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Wolfspeed announced that Melissa Garrett has been appointed Senior Vice President and General Counsel, effective December 9, 2024. Garrett succeeds Brad Kohn, who has resigned from the company for another professional opportunity.
Garrett brings extensive legal expertise and has served as a senior member of Wolfspeed’s legal team leading global employment and non-patent litigation matters since 2015. She brings a comprehensive legal background in contracts and negotiations, litigation management, corporate governance, employment law, policy and mergers and acquisitions.
“Melissa’s contributions to Wolfspeed over the last nine years have been highly valuable, and we are pleased to welcome her to the role of General Counsel,” said Tom Werner, Executive Chairman. “With her proven track record in legal, risk and compliance, coupled with her deep institutional knowledge of Wolfspeed, she is uniquely qualified to step into this role. We deeply appreciate Brad’s tireless advocacy for Wolfspeed over the years and thank him for his dedication and many contributions to the company. He and Melissa have been working closely on all key projects, so we expect a smooth transition and we wish him all the best in his future endeavors.”
Prior to joining Wolfspeed, Garrett served as Deputy General Counsel and Assistant Corporate Secretary at Kangaroo Express. She previously served as an attorney at Jackson Lewis and Paul, Hastings, Janofsky & Walker LLP, and began her career as an attorney at Fisher & Philips. She holds a Juris Doctor from Indiana University and a Bachelor of Arts from University of Wisconsin-Madison.
Original – Wolfspeed
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Wolfspeed announced that its Board of Directors (the “Board”) has determined and agreed with Gregg Lowe that he will depart this month from his roles as Wolfspeed’s President and Chief Executive Officer and as a member of the Board. The Board is conducting a search to identify a permanent CEO with the support of a leading global executive search firm.
The Board has appointed Thomas Werner, Chairman of the Board, as Executive Chairman while the Board works to identify Wolfspeed’s next CEO. Mr. Werner will oversee the continued execution of Wolfspeed’s strategy in close alignment with Wolfspeed’s senior leadership team, the Board and the Board’s operations and finance committees. Following Mr. Werner’s appointment as Executive Chairman, Board member Stacy Smith was appointed as Lead Independent Director.
“On behalf of the full Board, I would like to thank Gregg for his service and dedication to Wolfspeed,” Mr. Werner said. “Since joining the Company as CEO in 2017, Gregg has spearheaded our transition into a leading, pure-play silicon carbide company well-positioned to capture the long-term opportunities ahead. The Board has always been focused on driving long-term value, and at this inflection point in Wolfspeed’s journey, the Board agreed that this is the right time for a leadership transition.”
Mr. Werner added, “I have started in the role of Executive Chairman to keep Wolfspeed focused on completing key priorities while the Board conducts a search for our next CEO. I look forward to working closely with our highly engaged Board and senior leadership team to oversee day-to-day operations and ensure we continue to provide our customers with high-quality products. As we look ahead, we are firmly committed to our key strategic initiatives, which includes executing against the milestones outlined in our recent CHIPS PMT agreement, completing our restructuring initiatives to lower our break-even point and accelerate our path towards profitability, and delivering sales growth on a consistent basis. Wolfspeed is materially undervalued relative to its strategic value and I will focus on driving the Company’s priorities and working with the Finance Committee of the Board to explore options to unlock value.”
Mr. Lowe said, “I am honored to have had the opportunity to lead Wolfspeed and work alongside such talented and dedicated colleagues. Over the past seven years, we have transformed Wolfspeed into the only pure-play and vertically integrated silicon carbide operator in the country to capitalize on the structural and long-term demand for next generation semiconductor technology. While there is work still to be done, I have every confidence that Wolfspeed will execute on its strategic priorities and extend its silicon carbide leadership in the years to come.”
About Thomas Werner
Mr. Werner has been a member of the Board of Directors since March 2006, and has served as Chairman of the Board of the Company since October 2023. He has served as the Executive Chairman of SunPower Corporation (Nasdaq: SPWR), a publicly traded marketer of high-efficiency solar cells and solar panels, since February 2024, and served as Principal Executive Officer of SunPower from February 2024 until August 2024. Mr. Werner previously served as Sunpower’s Chairman of the Board of Directors from June 2010 to November 2021 and as its Chief Executive Officer from June 2003 to April 2021. Prior to SunPower, he served as Chief Executive Officer of Silicon Light Machines Corporation, an optical solutions subsidiary of Cypress Semiconductor Corporation, from July 2001 to June 2003. Earlier, Mr. Werner was Vice President and General Manager of the Business Connectivity Group of 3Com Corporation, a network solutions company.
