Thank you for joining the Wolfspeed Q4 Fiscal 2023 Results Call. I'd now like to turn the call over to Tyler Gronbach, VP of External Affairs with Wolfspeed. Thank you, operator. Good afternoon, everyone. Welcome to Wolfspeed's fourth quarter fiscal 2023 conference call. Today, Wolfspeed CEO, Gregg Lowe, and Wolfspeed CFO, Neill Reynolds, will report on the results for the fourth quarter and full year of fiscal year 2023. Please note that we will be presenting non-GAAP financial results during today's call, which we believe provides useful information to our investors. Non-GAAP results are not in accordance with GAAP and may not be comparable to non-GAAP information provided by other companies. Non-GAAP information should be considered a supplement to, and not a substitute for, financial statements prepared in accordance with GAAP. A reconciliation to the most directly comparable GAAP measures is in our press release and posted in the investor relations section of our website, along with a historical summary of other key metrics. Today's discussion includes forward-looking statements about our business outlook, and we may make other forward-looking statements during the call. Such forward-looking statements are subject to numerous risks and uncertainties. Our press release today and the SEC filings noted in the release mention important factors that could cause actual results to differ materially. During the Q&A session, we would ask that you limit yourself to one question and one follow-up, so that we can accommodate as many questions as possible during today's call. If you have any additional questions, please feel free to contact us after the call. Now I'll turn the call over to Gregg. Thanks, Tyler. Good afternoon, everyone. As we close out fiscal 2023, we look back having made significant strides across all areas of our business. Our Mohawk Valley Fab, which is the world's largest fully automated 200mm silicon carbide Fab, began shipping product and contributing revenue. Last October, we outlined our plans to construct the world's largest state-of-the-art greenfield silicon carbide footprint. Since then, we've secured $5 billion of the capital necessary to achieve these goals, allowing us to finish out the fit-out of Mohawk Valley, expand our materials capacity at Durham, and break ground on the world's largest 200mm silicon carbide materials facility, the JP, in Siler City, North Carolina. Finally, we have made great strides in diversifying our device customer base across the automotive, industrial, and energy sectors, with flagship agreements with key OEMs and Tier 1s, including Jaguar Land Rover, Mercedes, BorgWarner, and ZF. We are also continuing to see growth in the traditional industrial and energy segments as customers make the transition to silicon carbide. We are seeing many opportunities in solar and energy systems, motor drives, UPS, heat pumps, air conditioning, and many more. The growth in these segments is primarily driven by the need for higher energy efficiency. In addition, emerging industrial applications such as e-mobility, electric vertical takeoff and landing aircraft, are also integrating Wolfspeed silicon carbide within their initial designs to reduce system weight and improve range. From a materials perspective, we were very pleased to secure a long-term wafer supply agreement with Renesas Electronics Corporation. Widely recognized as a leader in automotive semiconductor devices, Renesas also understands the importance of having access to silicon carbide technology and have signed a 10-year wafer supply agreement with Wolfspeed. The agreement includes a $2 billion customer deposit, which is one of the largest deposits I have ever seen in my 30-plus years in semiconductors. This will secure a capacity corridor as they begin to ramp silicon carbide device production beginning in 2025. While this agreement is also expected to provide a significant revenue stream over the next decade, it has an even greater significance for the power semiconductor landscape. Securing this key customer was possible because of our forward-thinking investments in material capacity at the Durham campus and with the construction of the JP. We will be uniquely positioned to drive the industry transition from 150mm to 200mm silicon carbide wafers, which will help address some of the supply-demand mismatch which currently exists today, and potentially open up new markets for silicon carbide applications in the industrial and energy sectors. From a materials perspective, construction at the JP is well underway. Fully built out, the JP will add 10 times more capacity compared to our current operations in Durham, significantly increasing the world's total supply of silicon carbide materials. The building foundation is in place, and we've now started construction on the shell of the building. We remain on track to begin producing wafers at the site in the second half of calendar 2024. As far as our more immediate strategy to increase 200mm materials production at Building Ten on our Durham campus, we have now installed more than 75% of the crystal growers in that facility.... They are currently growing crystals, and we've been very pleased with the yields thus far. As it relates to Mohawk Valley and our device business, we have continued our ramp-up efforts and recorded approximately $1 million in device revenue out of the fab in fiscal Q4. silicon carbide is a complex technology that's very difficult to master, and I'm proud of how our team has worked tirelessly to get us ramping device production in a brand-new, highly automated fab. We still have some work to do at Mohawk Valley as we scale device production and expect a modest increase in device revenues in the first half of fiscal 2024, with a steeper increase in revenue beginning in the second half of 2024. From a device perspective, we are seeing continued strength across our end markets, and we secured approximately $1.6 billion in design wins for fiscal Q4. For fiscal 2023, design wins totaled approximately $8.3 billion, and the cumulative total now stands in excess of $19 billion secured in the last four years. Our customer wins to date give us the confidence in the growth of our addressable market and our ability to capture a meaningful share of the device market between now and the end of the decade. More than anything, we're proud of our role in building greater awareness for silicon carbide. At the same time, the world is realizing the importance of the global semiconductor industry. The secular trends that are driving the adoption of silicon carbide have started to receive widespread public recognition as a truly game-changing technology in the power semiconductor space. I'll now turn it over to Neill, who will provide an overview of our financial results and outlook. Neill? Thank you, Greg, good afternoon, everyone. Before I discuss the