Started. So thank you, all for listening. I'm François-Xavier Bouvignies from the Tech Hardware /Semi i n Europe. And today, we're happy to have Neill, CFO of Wolfspeed, and Tyler, Head of Investor Relations. So thank you very much for being with us. So maybe let's get straight into it because we have only half an hour. Sure. Maybe if you can start with an overview, right? You wanted to give an overview of the market and how is it trending, and then we can move to Q&A. Yeah, actually, thanks, first of all, François, thanks for having us here. It's terrific to be back at the conference again. Three things I want to just talk about kind of upfront. Number one is a lot of questions about our Mohawk Valley Fab and ramp. We're on track for 20% utilization by June. I'm sure we can get into that a bit. In fact, Gregg, our CEO, was just up at the fab on the U.S. Thanksgiving holiday last week, and the teams are making terrific progress up there in terms of the ramp. The second thing is the JP, the Siler City substrate facility that we're building down in Siler City, North Carolina, that is on schedule and on budget. So we feel we should be able to start growing crystals out of that initially in the back half of calendar year 2024. Third thing is from a demand perspective, our auto demand remains very, very strong. I'm sure we can get into that discussion as well. However, we are seeing some weakness, as we flagged on our Q1 earnings call, in the industrial and energy markets. We should see that continue for one or two more quarters, although we feel very comfortable with the guidance that we laid out for you know for Q2. So that's really where we you know where we sit right now. Now, what we also will do is maybe take that softness from a period of time. We'll do some maintenance and some infrastructure work on our Durham campus, you know, early in next quarter. But that's really where the lay of the land is right now. Perfect. It's a good start. And if you want to ask a question in the audience, you can do it with the app. I will be able to see it here, and then I will be happy to ask the question for you. So, maybe, I mean, we can unfold a bit this kind of demand, you know, in terms of what you see. Yeah. Can you, like, automotive, industrial, exactly what are the drivers of any weakness that you see? I know we have this kind of renewable part, which is a bit, we have mixed signals, you know like a big inventory is maybe going down, but some other players, like, Infineon, are not seeing so much for now. Automotive also very mixed signals, right? Because in one way, you have a player that's saying that we are full, demand is way above supply. Yeah. And then we have another player that you know, decreased their targets for silicon carbide, this year. So can you maybe tell us what you see here? Look, I can give you some background from our perspective. You know, I think when we started this journey in silicon carbide, you know, several years ago, and with the number of design-ins that we've won over the last several years, over $22 billion, just since 2020, I believe. So looking back over that time frame, we thought the ramp for automotive would be happening right around this time frame. That's exactly what we're seeing for silicon carbide, based businesses, or based, you know, model vehicles. And that's what we're seeing ramp right now. So as you look out into what we're seeing, we right now have over $100 million of unfulfilled automotive demand right now. And maybe what we're seeing from a market perspective is some, some non-silicon carbide-based, IGBT type of vehicles, maybe, maybe backing up a bit. But the initial ramps of the silicon carbide-based drivetrains in electric vehicles, we're seeing, you know, we continue to see very strong demand. In fact, Gregg, our CEO, and I are on calls almost every day with Tier 1, and OEM executives, just around, production allocation and ensuring that we can, you know, ramp the factory and get them their, their products as, you know, as soon as we absolutely can. Okay, that's good. I mean, how fungible it is? I mean, from, you know, industrial and automotive, if you see a slowdown in automotive, can you reallocate, you know, quickly into the automotive business, given that you have this buffer of demand versus supply? For the most part, yes. So we have a lot of... It really depends on part qualification. We have, you know, a significant amount of capacity that's coming online, both from a substrate perspective and a fab perspective. And as long as we have the parts qualified, we can move between products, you know, as required. I think we can do that relatively quickly. From an automotive perspective, we do have a wide array of customers that we're working with globally, that's in the U.S., that's in Europe, that's in Asia. So if there were some changes in customer demand, we would just ship one customer, you know, over to another. Maybe not part for part, we might take a production cycle, but that's how we would, that's how we would manage it. I think it's important, important to point out, because I think some have kind of indicated that they're seeing some softness in their business. As Neill pointed out, that's probably on legacy designs. I mean, where we sit today, there are two factors that an OEM is looking for: high quality devices, for sure, and, and we usually finish one or two in the bake-off with, with customers. Then the second thing is, they