Original – Wolfspeed
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Wolfspeed, Inc. announced its results for the first quarter of fiscal 2025.
Quarterly Financial Highlights (Continuing operations only. All comparisons are to the first quarter of fiscal 2024.)
- Consolidated revenue of approximately $195 million, as compared to approximately $197 million
- Mohawk Valley Fab contributed approximately $49 million in revenue
- Power device design-ins of $1.5 billion
- Power device design-wins of $1.3 billion
- GAAP gross margin of approximately (19)%, compared to approximately 13%
- GAAP gross margin includes the impacts of underutilization costs primarily in connection with the start of production at the Mohawk Valley Fab. Underutilization was $26.4 million as compared to $34.4 million.
- Non-GAAP gross margin of 3%, compared to 16%
- Ended Q1 with ~$1.7 billion in cash and investments; does not include initial draw down of $250 million from lender group
“This quarter we took action to solidify the capital structure, simplifying our business to accelerate structural profitability and support the build out of our state-of-the-art silicon carbide facilities. We will have a 200mm silicon carbide footprint at Mohawk Valley and North Carolina materials factories that we target to generate approximately $3 billion in revenue annually,” said Wolfspeed CEO, Gregg Lowe. “Last month, we reached a significant milestone by signing a non-binding preliminary memorandum of terms (PMT) for up to $750 million in proposed direct funding under the CHIPS and Science Act and an additional $750 million from our lending group, demonstrating substantial progress towards our funding goals. With this announcement, we now have access to up to $2.5 billion of incremental funding to support our U.S. capacity expansion plans.”
Lowe continued, “To drive operational improvements, we are taking action to enhance efficiency, align our business with current market conditions and become the first silicon carbide company to transition to pure-play 200-millimeter. The transition to a fully 200-millimeter platform allows us to take further initiatives to streamline our cost structure, including closing our manual Durham 150-millimeter Fab, other manufacturing footprint rationalization, and reducing our workforce. Combined, we expect these initiatives will yield approximately $200 million in annual cash savings. In parallel, we remain focused on optimizing our capital structure, further reducing our fiscal 2025 CapEx guidance by $100 million to align the pace of our spend with the broader shift in EV market demand.”
“We delivered 2.5 times year-over-year growth in our automotive business in the first quarter, and we expect our EV revenue to continue to grow throughout calendar 2025, as the total number of car models using a Wolfspeed silicon carbide solution in the power train increased by 4x from 2023 to 2024 and is expected to grow by another approximately 75% year over year in 2025. We also remain confident in the long-term fundamentals of our industrial and energy business. Importantly, we believe the secular trends and long-term growth drivers for our core end markets remain intact, and we expect the actions we are taking today will allow us to become a more efficient and agile organization positioned to capture the long-term growth opportunities ahead,” concluded Lowe.
For its second quarter of fiscal 2025, Wolfspeed targets revenue from continuing operations in a range of $160 million to $200 million. GAAP net loss is targeted at $401 million to $362 million, or $3.14 to $2.84 per diluted share. Non-GAAP net loss is targeted to be in a range of $145 million to $114 million, or $1.14 to $0.89 per diluted share.
Targeted non-GAAP net loss excludes $256 million to $248 million of estimated expenses, net of tax, primarily related to stock-based compensation expense, amortization of discount and debt issuance costs, net of capitalized interest, project, transformation and transaction costs and restructuring and other facility closure costs. The GAAP and non-GAAP targets do not include any estimated change in the fair value of the shares of common stock of MACOM Technology Solutions Holdings, Inc. (MACOM) that we acquired in connection with the sale to MACOM of our RF product line (RF Business Divestiture).
During the first quarter of fiscal 2025, Wolfspeed initiated a facility closure and consolidation plan to optimize its cost structure and accelerate its transition from 150mm to 200mm silicon carbide devices. The costs incurred as a result of this restructuring plan include severance and employee benefit costs, voluntary termination benefits and other facility closure-related costs.
Wolfspeed incurred $87.1 million of restructuring-related costs in the first quarter of fiscal 2025, of which $34.3 million were recognized in cost of revenue, net and $52.8 million were expensed as operating expense in the statement of operations. For the second quarter of fiscal 2025, the Company expects to incur $174 million of restructuring-related costs, of which $34 million will be recognized in cost of revenue, net and the remaining $140 million will be recognized as operating expense.
Original – Wolfspeed
- Consolidated revenue of approximately $195 million, as compared to approximately $197 million
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Wolfspeed, Inc. announced that Thomas Seifert and Woody Young have been nominated to Wolfspeed’s Board of Directors (the “Board”). Their nominations will be considered by shareholders at the 2024 Annual Meeting of Shareholders (the “2024 Annual Meeting”), scheduled for December 5, 2024.
