.6% increase sequentially and nearly 20% year-over-year [65] - Non-GAAP gross margin in the second quarter was 16.4%, representing an 80 basis point improvement from the prior quarter [67] - Non-GAAP EPS of negative $0.55 surpassed guidance, despite underutilization costs of $35.6 million [60][68] Business Line Data and Key Metrics Changes - Power device revenue reached a record $108 million, driven largely by contributions from the Mohawk Valley facility [65] - Materials revenue was approximately $90 million to $95 million, down from $101 million in the prior quarter, but still showed strong execution [73] - The Mohawk Valley Fab contributed approximately $12 million to quarterly revenue, tripling from the previous quarter [47] Market Data and Key Metrics Changes - The company noted persistent weakness in industrial and energy markets, particularly in China and Asia, impacting revenue from the Durham Fab [75] - The EV-related device revenue saw a sharp increase of about 30% quarter-over-quarter, but was offset by lower industrial energy revenue [10] Company Strategy and Development Direction - The company is focused on ramping the Mohawk Valley facility to achieve 20% utilization by the June quarter and $100 million in revenue by the December quarter [44][79] - There is a commitment to ramping the JP facility in Siler City, with expectations for boule production to start by the end of calendar 2024 [54] - The company aims to maintain a long-term goal of 50% margin for the overall business, with materials products already in that range [5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand for high-quality wafers, indicating a favorable pricing environment [4] - The industrial business is expected to recover eventually, but management does not anticipate improvement within the current calendar year [8] - The transition from internal combustion engines to electric vehicles is ongoing, with a significant increase in the appetite for silicon carbide across various OEMs [21][22] Other Important Information - The company completed the sale of its RF Business to MACOM, with results classified as discontinued operations [40] - The company ended the quarter with over $2.6 billion in cash and liquidity to support growth plans [69] Q&A Session Summary Question: What is the potential for Mohawk to ramp up to 20% utilization? - Management noted that the team has relieved bottlenecks and is confident in achieving the 20% utilization target by the June quarter, with $100 million in revenue expected by December [94] Question: What changes are seen in the conversion of design-ins to design-wins? - The company reported a record conversion of $2.9 billion to design-wins, indicating strong customer interest and confidence in technology [97]