details of our fourth quarter results and outlook for fiscal Q1, I would like to take a moment to outline a couple of changes we are making to the presentation of our financial results. Over the last several years, we have presented pre-production costs, primarily at Mohawk Valley, as factory startup costs, which totaled $160.2 million in fiscal year 2023, and we have reported these costs as part of other operating expense on the income statement. At each earnings call, we have given an update and outlook for these costs and excluded startup costs from our non-GAAP results. Going forward, we will not exclude these costs from our non-GAAP results and forecasts, but will identify them in our commentary and in the footnotes to our financial statements and filings. As we transition Mohawk Valley from pre-production to an active production facility in the first quarter of fiscal 2024, these costs will be categorized as underutilization costs and will be part of cost of goods sold. We will no longer exclude startup or underutilization costs from our non-GAAP results. This does not change our long-term outlook for free cash flow generation and corporate non-GAAP gross margins greater than 50%, as we believe that our 200mm silicon carbide technology at scale will provide capacity and cost competitiveness to achieve these profitability levels. As you recall, for the fourth quarter, we were targeting revenue in the range of $212 million-$232 million, non-GAAP gross margin in the range of 29%-31%, and a non-GAAP net loss between $21 million and $29 million, or a loss of $0.17 per diluted share to $0.23 per diluted share. Against that guidance, our fourth quarter revenue was $235.8 million, non-GAAP gross margins of 29%, and a loss of $0.42 per diluted share, which included $39.5 million of startup costs, or $0.26 per share, primarily related to Mohawk Valley and includes early-phase startup costs related to our materials expansion, primarily for the JP Materials facility in Siler City, North Carolina. In our fiscal Q1 2024 outlook, issued in our press release earlier today, we estimate OpEx to be approximately $120 million, which includes about $8 million of startup costs related to our materials expansion efforts. Going forward, in our earnings release today and the Form 10-K we will file later this week, startup costs will now be shown as a separate line item on our quarterly income statement. I will go further into the quarter-over-quarter operating expense changes in a moment. In fiscal Q1, as Mohawk Valley continues to ramp production, we expect gross margin at the midpoint of the range to be approximately 14%, which includes about $37 million of underutilization costs, representing approximately -16% or 1,600 basis points of gross margin. We are making these changes in our presentation to align with the Securities and Exchange Commission, which has clarified its guidance related to non-GAAP measures for public companies. I also want to mention one last change moving forward. As you will see in our 10-K when we file it later this week, we have included a breakout of our revenue by each of our three product lines: power products, RF products, and materials products. In future quarters, you will see this breakout in our earnings release and Form 10-Qs as well. Let me provide more details of the fourth quarter results. As I mentioned above, we closed the year on a strong note, generating revenue of $235.8 million in the fiscal fourth quarter of 2023, which represents a 3% sequential increase when compared to the previous quarter and growth of approximately 3% year-over-year. This outperformance compared to our guidance is primarily due to favorable timing related to product shipments out of our Durham production facilities. While we will see some variation in our production out of Durham, as I said last quarter, incremental contribution from Mohawk Valley is a primary governor of future revenue growth. As Gregg mentioned, we recognized $1 million in revenue from Mohawk Valley, while we are still aligned on previous expectations that we will reach 20% utilization out of Mohawk Valley by the end of fiscal 2024. It is important to note that it will be the second half of the calendar year, 2024, before we see $100 million of quarterly revenue from the fab that the 20% utilization would represent. This accounts for the time between fab starts and shipments to our customers. Moving down the income statement, non-GAAP gross margin in the fourth quarter was 29%, compared to 32.3% last quarter and 36.5% in the prior year period, representing a 330 basis point decrease compared to last quarter. Gross margin was impacted by higher costs and heavier automotive mix for customers that were initially slated to be produced out of Mohawk Valley. As we ship the higher levels of production out of Mohawk Valley, we anticipate future improvements in gross margin. We generated adjusted loss per share of $0.42 in the fiscal fourth quarter, compared to a loss of $0.40 last quarter and a loss of $0.21 in the same period last year. As I mentioned above, loss per share in the current period was impacted by $39.5 million of startup costs related primarily to Mohawk Valley, or $0.26 per share. Before moving to the full year results, I will provide a quick update on our financing initiatives. Less than a year ago, we laid out a $6.5 billion capital expansion plan and its associated financing strategy. We said we would execute a flexible, low dilution financing plan that would be balanced across four pillars, including public, private, customer, and government funding. Since that update, we have raised low dilution capital across all four of those pillars, securing approximately $5 billion in the last 9 months, and have now fortified our balance sheet to build out the leading silicon carbide manufacturing footprint in the industry. Moving forward, we will continue to evaluate all avenues as it relates to our capital structure and remain nimble on future financing as opportunities present themselves. However, securing financing is not our primary objective at this time. Moving on to the full year results for fiscal 2023, revenue was $922 million, representing a 24% increase when compared to fiscal 2022 due to the strength in both materials and power product lines. Non-GAAP net loss was negative $180.7 million, or negative $1.45 per diluted share. Non-GAAP net loss excludes $149.2 million of adjustments, net of tax, or $1.20 per diluted share. Touching on our balance sheet, we ended the quarter with approximately $3 billion of cash and liquidity on hand to support our growth plans. DSO was 47 days, while inventory days on hand was 172 days. Free cash flow during the quarter was -$455 million, comprised of -$52 million of operating cash flow and $403 million of capital expenditures. Moving to our first quarter outlook, we are targeting revenue