Financial Data and Key Metrics Changes - The company generated 195millioninrevenueforthequarter,slightlybelowthemidpointofguidanceanddown3528 million, comprised of negative 132millionofoperatingcashflowand396 million of capital expenditures [50] Business Line Data and Key Metrics Changes - Power revenue was 97million,downquarteroverquarter,drivenlargelybylowerdemandintheindustrialandenergysectors[47]−RevenuecontributionfromtheMohawkValleywas49 million, up more than 20% quarter over quarter, marking the first quarter where Mohawk Valley contributed more power device revenue than the Durham Fab [47] - Materials revenue was 98million,upslightlyfromthepriorquarter,drivenbystrongoperatingperformance[48]MarketDataandKeyMetricsChanges−EVrevenuegrew2.5xyear−over−year,withexpectationsforcontinuedgrowththroughoutcalendar2025[21]−Theindustrialandenergysectorsareexperiencingcontinuedsoftnessduetomacroeconomicpressures,withordersremainingweak[22]−Thecompanyexpectsthemarkettobeginrecoveringinthefirsthalfofcalendar2025asinventorylevelsdecline[23]CompanyStrategyandDevelopmentDirection−Thecompanyisfocusedonsolidifyingitscapitalstructuretosupportatargetedannualrevenueofapproximately3 billion from its 200mm footprint [8] - A strategic transition to a fully 200mm device platform is underway, aimed at lowering costs and improving profitability [12] - The company plans to close its 150mm device fab in Durham and optimize its capacity footprint by closing the epitaxy facility in Texas [15][16] Management's Comments on Operating Environment and Future Outlook - Management noted that while EV adoption is growing, the transition period is dynamic, with customers revising launch timelines [20] - The company remains confident in long-term EV demand despite short-term challenges [20] - Management expects non-GAAP EBITDA profitability in the second half of fiscal 2025 and operating cash flow break-even during fiscal year 2026 [55] Other Important Information - The company secured 750millionindirectfundingundertheCHIPSandScienceAct,alongwith750 million in additional debt funding [11] - A workforce reduction impacting approximately 20% of the total employee base is being implemented to align with market conditions [16][43] - The company is targeting annual cash savings of approximately $200 million from restructuring initiatives [17] Q&A Session Summary Question: Implications of election results on the CHIPS Act - Management expressed confidence that bipartisan support for the CHIPS Act remains strong, emphasizing the importance of silicon carbide technology for U.S. economic security [60] Question: Status with Renesas regarding wafer commitments - Management confirmed a strong relationship with Renesas and noted that demand may ebb and flow as they establish their foothold in the silicon carbide business [62] Question: Revenue ramp down of the Durham device fab - Management indicated that the transition from Durham to Mohawk Valley is well underway, with expectations for the majority of revenue to transfer successfully [65] Question: Competitive environment for materials business - Management noted strong interest from materials customers in moving to 200mm, with ongoing discussions about supply agreements [68] Question: Operational milestones for CHIPS Act funding - Management expressed confidence in meeting the operational milestones required for the first tranche of funding [74]
Wolfspeed(WOLF)2024-11-07 01:09