Mr. Seifert has served as the Chief Financial Officer of Cloudflare, Inc., a leading internet security company, since June 2017. Prior to joining Cloudflare, Mr. Seifert held executive leadership positions at a number of technology and semiconductor companies, including serving as Chief Financial Officer of Symantec Corporation, Brightstar Corp., and Advanced Micro Devices Inc. Mr. Seifert currently serves as a member of the Board of Directors of First Derivatives plc, an ultra-high-performance analytics software company.
Mr. Young most recently served as the President and a member of the Board of Directors of Solidigm, a flash memory semiconductor company, from October 2022 until August 2023. Mr. Young has over 30 years of experience as an investment banker and is the former Chairman of Mergers and Acquisitions at Perella Weinberg Partners LP. He previously served as the Co-Head of Global Telecommunications, Media, and Technology at Lazard and in similar roles at Merrill Lynch and Lehman Brothers. Mr. Young currently serves as a member of the Board of Directors of Frontier Communications Parent, Inc. (Nasdaq: FYBR), a fiber internet provider.“We are delighted to nominate Thomas Seifert and Woody Young for election to the Wolfspeed Board of Directors,” said Thomas Werner, Chair of the Wolfspeed Board. Mr. Werner continued, “With yesterday’s CHIPS Act capital structure update, I believe the Company successfully took a key step towards funding the execution of its business plan. We believe Thomas and Woody will be valuable additions to the Board as we focus on executing that plan, driving operational execution improvement, and continuing our previously disclosed efforts to explore ways to enhance shareholder value and unlock Wolfspeed’s strategic value.”
Clyde R. Hosein and John B. Replogle, who have served on the Board since 2005 and 2014, respectively, are not standing for re-election and will retire from the Board following the expiration of their terms at the 2024 Annual Meeting. “On behalf of the Board, I want to thank Clyde and John for their dedication and exemplary service to Wolfspeed over many years,” said Mr. Werner.
Original – Wolfspeed
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The U.S. Department of Commerce and Wolfspeed announced they have signed a non-binding preliminary memorandum of terms (PMT) for up to $750 million in proposed direct funding under the CHIPS and Science Act. In addition, a consortium of investment funds led by Apollo, The Baupost Group, Fidelity Management & Research Company and Capital Group have agreed to provide Wolfspeed an additional $750 million of new financing.
Together these investments support Wolfspeed’s long-term growth plans and bolster domestic production of silicon carbide to power clean energy systems underpinning electric vehicles (EVs), artificial intelligence (AI) data centers, battery storage and more. In addition, Wolfspeed expects to receive $1 billion of cash tax refunds from the advanced manufacturing tax credit under the CHIPS and Science Act (section 48D), giving the company, in total, access to up to $2.5 billion of expected capital to support the expansion of silicon carbide manufacturing in the United States.
Wolfspeed is the world’s largest producer of silicon carbide technology, pioneering the technology more than 35 years ago on the campus of North Carolina State University. Since that time, Wolfspeed has become the global leader in silicon carbide technology, one of the fastest growing components of the broader semiconductor industry.
- Silicon carbide is a superior alternative to silicon for high power applications – such as EV powertrains, e-mobility, renewable energy systems, battery energy storage systems, and AI and cryptocurrency data centers – that unlocks improved performance and lower system costs.
- Notably, the importance of bolstering the domestic production of silicon carbide has been recognized across multiple federal agencies; the Department of Energy denoted it as one of 17 “critical materials” with a high risk of supply disruption that are integral to clean energy technologies, while the Department of Commerce recognizes silicon carbide semiconductors as important to national security.
- As the U.S. and the world pursue more efficient and environmentally friendly solutions to meet the world’s ever-increasing need for high-voltage energy products, it is crucial that the U.S. continue to make strategic investments to cement its technological leadership position, while continuing to spur American innovation in critical technologies.
Wolfspeed CEO, Gregg Lowe, said, “To reach this milestone under the U.S. CHIPS and Science Act is an incredible achievement in Wolfspeed’s long-term growth strategy, and we believe today’s announcement is a testament to the market-leading quality of Wolfspeed products and significance of Wolfspeed to broader U.S. economic and national security interests. This support galvanizes our ability to expand domestic manufacturing, accelerate innovation in next-generation semiconductor technology, and meet the increasing global demand for silicon carbide. As a key player in the semiconductor industry, this proposed investment will enable us to solidify our leadership position with a first-of-its-kind 200mm silicon carbide manufacturing footprint in upstate New York and central North Carolina, while contributing to the resilience and competitiveness of the U.S. supply chain. It’s not just about growth for Wolfspeed—it’s about driving technological advancement that powers the future.