in the range of $220 million-$240 million. As we said last quarter, power device revenue capacity from our Durham fab is forecasted to be approximately $100 million per quarter, and that is subject to some variability, positive or negative, which we benefited from positively in the 4th quarter. This does not change our view on the factory's revenue-generating capability, and in fiscal Q1 and beyond, we will continue to forecast power device revenue capacity out of Durham at approximately $100 million per quarter. While this will be a modest headwind as we transition from fiscal Q4, 2023 to fiscal Q1, 2024, it continues to be in line with our forecast. As we've said in the past, the main driver of future revenue growth for power devices will be the incremental revenue contribution from Mohawk Valley. We are also expecting gross margin in the range of 10%-18%, with a midpoint of 14%. At the midpoint, this includes approximately $37 million or -1,600 basis points of underutilization costs as we ramp up revenue at Mohawk Valley. We expect underlying gross margin performance, excluding underutilization, to improve modestly in the quarter as we continue to serve more automotive customer mix out of the Durham fab. We are also targeting non-GAAP operating expenses of approximately $120 million for the first quarter of fiscal 2024, which is inclusive of $8 million of startup costs related to our materials expansion, primarily related to the JP Materials facility in Siler City, North Carolina. Excluding startup costs, OpEx increases quarter-over-quarter are driven by higher employee-related expenses as we move into the new fiscal year. We expect Q1 net non-operating expense of approximately $22 million, which includes the impacts from $55 million of interest expense, inclusive of the recently completed Apollo term loan and interest charges in connection with our Renesas customer reservation deposit. We expect non-operating expense to increase as the year progresses, as we earn less interest income on our short-term investments, as we use that cash to invest in our facilities expansion. We expect Q1 non-GAAP net loss to be between $94 million and $75 million. As always, our Q1 targets are based on several factors that affect them significantly, including supply chain dynamics, overall demand, product mix, factory productivity, and the competitive environment. ... lastly, we expect capital expenditures to be approximately $2 billion for fiscal 2024, and continue to expect fiscal year 2024 revenue to be in the range of $1 billion-$1.1 billion. With that, I'll pass it back to Gregg. Thanks, Neilll. The adoption of silicon carbide is driving the need for more capacity, and we are seeing continuous upward pressure on the demand for both devices and materials. The EV revolution continues to be the driving force of adoption, with recent developments further bolstering the EV landscape. Just recently, a consortium of OEMs, including BMW, General Motors, Honda, Hyundai, and Mercedes, announced their intention to create a new high-power charging network with at least 30,000 chargers in North America to meet the growing demand to charge electric vehicles. The explosive growth in EV production is just the start as the world continues to embrace more energy-efficient technology. As we close out this year and turn to fiscal 2024, we are better positioned strategically, financially, and operationally. Wolfspeed wins this generational opportunity because we are vertically integrated, investing in purpose-built facilities, and focused on doing so with 200 millimeter silicon carbide substrates. This is validated by Apollo, a global investment firm that saw an opportunity to assist us with our capital requirements, and Renesas, who made a decisive commitment to next generation silicon carbide technology and intends to do so at 200 millimeter. In closing, I'd like to thank all of our stakeholders for your continued support, and I'm excited for what's ahead. I'll now turn it over to the operator, and we'll take any questions you may have. If you'd like to ask a question, please press Star followed by one on your telephone keypad. If for any reason you'd like to remove that question, please press Star followed by two. Again, to ask a question, it is Star one. Our first question is from Harsh Kumar with Piper Sandler. Your line is now open. Yeah. Hey, Gregg, thank you for letting me ask the question. Gregg, I've got one for you. It's pretty clear that your future growth of the company lies with Mohawk Valley. Maybe you could talk about what you want to see happen in that fab to ramp that facility. You did $1 million, I think you were pretty clear in the call. You did $1 million last quarter, but you're talking about $100 million achievement in the second half of 2024. Would that be towards the beginning of second half or towards the end of-- In, in other words, are we talking March or are we talking the June quarter for, for you to get to $100 million? More importantly, what do you need to see at the fab to get to that kind of a number? Thank you. Yeah, thanks a lot, Harsh. Couple of things. First off, in ramping that fab, we obviously have to ramp the materials flowing into that fab. I'll give you a brief update on that. The 200mm crystal growth operation in Building 10 is well on its way in producing excellent quality material, which is translating into very nice, very excellent defect density wafers. epi at 200mm is also excellent, we are ramping that as we speak, and now we're obviously shipping product from the Mohawk Valley Fab. We have three products that are currently fully qualified in 200mm at the Mohawk Valley Fab, and we have 8 additional products that have now passed all reliability testing and are working through the final end of qualification for that. That's all in really great shape. As we ramp the fab, obviously $1 million of revenue in a fab that's capable of $2 billion is kind of early innings of ramping. As we ramp the fab, we'll be dialing in the processes and dialing in the equipment, which will take our yields up to entitlement yield. As we ramp the fab, that will absolutely be happening. What I would say is, the fact that we're, we're ramping a new, 200mm crystal, the fact that the crystal quality is excellent and the, and the quality of defectivity on the wafers is excellent, combine that with epi in, you know, really good shape from a process standpoint, and we've got a fab that has three qualified devices this early and 8 that have passed reliability, gives me great confidence that we're gonna be that this fab is gonna deliver, and the entire supply chain is gonna deliver everything that we expected out of this. In terms of the ramp of, of the production and the expectation for the amount of, revenue, our expectation is that we'll be at 20% utilization by the June quarter, and I'll let Neilll translate