are looking for capacity investment, and they... This is a big reason why that we, you know, made the commitment to build Siler City, to put Mohawk Valley in, because you have to have capacity. And where we sit, that's the smartest thing, and that's what OEMs are really looking for. I know there's, you know, quality of device. Yeah, that's important, but you also have scale, and that's really very important. And speaking of which, I mean, if you look at all this capacity and plan that you have in mind, I mean, physically, how the ramp up phase is looking? You know, I mean, can you imagine, like, if you look two, three years, what the maximum you can, you know, grow your business and all, what's kind of the revenues that you are targeting from a capacity point of view? So from a capacity standpoint, let's talk about devices a little bit. You know, as I always say, all roads lead to Mohawk Valley, you know, for Wolfspeed. And the reason for that is today we have a very small fab in Durham, and that fab can do about $100 million a quarter, from a capacity standpoint for devices. So think about $400 million a year. And this is a, an older fab, you know, something that's building high quality MOSFETs right now, but really, smaller, from a scale perspective. Now what we're doing is we're ramping up Mohawk Valley. Mohawk Valley is a, a much bigger, automated, you know, fit-for-purpose silicon carbide, and the world's, maybe the world's only fully automated 200 millimeter fab. That will have $2 billion of revenue capability out in time. I think the way that'll ramp up for us is we're starting the early phases now, so $4 million of revenue came out of the fab just last quarter. This quarter, two through December quarter, we anticipate there being between $10-$15 million. Based on the work the team is doing in the fab right now, we have high confidence in that $10-$15 million. And based on the, you know, I talked about the substrate performance has been very good, coming out of Durham. We've seen great qualification work in the fab. It's really about throughput at this point. So that'll allow us to double that revenue as you look out into the March quarter and then, and then again out into the June quarter. So once we get outside of 2024, we'll start to see a bit of a steeper ramp into 2024 and 2025. And then I think once the JP comes online, you have a lot of substrate capacity that will be available to us. We should see an acceleration in the revenue up to capacity for that full $2.2 billion out of Mohawk Valley as you get out to, you know, the 2027+ timeframe. That's, that's great. Thank you. And maybe, you know, as you move to 200 millimeter, because it's gonna be a key change for the industry, you know, the industry has been- Yeah working on 200 millimeter for some time, and it will give you the first at it—first doing that will give great advantage, you know, in, in the industry. Can you remind us maybe what the cost advantage, you know, versus a 200 versus 150 you get, also taking into account the automation element, you know, to it that could be an extra. And more importantly, how do you want to price that? I mean, how do you want to go to market with that advantage? I mean, do you want to share the value to your customers, or you just, you know, say, "Okay, the price, I'm gonna keep it the same, but you will have just more volume and more capacity for it," so you take the full advantage, if you see what I mean? Yeah. So, on the first piece of that, from a cost perspective, the general math on a silicon carbide substrate moving from 150 millimeter to 200 millimeter is the same in silicon carbide as it is in silicon. It's a common yield. And generally, what that means is you have 70% more surface area, and with that 70% more surface area, you run it through the fab, and you get a 40% benefit on cost at the chip level. So at the die level, you get about a 40% advantage. Now, the other piece of that, you kind of mentioned that as well, we'll also get some nice efficiencies out of the fab. Our processing costs for a wafer in Durham is actually quite high. Now, it's a small subscale, you know, facility. High quality, but small and subscale, from that perspective. What we'll see as we move over to Mohawk Valley, we'll get the 200 millimeter benefit on the 40% cost advantage, but we'll also see processing cost capability and some other benefits as well. So I think if you look out in time, I think we've got a very good cost roadmap and very, very clear roadmap as to where we want to be out in time. From a pricing perspective, I would say, look, this industry is gonna be supply-demand disconnected from an automotive perspective, you know, probably between now and the end of the decade. Of course, you can go through an inventory cycle or two as you kind of make those ramps, but generally speaking, it should be supply-demand disconnected as you get out, you know, to the end of the decade. So I think from a pricing perspective, all of the competitors are competing for value, you know, just based on what their, you know, their capability is. Great. Thank you. And if I try to look a bit more long term, I mean, you usually have this capital market there, but can you remind us how you think you see the profitability going forward? You know, you talked about the revenues, but how you want to develop the profitability with all that in mind, pricing and value base? Yeah. So from a profitability