“Silicon carbide is already enabling superior energy efficiency across mission-critical industries of the future like electric vehicles, e-mobility, solar and wind energy, industrial power applications, and AI data centers. While EVs have been the driver of silicon carbide adoption thus far, we believe the use cases for our technology are expansive and will only continue to grow as more and more industries find themselves needing to solve for the same power loss, system size, and system cost challenges as automakers,” concluded Lowe.
“Artificial intelligence, electric vehicles, and clean energy are all technologies that will define the 21st century, and thanks to proposed investments in companies like Wolfspeed, the Biden-Harris Administration is taking a meaningful step towards reigniting U.S. manufacturing of the chips that underpin these important technologies,” said U.S. Secretary of Commerce Gina Raimondo. “Because of the Biden-Harris Administration’s CHIPS and Science Act, the United States is building and fortifying our semiconductor manufacturing capabilities to serve our economic and national security interests while creating jobs and economic opportunities for communities across the country.”
“Wolfspeed is leading the pack in bringing semiconductor manufacturing back to America. This major multibillion dollar investment powered by my CHIPS & Science Law will accelerate the ongoing expansion in the Mohawk Valley, helping speed up hiring of hundreds of new good-paying jobs that Wolfspeed is creating in the Mohawk Valley and providing long term work for the Marcy fab to succeed well into the future, further establishing Upstate NY as a global hub for chip manufacturing,” said Senator Chuck Schumer. “From electric vehicles to artificial intelligence, this critical technology relies on the silicon carbide chips that Wolfspeed will manufacture and perfect in the Mohawk Valley. Today’s massive investment will make America’s economy and our national security stronger as Wolfspeed helps us write the next chapter of America’s resurgence as the leader in the semiconductor industry, with the Mohawk Valley as the beating heart.”
“Wolfspeed is a homegrown semiconductor innovator and manufacturer creating great jobs in North Carolina, and it’s important they received this major grant under the CHIPS and Science Act,” said North Carolina Governor Roy Cooper. “Thanks to this landmark legislation from the Biden-Harris Administration and our great workforce, we will continue to see good paying jobs coming to North Carolina.”
“This $750 million federal investment is a testament to Wolfspeed’s unique leadership in silicon carbide semiconductor manufacturing, and I applaud Wolfspeed’s continued commitment to North Carolina,” said Senator Thom Tillis. “I was proud to vote for the CHIPS and Science Act to provide the funding for this investment in North Carolina and to support our economic and national security.”
“North Carolina continues to be a leader in cutting-edge manufacturing that is vital to our country’s national and economic security,” said Senator Ted Budd. “This new Wolfspeed site in Siler City will bring good-paying jobs to the area and is an important first step in making sure America has secure supply chains for critical semi-conductors.”
“We are pleased to expand our investment in Wolfspeed by providing additional capital in support of the company’s build out of its leading silicon carbide capabilities,” said Apollo Partner Joseph Jackson. “We believe Wolfspeed is at the forefront of a critical transformation in sustainable transportation and ensuring that the company has durable capital access to complete its expansion plans will help solidify its leadership in this space. Along with our lending consortium, which includes multiple funds that also own substantial equity stakes in the company, we believe this strategic investment will drive significant long-term value while advancing key tenets of the CHIPS and Science Act.”
These proposed funds, which are expected to be received upon milestone achievements in the coming years, would enable Wolfspeed to complete its multi-billion-dollar greenfield U.S. capacity expansion plan, which consists of the largest and most advanced 200mm silicon carbide footprint in the world. In addition to the proposed direct funding, Wolfspeed intends to benefit from the U.S. Treasury Department Investment Tax Credit of up to 25% of the qualified capital expenditures primarily related to its construction and installation of equipment at The John Palmour Manufacturing Center for Silicon Carbide in Siler City, NC and completion of the Mohawk Valley Fab M-Line West Expansion in Utica, NY.
This multi-billion-dollar investment will bolster Wolfspeed’s balance sheet and will help to fuel significant growth through cash generation and accelerate its long-term profitability goals.
Summary of the PMT
The PMT outlines key terms for a CHIPS incentive award, including the proposed amount and form of the award, and provides that the disbursement of funds will be conditioned upon the achievement of certain operational and construction milestones and other requirements.