that into what you can expect out of, revenue. Yeah, just remember, Harsh, as you think about utilization, the time frame from the time you actually load the fab wafers into the fab from a utilization perspective, until you, you know, produce the wafers, put them through the back end, and finally ship them to customer. Somewhat of a delay you'd expect from the time to reach utilization level. As we get to 20% towards the end of the year, you wouldn't expect to see the revenue translation of that. That's, you know, we get a 20% utilization, say, by the June quarter, you wouldn't expect a revenue translation of the equivalent of $100 million to be sometime after that, sometime in the second, in the second half of calendar 2024. First half of calendar, sorry, fiscal 2025. ... as you think about that time frame. The timing of the revenue ramp at the fab is we did about $1 million or so last quarter. We'll see a bit of a tick-up here in Q1, a modest pick-up, I think, again in Q2, and then a steeper ramp as you get into the back half of the fiscal year into the March and June quarter, and then we should be on our way from there. Wonderful, guys. Very helpful. For my follow-up, there were customers that were expecting to get product off of Mohawk Valley by now. I know, I know that was part of the original plan. I guess my, my question to you is, how are you managing those expectations for those customers, and how important is that commitment to the customer for you guys? More importantly, how are you balancing that, the supply-demand game, in the near term as you ramp Mohawk Valley? Yeah, thanks for that question. You know, obviously, near term, it, it creates an impact, you know, with the delay of the, the ramp of Mohawk Valley. We're doing a couple of things. First off, you're seeing more automotive, shipping out of Durham, obviously, we shifted that mix to Durham. We're obviously engaging with customers and being transparent as to what the expectations are, and we've realigned those expectations, to be in, in, in concert with how we expect to, to ramp the Mohawk Valley. We're engaged with them on an ongoing basis, and in some cases, that's weekly, and in some cases, that's nearly daily. There's a lot of, you know, communication going back, back and forth. Many of them have, come to Mohawk Valley, and they remain very encouraged about the scale of production that we've got coming online. They obviously love it to come online faster, they really can't see this level of, of capacity coming online anywhere else. Then you combine that with what we've got going on and what we've been able to execute in Building 10 and what we've got going on with the JP. We've had several customers out at that, it's just an enormous site. The fact that we're now going vertical, and we're intending to be producing product in there, around this time next year, actually, a little bit earlier than that, this time next year, it gives some encouragement for the, you know, that, that the capacity is, is actually coming. Also to add to that, Harsh, I think customers have taken notice that we've done a, you know, a very good job just on the financing element here and creating our giving ourselves the ability, you know, to fund a very significant capacity expansion. When they look forward and see what the opportunity is based on the manufacturing footprint that we're building out and we're funded to build out, you know, it gives us a, you know, it gives them a, you know, something to look at look forward to in terms of our capability to deliver parts out into the future. Thanks, guys. Thank you so much for the clarity. Appreciate it. Sure. Our next question is from Jed Dorsheimer with William Blair. Your line is now open. Hi, thanks, and thanks for taking my questions. Just for my first question, I guess, and I don't know if Neilll or Greg, you want to address this, but, the change in accounting banks, you know, why now? You've spent the past year defending, you know, the underutilization, and first quarter, that you're out of the gate, you're changing that. What, what caused that change? You know, that... Was this driven by your auditors seeing something in the business? Or, or, you know, maybe some color around that would be helpful, and I do have a follow-up. Yeah, sure, Jed. I think, first of all, this is a presentation change only. This doesn't change our business plan or our long-term outlook. You know, we're driving greater than 50%, you know, gross margin. It's, it's a, a presentation change in terms of how we wanna, you know, talk about the financials on a quarterly basis. A couple of things drove that in terms from a timing perspective. I think as we said in the prepared remarks, you know, we updated our presentation of our results, really just to adhere to updated guidance from the SEC. Also, if you think about Mohawk Valley, that's now transitioning from a pre-production facility to a full production facility, utilization of the fab will start to play a much bigger role in our margin trajectory going forward. Putting those pieces together, along with the fact that we're moving into a new fiscal year, just made this kind of the right time to make that transition. Just to, to be clear, though, was this your decision to change the presentation? You know, I'm gonna be getting asked these questions. What drove this? Was it SEC that you couldn't do the underutilization? That's what I'm getting at. Yeah. There was updated guidance from the SEC, and we've had correspondence with them. Upon completion of that, we decided to make the update to the, to the, presentations. Got it. Thank you. I guess, just follow up, and, and there were a bunch of different numbers, so forgive me, as, you know, if you can help stitch these together for me. I, I heard, and if it's true, congratulations, that 75% of the growers in Building Ten are operational. Is, is that correct? The reason I'm asking that is, is, you know, if could you help me better understand the sequential guide down in revenues while, you know, you're, you're producing more materials to load Mohawk Valley? How should I think about that and, and then the, the 6 months push out in the, in the 20% utilization? From a 20% utilization perspective, I think we're in line with what we thought. We, we would get to 20% by the end of the fiscal year, so I think that's all in line. As we bring up the. Oh, so it... I'm sorry. I thought you said calendar year on the call. It is fiscal year 2024 for the 20%. Fiscal, yeah. so yeah- Okay so no change to the outlook in terms of the timing of bringing the fab, bringing the, the fab up online, up to 20%. We're anticipating getting to 20% utilization by the end of this fiscal year. We continue to see good, you know, positive momentum in crystal growth here in the Durham campus. Out of Building Ten, we're turning on additional crystal growers. We're