CREE - Earnings call transcript Q4 2021

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Operator

Good day. And thank you for standing by. Welcome to the Cree, Inc. Fourth Quarter Fiscal 2021 Conference Call. At this time, all participants are in a listen-only mode. there a presentation, session. speaker's the will question-and-answer be After conference advised recorded. [Operator be today's is Instructions] Please that being [Operator Instructions] President I'd over to now like to speaker Tyler hand today, Gronbach, Vice of Relations. your Investor the conference ahead. go Please

Tyler Gronbach

supplement with to section quarter Investor XXXX. Thank you, and presenting the Neill our Lowe; directly conference is should not and prepared press afternoon, make the everyone. Reynolds includes Gregg posted year Please will Today, may considered forward-looking are and CEO, numerous fiscal uncertainties. release statements our Cree’s the financial measures the website full our fiscal forward-looking discussion metrics. during results fourth Cree’s Cree’s for call. Welcome call. and XXXX information a to non-GAAP good fourth year CFO, report we of on about most is reconciliation be accordance and Such risks quarter be a with key Relation’s other for be with results A during management along note Cree’s to by which will the that may Non-GAAP and comparable accordance financial today's call, information provided outlook not other consistent measures statements not of business we forward-looking non-GAAP statements in in GAAP and Today's in how companies. statements other a to comparable GAAP GAAP. substitute subject of summary Non-GAAP with and to results on results historical internally. are

related could differ in factors the pandemic. of release release today noted cause materially, to mention results the impact that and COVID-XX press actual Our the to the including risks filings important SEC

as yourself question ask during so session, possible that one During questions today’s accommodate can you would follow-up the as call. to many we one limit that we and Q&A

after call any questions, And to Gregg. feel like us the the turn If free over to with you have to please call. I’d connect additional now,

Gregg Lowe

am our report end in quarter, you diluted fourth Thank and with guidance everyone. high drive during guidance good and to pleased in I and we continued of for Thanks, I our Tyler, to delivering and hope and you execute share are the joining that families our range health. your line today the non-GAAP afternoon, us range. strong earnings at business, per revenue good

As well excited our the company we our officially are industry the to play the to coming company lead of transition we as continue pure we months. our Wolfspeed positioned in transformational a to represents carbide. journey are now to This stop a semiconductor from powerhouse name silicon in history global pivotal change silicon

to We went fiscal world's installing equipment of first we fab largest begin New carbide Global During calendar from will our half in divestiture processing room We progress. LCD of wafers XXXX. XXXX in made moving the dirt business Smart upstate silicon XXX York the clean in formidable which the to completed the Holdings. of millimeter

a as silicon in carbide that of opportunities developments the solutions our we important factories range with staying achieved These on quickly keeping growing the at of acceleration industries. are We expanded same campus. XX many operating of our last demand running production wafer for convert just the of we a Carolina and customers while device the And finally environment few our crystal months the global time in see because pipeline. new our based capacity to adapted connected also North we to across growth pandemic an the

our our to leadership Neill? investments and an to shift outlook. the Neill, we position. the fiscal of silicon well We believe are originally our industry long-term demand is at secular a today are bolstering confidence financial XXXX. expected will it multi-decade carbide curve now over quarter the making firmly establish on than The beginning first steeper for we capitalize now our who'll we the tremendous ahead outlook overview results in an position and devices provide of for and to opportunities of turn us I'll further