perspective, you know, what we anticipate are a couple of different things. And I'll say it again, getting volume through Mohawk Valley Fab, and this is a brand-new automated you know, 200 millimeter fab, is very important. So what we'll see there is, we'll see some, you know, improvement from the margin structure as you get in and drive more volume. So as you see more volume come in, just in next year, we should start to see the margin advantages come with that as well. And we should start to see structural improvement. The fab currently is underutilized, so we're talking about 10% or 20% utilization right now, meaning we want to get up to 70%, 80%, 90%. We'll see that utilization charge start to go away. We'll see benefit at the die level from 200 millimeter, and then over time, we'll just see structural improvement on the margin perspective, as we, as we start to ramp the fab. And I, I kind of think of profitability, very much matching how the revenue ramp happens over time. Because the more volume we run through Mohawk, you know, the more profitability you'll get. And then, you know, from an OpEx and cash perspective, what that translates into is we should be running in the, you know, 20, low 20% OpEx, you know, at scale. And I think that creates a, you know, a very nice, you know, profitable cash flow generating business as you get out in time. Thank you. Maybe when you look at, you know, the substrate, you have aspirations also on the device side, you know, and more on the module side. What is the split today, you know, substrate device, and how you see it evolving based on your backlog? Because my understanding is you have a significant backlog and design wins that you need to deliver. How is it looking versus what you do today? Look, we've had over, you know, $22 billion of design wins just in the last three plus years. So significant. And that's just on power devices. So our focus really is to grow that. And I've just talked about the capacity statement. You know, the capacity we're talking about investing in is device capacity. So we'll see. So right now, if you looked at just, you know, just last quarter, we did a little over $100 billion of power device revenue, and we did, I think, $96-$97 million of material substrate revenue. The growth rate on devices will be much faster. And I think from a capacity perspective, we'll have, you know, $2.4 billion of revenue capacity that will be built in over time for devices. I think the growth rate for substrates will just be a lot, lot, lot more attenuated as we really focus our efforts on driving that device expansion. Thank you. One of the important debate as well is this vertical integration, right? I mean, you know, to link to what you talked about, but you see different strategies. You know, the market, you have the non-vertical part, which is basically on Infineon now, and you have all of the vertical integrated w hich is, I mean, ON and of course, ST as well. It looks like it's changing a bit over time. You know, when you look at the industry conversation, you know, vertical integration was like the must because substrate was a big issue. Yeah. You, you see less of a worry about this vertical integration right now than, I mean, than it used to be. Do you share that, you know, shift a bit in terms of market dynamic? I hear that conversation, but don't necessarily see the shift. The reason for that is, I think that there's a pretty big supply-demand disconnect right now on 150 millimeter silicon carbide substrates. The reason I say that is because last quarter, we've achieved record revenue on 150 millimeter substrates. The second piece of that is, a lot of the customers are working with an LTAs. They're coming back to us looking for, you know, additional agreements around on getting more 150 millimeter substrates as well. In fact, with Renesas came and did a large long-term agreement with us on substrates, and for the first, you know, four or five years, that will be primarily 150 millimeter substrates. And they did the, you know, a $2 billion customer reservation deposit to have access to that deal. So I'm seeing a lot of, not just in the short term, but in the ordering patterns of our customers, more and more requirement to secure substrates because of the concern that maybe those substrates won't be there. And I think that's one competitive advantage that we really have, is, I think a lot of people, if you look out in time, are looking for ways to secure silicon carbide capacity. Today, in Durham, we are, we are achieving high volume manufacturing at high quality, higher, higher quality in our 200 millimeter substrates and our 150 millimeter substrates right now. We are, we are achieving high volume manufacturing on 200 millimeter silicon carbide substrates. I think what that means is it gives us very high confidence in what we will be able to supply Mohawk Valley with down the line when we bring the JP, because we've got the recipe for how to deliver 200 millimeter substrates. So I think vertical integration right now, for us, is very important because we can look customers in the eye and say, "We have an absolute clear path to silicon carbide substrate capacity to fill our fabs, and ensure that they're going to have supply as you get out into the second half of the decade. And I think the other thing is, you know, Gregg said on the call a few weeks ago, you know, our plans have always been that everybody is gonna get to their, you