seeing, you know, positive signs from the yields and the outputs that we're seeing from that. All. You know, that's, that's in pretty good shape. Now it's a matter of bringing the, you know, capacity from a substrate perspective up to the fab and beginning the, you know, the process of, you know, bringing up the yields to entitlement, as Greg mentioned. You know, you know, tweaking the tools and tuning things in, and that's really what we're working on right now, is bringing that back to capacity. What that means from a revenue perspective is we'll see a bit of a tick-up here in Q1 in revenue. We'll see again, some tick-up in Q2, but as we drive those wafers through the fab, we'll also see a more, you know, dramatic tick-up in the revenue to get the back half of the year, fiscal year. Neillll, if that's ticking up though, what's dropping off? Jed, there's two pieces here. From a, from a Q1 perspective, we saw better performance out of the Durham campus, both, I think, in power devices out of Durham and in- Yep ... materials as well. It was just better performance in the quarter. What we will do is, we will forecast that back to the mean, so to speak. Durham will have some good, good quarters and good performance, there will be a plus or a minus. We saw a positive performance last quarter that will be a bit of a headwind, as we move into Q1, that will come back to kind of the mean. That is what we have always kind of forecasted and how we have looked at Durham. You know, it is an older campus, an older facility, there is going to be some variation there. It requires maintenance from time to time. We'll, we'll forecast Durham just kind of back to what we've always kind of historically talked about, like, you know, $100 million or so a quarter for power devices. You know, we were ahead of that last quarter, and this quarter we'll just kind of forecast back to that kind of normal mean. In the meantime, then, as you look out into the future, you know, any substantial growth from a revenue perspective really comes from, you know, from Mohawk Valley. Got it. Thank you. I'll jump back in the queue. Our next question is from Brian Lee with Goldman Sachs. Your line is now open. Hey, Greg. Hey, Neillll. Thanks for taking the questions. This is Grace on for Brian. I guess, my first question, maybe this is more for you, Neillll. Just trying to understand the cadence of these startup and underutilization costs moving through 2024 as you continue to ramp Mohawk Valley and build silicon carbide fab. When can we see those costs coming down, and how quickly? Can they ever go to zero? Thanks. Yes, they, they- they'll eventually go to 0. Once you get the utilization up to, you know, north of, say, 70% or so, you'll see that there won't be underutilization at that point. That's kind of the marker we use, so to speak. I think it is important that I unpack maybe the gross margins a bit to kind of explain these different, these different pieces. If you look at the midpoint of what we just guided, with these presentation changes, gross margin is gonna be at, at about 14%, at the midpoint. As I, as I said in the prepared remarks, that's about six-- negative 16 points of impact from underutilization, which represents about $37 million of impact. As you look forward, gross margin expansion is gonna be driven really by, you know, 2 things. First, as we start driving higher levels of utilization in the fab, and at 20% utilization, as you look out to the end of the fiscal year, we'll see that $37 million of underutilization get down to the low 30s, just as we drive more revenue, you know, through the business. That'll be a significant positive. Based on the new presentation, utilization will actually be the largest impact on gross margin, as we start to move forward. Now, there's a second piece to that as well. Underlying performance, excluding utilization, should improve modestly as well. As we drive more of the business through Mohawk Valley, we'll start to see the benefits of those 200mm substrates, and we'll start to see that margin expand as well. Overall, we expect, you know, as you take a look into both of these areas or these two areas, we would expect to get, you know, on a new presentation basis, to the low to mid-20s from a gross margin perspective, as you look at the new PNL, into the out into the end of the fiscal year. Great, that's super helpful. My second question, just to follow up to the previous question on the ramp of the Mohawk Valley fab. Now you got, like, all the financing overhang out the way, is there any ability to pull forward the Mohawk Valley ramp? Why or why not? Thanks. Look, I think from a Mohawk Valley perspective, as we look across our business, we have, you know, a couple of focuses right now, and really what that is, is drive Mohawk Valley to 20% utilization and build out the JP. I think, you know, like, you know, if you look across our business today, and you look at our employees and our resources, that is those are our two main focuses. We're bringing everything we can to the table every day to be focused on that and drive that as fast as we can, and that's what you've got. That's what you see here in the outlook today. Okay, thank you. I'll take the rest off line. Thank you. Our next question is from Edward Snyder with Charter Equity Research. Your line is now open. Thank you. Charter Equity Research, give it away. Guys, Neilll, I wanna come back to Jed's question here, and I'm, I'm kind of confused, to be frank. We spent most of last year with all the operational problems, talking about the ramp of Mohawk Valley and how your targets were for yields and margins, and how you would pro forma out those numbers so we could get a good glimpse of if it was living up to expectations or not. It sounds like, based on your answer, what Jed said, you were not forced to make this decision by SEC. Correct me if I'm wrong. Did the SEC tell you you had to do this? If they didn't tell you to do this, why, in the very first quarter we do this, would you now mix it up so that your, your public your public report looks just terrible, right? I mean, and I get that you're printing it in the document, but to be frank, to be frank, as we've talked about before. Four quarters in a row of, of significant disappointments to what expectations have been, have not treated your stock very well, and it doesn't look like it's gonna go well tomorrow for you yet. I'm very curious, why would you do this out the gate if you, if you had any discretion in sticking to what you said you would do, just to make it easier to digest what's going on with all these different moving pieces? Maybe you can, first of all, tell me, were you forced to make this decision by SEC? First of all, Ed, I think this is a presentation change. We're gonna give you the same, you know, math and the details that we've given before. We'll do a non-GAAP