The PMT includes an obligation for Wolfspeed to raise an aggregate of $750 million in debt financing over three tranches through the issuance of senior notes under an amended and restated indenture. Wolfspeed and its lenders, led by Apollo funds, have reached an agreement for this additional financing, including $250 million to be available within 10 business days, and have agreed to certain intercreditor terms with the CHIPS Program Office as described in the PMT.
Together, the PMT and the agreement with lenders also requires:
- Wolfspeed to undertake further actions with respect to its capital structure, including (a) restructuring or refinancing its outstanding 2026, 2028 and 2029 convertible notes at specified intervals prior to their respective maturity dates, (b) deferring a total of $120 million in cash interest payments due prior to June 30, 2025 under an unsecured customer refundable deposit agreement, and (c) raising up to $300 million of additional capital from non-debt sources over the next 12 months.
- In addition, Wolfspeed has agreed with its lenders to certain revisions in the terms of the senior notes, including revisions to the interest rate applicable to the senior notes, as described in the Form 8-K filed today with Securities and Exchange Commission (SEC).
The PMT provides that the award is subject to due diligence and the negotiation and signing of a definitive direct funding agreement with the Department of Commerce and the negotiation and signing of an intercreditor agreement between the Department of Commerce and the Company’s lenders, which may contain different or additional conditions not contained in the PMT. Additional terms of the PMT were not disclosed.
Original – Wolfspeed
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Wolfspeed, Inc. unveiled a silicon carbide module designed to transform the renewable energy, energy storage, and high-capacity fast-charging sectors through improved efficiency, durability, reliability, and scalability. The 2300V baseplate-less silicon carbide power modules for 1500V DC Bus applications were developed and launched utilizing Wolfspeed’s state-of-the-art 200mm silicon carbide wafers.
Wolfspeed also announced that it is partnering with EPC Power, a premier North American utility-scale inverter manufacturer. EPC Power will be employing the Wolfspeed® modules in utility-grade solar and energy storage systems, which offer a scalable high-power conversion system and high-performance controls and system redundancy.
“The solar and energy storage market remains among the fastest-growing segments of the renewable energy industry. As the pioneers of silicon carbide, we are driven to create solutions that will open the door to a new era of modern energy,” said Jay Cameron, Wolfspeed Senior Vice President and General Manager, Power. “Energy efficiency, reliability, and scalability are top of mind for our customers, such as EPC Power, who recognize the substantial advantages Wolfspeed’s silicon carbide brings to the table.”
“Silicon carbide devices open the door to a step-change in inverter performance and reliability. With our commitment to extreme reliability, performance, and security in our new ‘M’ inverter while also forging a deep commercial relationship with key suppliers, Wolfspeed was the obvious choice,” said Devin Dilley, President and Chief Product Officer, EPC Power.
With mounting global investment in renewable energy, the solar energy market is estimated to reach a $300 billion market capitalization by 2032. According to the International Energy Agency (IEA), 2024-25 will see the highest energy demand growth rate since 2007, reinforcing the need for efficient and reliable clean power. Wolfspeed’s silicon carbide solution helps bridge this crucial gap, supporting the next era of modern energy technologies while reinforcing U.S. clean energy manufacturing leadership.
Cameron continued, “This platform further validates our investments in 200mm wafer technology and production as the potential of silicon carbide continues to be recognized by industry leaders across all mission-critical applications.”
Original – Wolfspeed
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Wolfspeed, Inc. announced its results for the fourth quarter of fiscal 2024 and the full 2024 fiscal year.
Quarterly Financial Highlights (Continuing operations only. All comparisons are to the fourth quarter of fiscal 2023.)
- Consolidated revenue of approximately $201 million, as compared to approximately $203 million
- Mohawk Valley Fab contributed approximately $41 million in revenue
- Power device design-ins of $2.0 billion
- Quarterly design-wins of $0.5 billion
- GAAP gross margin of 1%, compared to 29%
- Non-GAAP gross margin of 5%, compared to 31%
- GAAP and non-GAAP gross margins for the fourth quarter of fiscal 2024 include the impact of $24 million of underutilization costs. See “Start-up and Underutilization Costs” below for additional information.
Full Fiscal Year Financial Highlights (all comparisons are to fiscal 2023)
- Consolidated revenue of approximately $807 million, as compared to approximately $759 million
- GAAP gross margin of 10% as compared to 32%
- Non-GAAP gross margin of 13% as compared to 35%
- GAAP and non-GAAP gross margins for fiscal 2024 include the impact of approximately $124 million of underutilization costs. See “Start-up and Underutilization Costs” below for additional information.