know, target rate for vertical integration. And I think what Gregg now says is: Is everybody really gonna get there? And the answer is, probably not. So, you know, where we sit with Siler, you know, today, the opportunity, you know, we intend to take all the 200 out of Siler. But, you know, there is optionality for us. As the market n eeds more material, there are things that we can do. So I think that there's potentially upside on materials for us. It's gonna be just something to watch, François, as people continue with their own vertical integration effort. Great, thank you. And maybe, I mean, one of the reason of this kind of shift that people have in mind in terms of vertical integration is China. I mean, China is kind of the big topic for this year. I think is number two after AI, I would say, is China. And, and we see as well in the silicon carbide space, a lot of investment, a lot of different projects, I'm sure you see as well. And if I have to mention two tangible evidence that, we saw last, few quarters is, Infineon partnering with SICC and TanKeBlue. You saw the JV, STM is doing a JV with Sanan in for in China. Right I mean, and even ON, I mean, we saw is much more open to the idea of using Chinese. We have always a debate of quality, but, you know, quality or not, they seem to make some, you know, market share again here. And obviously, they sell at much lower price than the market rate, from what we understand. So how do you just see China, you know, coming to market here and trying to disrupt kind of the economics almost, and how do you plan to compete with them? I don't necessarily see it. From our perspective, it doesn't really change the economics. I think we've got very high quality, you know, substrates from an automotive perspective. So when customers look at that, they know we have a lot of experience, you know, 30+ years of experience in doing this, and they can count on what we're seeing, but or what we're doing. But remember, again, we've had record output on the 150 millimeter substrate revenue this last quarter. We are seeing, despite you saying that, and we're hearing a lot of this as well about China, we are seeing customers come back and look for more deals on 150 millimeter substrates as well, as well as Renesas getting into that. The last piece of that is, that from our checks, you know, from a 150 millimeter standpoint, what's coming out of China and other places really isn't ready for automotive yet, let alone looking at 200 millimeters. I think that's probably a bit of a ways off. Now, that being said, going back to Tyler's point, it's not that we're, you know, unaware of this. Of course, over time, there's going to be a lot of investment. Chinese and other people will look to, and other competitors, will look to try and be able to do this. It's probably gonna be harder than they think. Some of them may succeed some of them won't. Our business plan has always been, we'll take them at their word, and we believe that may happen. You know, for us, what's important is having vertically integrated 200 millimeter will always give us an advantage. If we can fill our fab, you know, faster than, you know, you know, than the rest of the industry, then I think we'll be in great shape from a growth perspective and from a delivery perspective to our customers. Thank you. Another debate is on the technology front. I mean, you have these trench and planar as well. There is always two camps, I mean, where it seems that for any kind of things, but the trench and planar also is part of the strategy to go to market for some companies and you. So you are in the planar camp more, it seems, with like, you know, STM, and you have the trench camp, which is Rohm and Infineon, ON in between the middle, but not so sure. What's your view here on the—do you think, like, what is your roadmap, basically, from a technology point of view? Is it planar enough still, you know, the way to go in terms of generation? Is trench, you know, a key differentiator, you think, in the going forward? I would say this is a debate I hear about from, you know, from time to time. And, you know, what I go back to is, from a customer perspective, what do they, what do they really care about? They care about several different things. They care about quality of the device, performance of the device, pricing, capacity, you know, the mosaic of different things that a customer's gonna look at. From a planar or trench perspective, I don't. They generally, in my opinion, the customers I meet with, they don't really care. What they care about is performance. And I would say from a performance perspective, you know, Wolfspeed has always been very high on the list in terms of device capability. The reason for that is we issued the first, the very first silicon carbide MOSFET, I think, back in 2012. So we have a deep legacy and experience, not just on the material side, but also in doing devices for a long period of time. So we have a lot of expertise in this. Where we're really focused now is developing our muscle around volume. So I don't think it's so much about planar or trench. We do have a planar MOSFET right now. People look at the silicon roadmap from power devices on planar and trench, and eventually you could probably get to a smaller device by using a trench architecture, you know, down the line. We could elect to do that too, and have that, you know, could have that on our roadmap. But it's really