presentation, and we'll give the same underutilization startup cost disclosures as we've always given before. There's really no change from that perspective. Secondly, it's our job as a company to comply with SEC guidelines. We had correspondence with the SEC around how to deal with the changes in the accounting, and made the decision that we would, based on their updated guidance, that changing the presentation was appropriate. Will you then, in your press release, include another set of numbers other than just calling it out, saying, "Without these charges rolled into our COGS, this is what you would have had for both COGS and rev-"? I mean, we can't calculate it, obviously, but the stock's gonna react to what people see when they look at the press release, and it's gonna take a lot of legwork on your part and analysts' parts to explain all the different moving parts now that it's not clear in the press release. I know it sounds trivial, but as you're gonna see tomorrow, it's not gonna be, especially after all these quarters of problems, that we have to do this. Other than just calling it out and saying, "Hey, this is the charges that were rolled into COGS," are you gonna call out, "This would have been EPS if we didn't have those charges? Ed, we're disclosing what the impact is on gross margin and the underlying components. The way that we presented it today, we will do it in the future, will be in compliance with the way that is in alignment with the SEC guidelines. Okay. Then maybe a question for Greg. You mentioned that Building Ten is, is looking good. You've got 75% of it in. I know there's a relatively long delay from the time you put powder in your growth machines to getting revenue out of Mohawk Valley, which is what Building Ten is feeding. You seem to focus on epi I know last quarter, the bottleneck was epi for 200 millimeters. Is, is that no longer a problem? Is that not the bottleneck in Durham? Is it just growth? Maybe you just give us I'm sorry, in Building Ten. Could you just maybe, give us a little bit more clarity on how, the material side of the business is, is ramping out the door to, to Mohawk? I, I would say both, with the Building Ten crystal growth operation is in excellent shape right now. The quality of the crystals is great, and that's translating into very good defect density at the wafer level. Quality at epi is also very good, and we're ramping that capacity. I wouldn't say it's a dramatic bottleneck right now. There are some pinch points, but that's expanding, you know, as well. Then we flow the materials through Mohawk Valley, it runs through the fab, then it goes through test dice and inspect and back-end packaging, and so forth. Pretty, I would say there- as we ramp this fab, there's gonna be different pinch points, but I would say right now, there's not, there's not a dramatic, capacity shortage right now as we ramp towards 20% utilization. Great. Okay, it sounds like the chain is, is moving along as it should have versus some of the stuff we had in the past. Then, Neillll, real quick, I mean, you, you had a taller boule problem several quarters ago, and you built a lot of material where the COGS was higher because your yields were lower, and that's working through your revenue line now. Correct me if I'm wrong, is it already through there? If it isn't through there, how much of an impact to gross margins was the boule problem in the quarter? I think from a longer boule perspective on the yield, that's mostly behind us. I think we kind of worked through that during the fourth quarter. As we move to Q1, we're seeing more consistent performance from the materials perspective on the 150 millimeter platform. We anticipate to see kind of sustained, you know, solid performance from there going forward. you weren't, you weren't passing any high-cost inventory through revenue this, this, in the June quarter? There was some in the Q4 quarter, and I think that's behind us now as we move into 1 Q. Okay. Does that provide any relief? I mean, apples to apples, if nothing else changed, just, I'm just curious how much of an impact it, it, it had in the, in the fourth quarter, do you know? Well, if you look at, if you look at fourth quarter, we were down, you know, in several points of margin going from, you know, 3Q into 4Q, and that was really related to 2 things. I would call the quarter somewhat transitional, really based on two pieces. one was, working through the, the yields, the yield challenges we had in the longer boules. Again, I think we've seen good, solid performance from that. The team's done a good job there, and we've worked through that during Q4. And the other piece was a transition to more automotive output for customers that were originally slated for Mohawk Valley, and we're gonna feed those out of Durham. We made that, you know, started to make that transition as well. I think what we're seeing in Q4 is kind of a, a transitional period. We've kind of hit the bottom in terms of, you know, managing through those things. I think from a Durham perspective, we anticipate seeing, you know, some sustained performance going forward. I think that's reflected in the, you know, the pickup in gross margin versus Q4 going into Q1, on an underlying basis, ex the utilization. Okay. Okay. So that... and sorry, but it's a confusing quarter. It's safe to say then, as you move into Mohawk Valley and you build more product out of that, you don't have the problems with the 150mm automotive stuff out of Durham, so that improves gross margins, but the 200mm boule, I'm sorry, the thicker boule problems that had plagued the June quarter or the March quarter are pretty much wound out by the time you get into September and December? Correct. We should, as we, as we, what we talked about previously is behind us. As we, as we get more utilization and benefit from 200mm wafers in Mohawk Valley, we'll see more revenue, and we'll see improved, you know, margin. We'll see better margin improvement as we go through the year. Great. Thank you. Our next question is with Vivek Arya, with Bank of America. Your line is now open. Hi, this is Blake Friedman. I'm from Vivek. Thanks for taking my questions. First, just wanted to clarify and answer a previous question. Just exiting this year, did you say that the gross margins would be somewhere in the mid-20s? Just want to make sure I heard that right, and it wasn't for the full year. Secondly, as well, that 50% target that you mentioned, that remains unchanged. If I look at the last analyst day, I believe you had a 50%-54% gross margin target in fiscal 2027. Is that still the, the timeframe you're working at, or is that 50% target, more, aspirational longer term? I think as you bring the facilities to capacity, you know, you'll, you'll, you'll be well ahead of any underutilization challenges, obviously, because the facility will be utilized. Over time, it'll