“We have two priorities we are focused on: optimizing our capital structure for both the near term and long term and driving performance in our state-of-the-art, 200-millimeter fab, and this quarter was a step forward on both of these priorities,” said Wolfspeed CEO, Gregg Lowe.
“We achieved 20% utilization at Mohawk Valley in June and continued to see strong revenue growth from that fab. Our 200mm device fab is currently producing solid results, which are at significantly lower costs than our Durham 150mm fab. This improved profitability gives us the confidence to accelerate the shift of our device fabrication to Mohawk Valley, while we assess the timing of the closure of our 150mm device fab in Durham. At the JP, we have also made great progress, installing and activating initial furnaces in the fourth quarter. We have already processed the first silicon carbide boules from the JP and the quality is in line with the high-quality materials coming out of Building 10.
“At the same time, we are taking proactive steps to slow down the pace of our CapEx by approximately $200 million in fiscal 2025 and identify areas across our entire footprint to reduce operating costs. We also remain in constructive talks with the CHIPS office on a Preliminary Memorandum of Terms for capital grants under the CHIPS Act. In addition to any potential capital grants from the CHIPS program, our long-term CapEx plan is expected to generate more than $1 billion in cash refunds from Section 48D tax credits from the IRS, of which we’ve already accrued approximately $640 million on our balance sheet,” continued Lowe.
Business Outlook:
For its first quarter of fiscal 2025, Wolfspeed targets revenue from continuing operations in a range of $185 million to $215 million. GAAP net loss is targeted at $226 million to $194 million, or $1.79 to $1.54 per diluted share. Non-GAAP net loss from continuing operations is targeted to be in a range of $138 million to $114 million, or $1.09 to $0.90 per diluted share.
Targeted non-GAAP net loss excludes $88 million to $80 million of estimated expenses, net of tax, primarily related to stockbased compensation expense, amortization of discount and debt issuance costs, net of capitalized interest, project, transformation and transaction costs and loss on Wafer Supply Agreement.
The GAAP and non-GAAP targets from continuing operations do not include any estimated change in the fair value of the shares of common stock of MACOM Technology Solutions Holdings, Inc. (MACOM) that we acquired in connection with the sale to MACOM of our RF product line (RF Business Divestiture).
Start-up and Underutilization Costs:
As part of expanding its production footprint to support expected growth, Wolfspeed is incurring significant factory start-up costs relating to facilities the Company is constructing or expanding that have not yet started revenue generating production. These factory start-up costs have been and will be expensed as operating expenses in the statement of operations.
When a new facility begins revenue generating production, the operating costs of that facility that were previously expensed as start-up costs are instead primarily reflected as part of the cost of production within the cost of revenue, net line item in our statement of operations. For example, the Mohawk Valley Fab began revenue generating production at the end of fiscal 2023 and the costs of operating this facility in fiscal 2024 and going forward are primarily reflected in cost of revenue, net.
During the period when production begins, but before the facility is at its expected utilization level, Wolfspeed expects some of the costs to operate the facility will not be absorbed into the cost of inventory. The costs incurred to operate the facility in excess of the costs absorbed into inventory are referred to as underutilization costs and are expensed as incurred to cost of revenue, net. These costs are expected to continue to be substantial as Wolfspeed ramps up the facility to the expected or normal utilization level.
Wolfspeed incurred $20.5 million of factory start-up costs and $24.0 million of underutilization costs in the fourth quarter of fiscal 2024. No underutilization costs were incurred in the fourth quarter of fiscal 2023.
For the first quarter of fiscal 2025, operating expenses are expected to include approximately $25 million of factory start-up costs primarily in connection with materials expansion efforts. Cost of revenue, net, is expected to include approximately $24 million of underutilization costs in connection with the Mohawk Valley Fab.
Original – Wolfspeed
- Consolidated revenue of approximately $201 million, as compared to approximately $203 million
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Wolfspeed, Inc. provided an update on key milestones and an operational update.
Wolfspeed’s Mohawk Valley silicon carbide fab has reached 20% wafer start utilization, a critical step in the Company’s efforts to meet the growing demand for silicon carbide power devices. Additionally, Wolfspeed’s Building 10 Materials facility has achieved its 200mm wafer production target to support approximately 25% wafer start utilization at the Mohawk Valley fab by the end of calendar year 2024. Wolfspeed plans to update the market on its next utilization milestone for Mohawk Valley during its fiscal Q4 2024 earnings call in August.
The Mohawk Valley fab has also achieved LEED (Leadership in Energy and Environmental Design) Silver certification, a distinction from the world’s most widely used green building framework and rating system. The LEED Silver certification highlights Wolfspeed’s enduring commitment to going beyond compliance, promoting environmental health and industry leading sustainability.