about driving performance in the roadmap over time and having a really capable, you know, product for customers. That's why we're winning today. I mean, I think if you look at most of the deals we get into, we're normally one or number one or number two in terms of capability when we go out for a bid, and that's really one of the reasons we continue to win, you know, a lot of business. Great. Thank you, Neil. I have a question from the room, and I'm gonna read out loud, no filters. What is the status of the Siler fab, and what guideposts should we think of for this opportunity as time goes on? First and foremost, let me just say, our I don't want to say sole focus, but just about sole focus right now is driving Mohawk Valley to 20% utilization and getting the Siler City, the JP facility, online and running. I started out with that today because those two things are very, very important to us. From an additional fab perspective, we haven't received any funding, a notification on that. We're waiting to hear about that. When we start hearing about the funding and we get the 20% utilization at Mohawk Valley, we can start thinking about, you know, what comes after that. Okay, thank you. One thing I have often as well is the GaN, you know, gallium nitride. So it seems that also, you know, the technology that is gaining some traction. You see some investment, M&A, again, and also as to compare with the peers in GaN Systems and and, you know, Power Integrations. I see you talk a lot about GaN. And it seems like the onboard charger and, you know, data center seems to be, like, maybe the main application where silicon carbide can be used and GaN can be adopted over time. How do you see, you know, this, you know, mix between, you know, GaN and s ilicon carbide over time? And do you see it as a threat, you know, for silicon carbide as such? When we talk about the silicon carbide market, you know, as you get out to 2030, the TAM being north of $20 billion as you get it out to the end of the decade, the vast majority of that is automotive demand. And inside that automotive demand, if you look at the automotive opportunity and you look at a vehicle, 85%-90% of that opportunity is in the drivetrain. And in just, I won't say every deal, but I—I don't see every one of them, but in every deal I see, in the last, you know, few years, it's really comes down to silicon carbide winning in the drivetrain. We just don't see anything else. That being said, I think onboard charging, as you said, DC to DC conversion, it sounds like GaN may have some nice opportunities there. But generally speaking, you know, from our perspective, is that as you get to 650 volts and above, silicon carbide continues to have really strong performance in that type of power zone or in that type of voltage zone. So as you get into that level, the drivetrain makes perfect sense. If you start getting into some of these crossover areas, you do start seeing things like GaN, you know, coming in and making a play in those spots in the marketplace. But that's just natural. It's an area where we do see it in some of those areas, and it's, you know, I think it's a good technology for those maybe mid to lower, you know, voltage categories. Is that something you would like to increase investment over time, like, to that even more GaN? No, I think we're very much focused on silicon carbide right now. You know, I think we've got our plates full with, you know, bringing up a new fab and bringing up brand-new, first-of-a-kind, 200 millimeter substrates, and building out, you know, the world's largest silicon carbide substrate facility for 200 millimeter at the JP in Siler City, North Carolina. So I think our real focus is driving that organic plan we have laid out, and we're making good progress on it. So I think that's what we'll continue to focus on. Great, thank you. Another question I have often is on the, Smart Cut or laser, like split technology. I don't know if you, if it's something that you consider as well, but I'm talking about that because it, it could have important application for the sector as a whole. You know, where the- you would increase the output you know, significantly in one go. Is it something that you are considering as well, adopting within your process, you know, like, split, you know, technologies at all? Or is it something that you don't think is valuable for now because of what the CapEx are making and all? Well, look, first of all, you know, I was actually at a conference recently in Europe, and a speaker before me was up at the screen, and I realized, and there were several of them, they were all talking about various silicon carbide projects that they're, you know, that they were working on.... And I was the next speaker that was out there, and he gets up there, and he's talking about several times about how hard it is to do, you know, to make silicon carbide, how hard it is to work with. So why I'm saying that is, I think it's going to attract a lot of investment, a lot of new ideas. I think that's one of them that I've heard about. But the other side of it, the flip side of that is, and one of the reasons we're known for our secrecy in this, because we've been doing it for a long time, is we have our own internal roadmaps around some of these opportunities. It's not that we don't look at that or respect it, or I'm sure it's a, you know, a good technology, but I also think we have a roadmap that we have internally that