United States securities and exchange commission logo
May 10, 2023
Neill P. Reynolds
Executive Vice President and Chief Financial Officer
Wolfspeed, Inc.
4600 Silicon Drive
Durham, North Carolina 27703
Re: Wolfspeed, Inc.
Form 10-K for the
Fiscal Year Ended June 26, 2022
Filed August 22,
2022
Form 8-K Filed
January 25, 2023
CORRESP filed March
24, 2023
File No. 001-40863
Dear Neill P. Reynolds:
We have reviewed your March 24, 2023 response to our comment
letter and have the
following comments. In some of our comments, we may ask you to provide
us with information
so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your response to these comments, we may have
additional
comments. Unless we note otherwise, our references to prior comments are
to comments in our
March 10, 2023 letter.
Form 10-K for the Fiscal Year Ended June 26, 2022
Note 2 - Basis of Presentation and Summary of Significant Accounting
Policies
Segment Information, page 54
1. We have reviewed your
response to prior comment 3, where you state that the CODM
receives revenue and
limited directly attributable costs at the product line level. Please
describe these costs in
detail and quantify them. Please also tell us why these costs are
provided to the CODM
and how the CODM uses them. Finally, please tell us whether
these costs are
included in the budget the CODM reviews, and if performance against
budget is assessed at
this level.
Neill P. Reynolds
Wolfspeed, Inc.
May 10, 2023
Page 2
2. You state in your response to prior comment 3 that revenues are
available by market, and
that investment decisions and resource allocation are, in part, based
on the markets in
which the company chooses to compete. Please tell us whether the CODM
receives cost
information by market. If so, please provide the information requested
in the above
comment for said costs.
Form 8-K Filed January 25, 2023
Exhibit 99.1, page 7
3. We have reviewed your response to prior comment 5. Please address the
following:
Provide us with a breakdown of the (i) project costs, (ii)
transformation costs, and
(iii) transaction costs reflected in the non-GAAP adjustments you
presented in
reconciling your non-GAAP measures for the fiscal years ended
June 26, 2022 and
June 27, 2021, respectively, as well for the nine months ended
March 26, 2023 and
March 27, 2022, respectively. In your breakdown, identify and
quantify the material
components of each of the three groups of costs.
Describe to us the nature of the specific costs included in
each group of costs.
In particular, describe to us in detail the costs that comprise
the internal
transformation program costs for which you have adjusted your
non-GAAP financial
measures.
Explain to us how you determined that the adjustments related
to each group of costs
are appropriate based on the guidance in Question 100.01 of the
Division of
Corporation Finance s Compliance & Disclosure Interpretations
on Non-GAAP
Financial Measures.
4. We note you adjust certain non-GAAP financial measures for Loss on
Wafer Supply
Agreement." Please describe to us the nature of these losses, and tell
us how they relate in
anyway to the $31 million liability you recorded at the inception of
your agreement to
provide CreeLed with certain Silicon Carbide materials and fabrication
services for up
to four years. Tell us whether you expect to continue to record
additional losses beyond
the liability that was initially recorded and is now fully amortized. In
addition, please
explain to us how you determined this adjustment is appropriate based on
the guidance in
Question 100.01 of the Division of Corporation Finance s Compliance &
Disclosure
Interpretations on Non-GAAP Financial Measures or tell us how you plan
to revise your
non-GAAP financial measures in future filings.
FirstName LastNameNeill P. Reynolds
5. As a related matter, please support your conclusion that the losses on
your Wafer Supply
Comapany NameWolfspeed,
Agreement Inc.
should be presented outside of your cost of revenues and
operating loss
amounts on
May 10, 2023 Page 2 your statements of operations.
FirstName LastName
Neill P. Reynolds
FirstName
Wolfspeed,LastNameNeill P. Reynolds
Inc.
Comapany
May NameWolfspeed, Inc.
10, 2023
May 10,
Page 3 2023 Page 3
FirstName LastName
You may contact Jeffrey Gordon at 202-551-3866 or Martin James at
202-551-3671 with
any questions.
Sincerely,
Division of Corporation
Finance
Office of Manufacturing