This state-of-the-art Mohawk Valley facility is the world’s first purpose-built, fully automated 200mm silicon carbide fab, and when combined with Wolfspeed’s market-leading 200mm materials production, solidifies Wolfspeed’s competitive position as the only fully vertically integrated 200mm silicon carbide manufacturer at scale.
Additionally, Wolfspeed’s John Palmour Manufacturing Center (“the JP”) in Siler City, NC, which will be the world’s largest, most advanced silicon carbide materials facility upon completion, has installed and recently activated initial furnaces less than one year after vertical construction commenced. As a result, the facility is on schedule to achieve crystal qualification by early August 2024. This meaningful progress reinforces the Company’s confidence that it is well-positioned to ramp the JP in line with its target to deliver wafers from the facility to Mohawk Valley by the summer of 2025.
Wolfspeed also announced that it experienced an equipment incident at its Durham 150mm device fab that resulted in a temporary capacity reduction while the incident was being remediated. Production has been resumed and the Company expects that the Durham 150mm device fab’s capacity utilization can return to previously targeted levels by August. As a result of the production disruption, the Company does not expect an impact on fourth quarter revenue, but does expect to have an underutilization impact and incur other costs in the fourth quarter as described below.
“Having reached our 20% utilization target at Mohawk Valley, we are well-positioned to continue executing our 200mm vertical integration strategy ahead of other market participants,” said Gregg Lowe, president and CEO of Wolfspeed. “Further, recent advancements at the JP put Wolfspeed well on track to achieve our facility targets and significantly expand our materials capacity, driving meaningful progress towards our strategic goals. We quickly identified and resolved an equipment incident at our Durham 150mm device fab, and we continue to focus on execution as we move with urgency to continue this first-of-its-kind ramp.”
Business Outlook
Based on the Durham 150mm device fab equipment incident, Wolfspeed is updating its fiscal fourth quarter 2024 guidance as follows, and providing a preliminary outlook on fiscal first quarter 2025 revenue and non-GAAP gross margin:
- Targeted fiscal fourth quarter revenue from continuing operations is unchanged at $185 million to $215 million; and a potential negative impact to fiscal first quarter 2025 revenue of approximately $20 million.
- Targeted fourth quarter GAAP gross margins in the range of (4%) to 4% and non-GAAP gross margins in the range of 0% to 8%, due to an underutilization impact realized in the fourth quarter and other fourth quarter costs related to the equipment incident. The Company also expects fiscal first quarter 2025 non-GAAP gross margins in a similar range due to underutilization it will realize in the period.
- Fourth quarter GAAP net loss from continuing operations is targeted at $204 million to $182 million, or $1.61 to $1.44 per diluted share. Non-GAAP net loss from continuing operations is targeted to be in a range of $122 million to $105 million, or $0.96 to $0.83 per diluted share. Targeted non-GAAP net loss from continuing operations excludes $77 million to $82 million of estimated expenses, net of tax, primarily related to stock-based compensation expense, amortization of discount and debt issuance costs, net of capitalized interest, project, transformation and transaction costs and loss on Wafer Supply Agreement.
Original – Wolfspeed
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Wolfspeed is expanding its portfolio of industry-leading SiC MOSFET & Schottky diode discrete products with the addition of the new Top Side Cooled (TSC) package: the U2. With options ranging from 650 V – 1200 V, Wolfspeed’s TSC products significantly increase system level power density and efficiency, while improving thermal management and board layout flexibility.
Applications:
- Electric Vehicle (EV) On-Board Chargers and Fast Charging Infrastructure
- EV & Industrial HVAC (Heating, Ventilation, and Air Conditioning) Motor Drives
- High Voltage DC/DC Converters
- Solar and Energy Storage
- Industrial Motor Drives
- Industrial Power Supplies
Features:
- Low profile, surface mount footprint
- Top side cooling with low Rth
- AEC-Q101 Automotive Qualified Options
- SiC MOSFETs Available from 750 V – 1200 V
- SiC Schottky Diodes Available from 650 V – 1200 V
Benefits:
- Highest Creepage Distance Available for SiC Top Side Cooled Packages
- Higher System Power Density with Optimized PCB Layouts
- High Volume Manufacturing Capability with Surface Mount Footprint
What’s New? Advantages of New Top Side Cooled Packages
Most standard surface mount discrete power semiconductors remove heat through the bottom of the device by making direct contact with the power circuit board (PCB), which utilizes a heat sink or cooling plate attached underneath. This method is common across many different power electronics applications, particularly when size and weight requirements do not limit PCB mounting and heat sinks.