we're looking at to leverage our experience of working with silicon carbide and looking at different ways to drive down costs, to create efficiencies, to improve yields, and really work with the technology. So we have a number of programs and things that we're working on to try and drive that efficiency over time. Thank you. In terms of fab location, I mean, I think it's kind of a strategic and geopolitics nowadays, very, as well important, you know, where you want to put your fabs. That's right How do you think, you know, about putting a fab, you know, in the U.S. or Germany versus, like, Malaysia, for example, that, you know, the costs could be, you know, much lower for a, you know, given the, you know, location? How do you think about the economics behind - because you're in a location that you do it, that geopolitics. You know, economically, it's gonna be difficult to compete. Is it like you have to rely on subsidies somehow? And maybe can you remind us so that, you know, any subsidies that you plan maybe to capture with this investment? Because silicon carbide is one of the priorities. I think that's number one. You know, I think that, you know, we're ramping pretty capital-intensive business. And what's very important for us is ensuring we get the right level of funding. We talked about it earlier. You know, we're very engaged, and Tyler can probably talk to you a little bit on the CHIPS Act. We've been engaged in that process for quite some time. So I think for us, there's a lot of good reasons from geographical disparity, being closer to customers. There's a lot of good reasons. But for us, number one is ensuring that we've got the right financial profile and the right investment profile from a, not just from a build out the fab, what does it look like over the long term, and then netting out any potential, you know, incentives. We are making good progress on the incentives. Yeah, no, I think, you know, we've had some very constructive dialogue with Commerce and Treasury and the CHIPS Program Office. And I think the other thing that they really have started to appreciate is, you know, there's a beachhead to be protected here on silicon carbide in the United States. So, you know, for silicon carbide to be designated as a critical mineral by the U.S. Geological Survey, I think speaks to the level of attention that it's now getting. And so, you know, there's CHIPS Act funding, there's the Inflation Reduction Act, the Income Tax Act, and there's lots of avenues of funding from the U.S. perspective. And, you know, we should know more about that sometime next year, which will then, you know, factor into our fab strategy and our build-out strategy as it relates to Siler. Thank you. Then what does it mean in terms of, you know, if you look at or try to wrap up all of this, you know, you have a clear revenues capacity, also strong CapEx funding. How should we think about the free cash flow of Wolfspeed, you know, in the next few years, you know, and the return to shareholders, how you think about that, you know, going over time as you grow and you mature? Yeah. So, you know, I think if you take a look back at our business plan and you start to look out into the future, I think what's, you know, really important, number one, is that we drive our capacity through Mohawk Valley, as I talked about. And as we start to do that, what we'll see is... And by the way, we did this when we first built Mohawk Valley. When we built Mohawk Valley, this is a gross $2 billion fab to build. We got $500 million in incentives from the State of New York, and so it was less than, I think, $1.5 billion net out of our pocket to build a fab that can generate north of $2 billion a year. So that's a terrific, you know, setup, first of all. So we're modeling it after that, but the way that works is you've got to fund it yourself, to get things off the ground. As you put these assets into service, you start getting reimbursements, either from the, from the government, in this case, it was New York, and that worked out very well for us. We funded the fab, we built it, and then we got incentives, over time. I expect our business plan to very much model that, just at a different scale. So I think this year, from a CapEx perspective, this will be kind of our peak year of approximately $2 billion of CapEx. Probably see a modest step down as you get into our fiscal 2025, which starts after June next year. As you start to see that ramp down, we'll start to see assets come into service. Less facilities being built, more tools, revenue-generating tools being added to these buildings. As we start to see those tools add and start to see that revenue come in, which then as you get out into time, as Tyler talked about, you'll start to see some of these reimbursements come in. So the CapEx then will start coming down more, more steeply. Our goal then would be to drive towards operating cash flow positive as you get into the back half of fiscal 2025. As we start to see these government incentives come in, there should be a steeper drop-off in the CapEx, and then free cash flow positive as you get out into that kind of 2026, you know, kind of plus, you know, timeframe, modeling what we had done with the State of New York and Mohawk Valley from an incentives perspective. Perfect. Thank you. We're running out of time now. Perfect timing. Thank you all for listening, and thank you, Neil and Tyler. Thank you. Thank you. Appreciate it.