dissipate. I think the way you want to think about the timing of the gross margin is, as you work into 2024 and 2025, there'll be a bit of an overhang from underutilization. As we start to bring the factories up, we'll start to see that come down somewhat, and then we'll see a faster ramp out to 2026 and then to 2027, as you start to utilize the factories more and get better substrate capacity, both out of the Durham campus and out of Siler City. We'll see a, you know, a trajectory that brings that back up to that level of north of 50% as you get out to that, you know, 2026 and 2027, you know, timeframe. Great, helpful. Then just as my follow-up, just kind of thinking, from a, you know, a capacity perspective, I know there's kind of a, you know, a lot more of a focus of, you know, several vendors entering the market with their own internal capacity. There's a growing ecosystem in China as well. I guess, you know, from a, you know, a supply perspective, you know, both from maybe a material standpoint or a device standpoint, maybe just the growing entrance into the market, when is, you know, supply from a supply perspective, it starts to become a more of a concern? Yeah, maybe I'll take that. You know, obviously, the silicon carbide market growth is, is explosive right now. You know, many of the forecasts are that it's gonna have 40%, 50% compound annual growth rate for quite some time. That's obviously attracting a lot of new players. You know, we've been at this for a long time, and what I would tell you is that silicon carbide is a tricky technology. It's very difficult to master. We do have many of our materials customers have, have, have plans to have their own materials, you know, capability, and they've got different time frames for that. One of them, I think, is expecting to be fully internal by the end of this calendar year. Another is wants to be, I think, 40% internal, 60% internal over a long period of time. We have all of that modeled into our plans in terms of revenue. It's kind of fully expected that there would be more materials capability coming online, and we've got that baked into our plans. Great. Thank you. Our next question is from Colin Rusch with Oppenheimer. Your line is now open. Thanks so much, guys. You know, could you talk a little bit about the, the magnitude of the OpEx growth that you're expecting for the balance of the year and kind of the key areas of, of focus for that spend? Sure. From an OpEx perspective, you know, including the start-up expenses that we'll see, that came right in line with where we expected in Q4. We'll continue to invest in R&D and anything really that helps us drive, you know, Mohawk Valley up to the 20% utilization exiting year. That continues to be, you know, a major focus for us. We will see, as we get into Q1, we'll see some, you know, employee-related expenses as well, underlying. On top of that, we'll see some of the start-up costs. You know, I think in the prepared remarks, we mentioned about $8 million from primarily related to the JP and Siler City in Q1. As you look out to the end of the year, we'll see that probably, you know, that $8 million double probably by the time we get to the end of the year. We'll see some, you know, some, some modest pickup in the non, you know, startup type expense as we get out to the as we get out. Thanks. And then on the, on the customer side, you know, given this massive agreement that you, you've signed, you know, are you starting to see any real change in behavior from some of the, the other customers in terms of wanting to make sure they have access to supply? Is that dynamic changing? You know, are folks more willing to put deposits on the table for, you know, long-dated contracts? What's the, the sensibility around all of those dynamics right now? Yeah, I would say that that remains a key priority for customers. You know, we've got probably the most important transition that's happened in the auto industry in the last 100 years, which is the demise of the internal combustion engine being replaced by electric vehicles. All the OEMs are very interested in making sure that they're, you know, lined up with folks that are installing capacity, building capacity, spending money on CapEx, you know, et cetera. So there's a lot of activity on that front. Then, you know, I guess, you can point to the Renesas deal. You know, just from my perspective, it's the largest customer deposit I've ever seen. You know, $2 billion for a capacity corridor is quite a commitment, and I, I think it shows from a, from a, a Renesas perspective that silicon carbide is an important technology, and it's one that they need to have really strong access to. We've got a great partnership. It's a 10-year deal. It's the longest supply agreement we've done. I would say, yeah, there, there, there still remains a high level of interest in, in these sort of upfront capacity reservation spots. All right. Thanks, guys. Our next question is from Joshua Buchalter with TD Cowen. Your line is now open. Hey, guys. Thanks for taking my question. I, I wanted to follow up on a, a couple of previous ones. So if you're running-- firstly, I think you mentioned, the Durham Building Ten is 75% of the furnaces are installed. I guess, silicon carbide is installed, need running, and it sounds like you know, you're pretty close to being able to support or having the furnaces installed to support 20% utilization at Mohawk Valley, but you're not expecting to get there until the June quarter of 2024. Is this sort of the normal cadence of time from furnaces turning on to devices out of Mohawk Valley that we should be expecting going forward? Thank you. Yeah. Basically, yes, Joshua, is the answer to that, and I would, I would point to a couple of different things. We are, we are ramping the production of 200mm crystals. We're ramping the production of turning those into wafers or the wafering process, the epi process, and then feeding that all into a brand-new fab. All of that is kind of coming online, and the fact that we can go from, you know, $1 million worth of revenue to 20% utilized in, you know, basically a year is actually pretty good, I think. Got it. Then I, I also wanted to follow up on some previous comments. Any more details you can give? I guess, given on the volatility of 150mm device output at Durham, just given how constrained silicon carbide is, you know, I would have expected it to be smooth and just run at full utilization and capacity to generate that $100 million of revenue pretty smoothly going forward. I guess I'm just surprised by the intra-quarter moves coming out of that site, and I guess, should we expect it to remain volatile from here or sort of stay in the $100 million range? Thank you. Yeah, I, I wouldn't call it volatile. I think it's. We've, we said, I think, pretty clearly for the last, you know, couple of quarters that, Durham