Top side cooled (TSC) devices, on the other hand, dissipate heat through the top side of the package. Inside TSC packages, the die sits upside down in the upper portion of the package to allow heat to flow directly to the top surface. Generally, TSC devices are best suited for high-performance applications such as automotive and e-mobility systems where high-power densities, advanced thermal management solutions, and small footprints are essential. Within these applications, TSC devices help address cooling requirements by enabling maximum power dissipation and optimizing thermal performance.
TSC designs also allow for dual-side usage of the PCB since the bottom board surface is no longer needed for the heatsink interface. Removing the heatsink from the thermal path not only creates an improved overall system thermal impedance; it also allows for automated assembly, which can increase manufacturing throughput for a more efficient and cost-effective solution.
Evaluating U2 TSC Devices Made Easy with SpeedVal™ Kit
Wolfspeed’s SpeedVal Kit Modular Evaluation Platform allows engineers to reduce the transition from silicon to silicon carbide (SiC) with a flexible set of building blocks for in-circuit evaluation of system performance at real operating points. The recently released 3-phase motherboard enables high-power testing with static loads as well as a foundation for advanced motor control firmware development.
Evaluation boards for a variety of Rdson ratings for Wolfspeed’s TSC MOSFET devices are coming soon.
SpeedVal™ Kit Modular Evaluation Platform Three-Phase Motherboard Putting U2 TSC Devices to Work: 13 kW Automotive HVAC Motor Drive Reference Design
Wolfspeed’s upcoming 13 kW motor drive reference design, featuring the TSC U2 package, demonstrates the benefits of U2 devices for 10 kW+ EV HVAC systems, which support thermal management of the cabin, battery, and electronics. Optimizing the efficiency and operating temperature range of the HVAC system with the implementation of SiC enables systems designers to bring fast charging to the driver in under 15 minutes, while also extending the driving range per charge for the lifetime of the car. Utilizing Wolfspeed’s new CRD-13DA12N-U2 13 kW HVAC reference design, SiC enables:
Reference Design Specifications:
- Input Voltage: 550 – 850 V
- Max Output Current: 25 A
- Max Output Power: 13 kW
- Switching Frequency: 10 – 32 kHz
- Peak Efficiency: > 98%
Original – Wolfspeed
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Wolfspeed, Inc. announced its results for the third quarter of fiscal 2024.
Quarterly Financial Highlights (Continuing operations only. All comparisons are to the third quarter of fiscal 2023):
- Consolidated revenue of approximately $201 million, compared to approximately $193 million
◦ Mohawk Valley Fab contributed approximately $28 million in revenue, over a 2x increase from the prior quarter
◦ Materials revenue of approximately $99 million – second highest quarter on record - Power device design-ins of $2.8 billion
- Quarterly design-wins of $0.9 billion – 70% related to EV applications
- GAAP gross margin of 11%, compared to 31%
- Non-GAAP gross margin of 15%, compared to 34%
◦ GAAP and non-GAAP gross margins for the third quarter of fiscal 2024 include the impact of $30 million of underutilization costs, representing approximately 1,500 basis points of gross margin. See “Start-up and Underutilization Costs” below for additional information.
“We are pleased with the significant operational milestones achieved in the quarter for Wolfspeed as we continue to be the world’s first fully, vertically integrated 200-millimeter silicon carbide player at scale,” said Wolfspeed CEO, Gregg Lowe.
“We are making progress on our Mohawk Valley ramp, more than doubling revenue sequentially in the quarter and reaching more than 16% wafer start utilization in April, giving us confidence in our ability to achieve our 20% utilization target in June 2024. Construction continues at the JP, our 200mm materials factory in North Carolina. During the quarter, we started installing furnaces and connected the facility to the power grid, and we recently hosted our topping out ceremony. As we’ve said before, Mohawk Valley will be the flywheel of growth for Wolfspeed, and the JP will be instrumental in supplying it with high-quality materials. We are encouraged by the operational progress these facilities have made and how it will support our long-term growth trajectory.”
Lowe continued, “While there have been headlines around general demand weakness in EVs, we still have more demand than we can supply for the foreseeable future. Our second highest quarter of design-ins to date and more than $5 billion of designwins so far this fiscal year, tell a compelling story. While the industrial and energy end markets pose short-term headwinds to our results, we firmly believe in the strength of our long-term prospects as the electrification of all things continues across a broad set of applications.”
Original – Wolfspeed
- Consolidated revenue of approximately $201 million, compared to approximately $193 million