site, from a power device perspective, will be $100 million plus or minus, you know, 5% or so. I think it's probably pretty reasonable. It's an older fab. We've got, you know, different mixes running through the factory right now. And I think that's what, you know, kind of in line with what we had projected previously. I think, I think just from a, you know, a good forecasting perspective, I think you're going to see about that level going forward. And then, as you think about revenue trajectory for the power device business and generating revenue above that, and a meaningful lag, you know, would come from Mohawk Valley. Thanks, guys. Appreciate the color. Our next question is from Matthew Prisco with Evercore. Your line is now open. Hey, guys. Thanks for taking the question. To kick off, just on Mohawk Valley, as we look past the 20% utilization rate with Siler City starting to ramp, right, to hit 20%, how are you thinking of that cadence? How quickly will you turn, ramp up that utilization rate at Mohawk Valley? When do you expect to hit that 30%, 40% level? We are, we are in construction right now on, on the JP in Siler City. It's going vertical right now, so the, the shell is kind of going up. The expectation is that in the June quarter, we would begin-- June quarter of next year, we would begin producing 200 millimeter crystals out of that facility. That lines up pretty nicely with the increase that we, we would want at that time, coming out of, coming out of Mohawk Valley or, yeah, coming from Mohawk Valley. Additionally, we have other projects going on here, locally in, in North Carolina that are, that are working on getting more capacity out of our current footprint, and those come in two kind of flavors. One is R&D, where we're getting, you know, where we've got projects that will get more wafers per crystal run, so, you know, obviously higher throughput for the existing facility. The second is expansion into a couple of nearby sites and one in Durham area that are gonna help us with expansion. Another way of describing that is giving us a little bit of cushion on the ramp of the JP, so getting a little bit more capability out of our existing and our local facilities. Interesting. Then, I guess as, as you think about that ramp, obviously some, some delays going on at Durham, what gives you the confidence that, that Siler City will be able to, to ramp on time? Is it just taking a learning curve here and applying directly, or is it because it's a new fab, maybe a little new process, it's, it's completely new item? There's, there's a lot of work to be done, you know, on that, for sure. But we are, we are right now, tracking to the schedule that I just talked about. We have demonstrated that we can increase our capacity on, and create 200mm crystal growth machines that are producing them at high quality. We've already demonstrated that we could, we could fit out a new facility, which is this, so-called Building Ten here on our campus here. The Siler City, excuse me, the JP in Siler City, not that far away, so we'll be using the same team to ramp that facility. I think we've done it once, and, you know, doing it again will be, I, I would say, something we've already learned from. Gotcha. Just, just quickly on the material side, a few changes recently with the Renesas deal competitor announcements. You know, given your delays that you've seen from now having to use more internally, how are you thinking about the material targets that you provided at your, at your last analyst day? Are those still the right ballpark to think about from a revenue and share perspective, or have things kind of changed since then in your eyes? Well, the, the one thing—first off, no, we wouldn't be changing the target. But I would say, you know, in between then and now, we've obviously signed up a, you know, a very big supply agreement with Renesas. You know, that is now, you know, part of our plan. And I would say, as I said in my prepared remarks, the demand right now for our, for silicon carbide, both devices and materials, is very, very high. Perfect. Thanks, guys. Thank you. Our next question is from Natalia Winkler, with Jefferies. Your line is now open. Thanks for taking my question. I wanted to follow up on that Siler City ramp. Could you guys please remind us, how large is that JP related CapEx? What's the kind of the timeline for the entire ramp? How should we think about any potential depreciation headwind from the JP ramp? Yeah. From a investment perspective, we've talked about $2 billion in CapEx this year. I'd say the vast majority of that is related to the build-out of the JP. We also have some tools we're putting into Mohawk Valley. We have some, you know, some materials expansion and some backup, back-end semiconductor equipment putting in. I think the, the vast majority of that would be done here in 2024, which then indicates as we get into 2025, we should be able to start ramping, that facility. As you think about the kind of fixed costs or start-up costs, we talked about $8 million related to that this quarter. It should double by the end of the fiscal year. To about $16 million in Q4. Then we should see some additional increases in 2025. As we bring that onto onto capacity level, so similar to what we just saw in Mohawk Valley, that will transition to cost of sales and just be part of our cost of sales moving forward as we transition that factory to production in 2025. Understood. Thank you. Then for my follow-up, I wanted to ask on the RF business, could you guys provide some sort of color, what you're seeing there and maybe what your expectations are for the next 2 quarters? Yes, from an RF perspective, you know, I think the overall kind of environment has been somewhat weak, in line with our expectations. We see that kind of flattish year for the, at least the first half of the fiscal year, with maybe a modest pickup in the back half of the year. Understood. Thank you. I'd now like to turn the call back over to Gregg Lowe for some final thoughts. Just a couple of final thoughts before we wrap up. We are producing high-quality 200mm substrates at the Durham campus that are yielding well. These are feeding Mohawk Valley, which is open for business, generating revenue, and beginning to scale. Construction at the JP, our new 200mm materials factory, is underway and will pave the way for a substantial increase in supply as demand continues to grow at unprecedented levels. That is demonstrated by the $8.3 billion of design-ins that we were awarded in fiscal 2023. Finally, we've secured $5 billion of funding in the last nine months to ensure we are well positioned to support this multi-decade growth opportunity. We appreciate your continued support and look forward to speaking with you next quarter. That concludes the conference call. Thank you for your participation. You may now disconnect your line.