Neill Reynolds

and for representing you, solid were results as for year-over-year. we Gregg, delivered of fourth good fiscal fourth and materials. of everyone. of the afternoon, and saw increase X.X% increased our midpoint devices during above XX.X% slightly quarter quarter the guidance We Thank million, $XXX sequentially Revenues XXXX demand range, the an

midpoint the range. loss guidance net non-GAAP $X.XX share per just $XX.X was million diluted Our of or above our

a transformation acquired quarter on of or value fourth million $XXX the to our costs, diluted exclude non-cash long-term items notes, amortization, earnings $X.XX in non-GAAP tax intangibles investments, of our our compensation, held a portion transaction plan earnings modification in of project restructuring Durham and changes previously net Our expense for stock-based optimization convertible related accretion release. per share of other a outlined and regarding campus a ENNOSTAR today's costs, of expense factory

consecutive fourth for Moving sequential quarter we our growth by out quarter to line, product our Wolfspeed. fourth of delivered performance

the the XG saw been strong the local our with demand down restrictions product to strong by days line the due XX% shut staffing carriers. we see the of due to We device demand increased the supply but outbreak facility operating the Power communications providers related levels manufacturing temporary for approximately to seven grow year. due continue largely RF production in in at COVID-XX use activity by lower support in Despite Malaysia quarter was as offset contract which to partially closure imposed was by rollout continue to government. revenue infrastructure power due prior increased versus the revenue and In during challenges to constraints the pandemic has the Malaysia

the the of costs short compared decline products saw in our not-GAAP to was back in quarter the quarter. expectations [Indiscernible] of due our XXXX. order fiscal XX.X% the The to due term. last materials Fourth consistent and for flow half unfavorable we growth higher sequential primarily margin quarter device XX% with gross was For that margins our to manufacturing

Malaysia gross margin production in In our manufacturer negatively being addition we by in lower the resulted range. at guidance impacted of our the were contract end which shutdown at

transitions footprint to in modestly sub optimal we As as the going production Non-GAAP non-GAAP margin device impact we Mohawk year in improve discussed forward to eventually to new expenses due short previously fab rate Carolina was the for factory production we QX tax expected operating our that in view shift through calendar $XX work North as have and and gross and nature term Valley our XXXX. Mohawk were XX%. million

in fueled an we sales including increased As expense opportunities. by new XXX that operating underway well are investments increase at our millimeter line R&D wafer pursue expenses to support marketing in as at development anticipated as was our the of pilot as our Mohawk order launch Valley business projects well our

During business facility the million is write-down quarter, in to for built the viable we LED an also longer no unfinished to was which our XXXX support back support future recorded plans. a $XX growth that

to strong of convertible $X when due billion. net line revenue with We representing diluted For fiscal $X.XX approximately or quarter $X.X in support a XX% strategy, with diluted our net increase and our liquidity ended growth was million $XXX.X a our a loss per by operations excludes of in compared XXXX to was from with per fourth loss offset share. $X.XX withdrawn $XXX healthy sheet growth million, zero and device face in revenue. of credit, adjustments to million partially materials continuing Non-GAAP the value or debt businesses, fiscal share. XXXX, lower $XXX Non-GAAP balance of billion tax total

were on For million, and negative fourth flow million. resulting sales million quarter, XXX days generated $XX XX from $XXX $XXX was and was days expenditures days. capital days outstanding inventory negative hand Cash cash in free was operations of

a XXXX in $XXX of fiscal expected, As a net significant investment amount CapEx, totalling we required million. amount of

and execute expansion plan our We our the of Mohawk including expect this significant XXX Fab half in period XXXX we as the the most launch capacity to XXXX. investment Valley between at represent first millimeter of now of

customers a Valley experiencing facilities devices COVID-related In with contract significantly low online silicon meantime, not CapEx improve in manage inventory orders channel levels fulfilled has mentioned are our carbide Greg the comes our previously manufacturer and As capacity, to for the we had challenges working fiscal for Mohawk and investments, constraints, Fab. our year our earlier, in will output capacity remain Malaysia. supply demand derm accelerate be through customer will from in until resulted This curve we anticipated. in XXXX than some steeper we’re

our As and we we expected reimbursements both New remain the York CapEx $XXX in of net for wafer midst of materials fabs, rapid to approximately capacity XXXX. million a state the expansion of in fiscal be anticipate from

fiscal to first ensure to the heavily the peak of the with at half as on We track. we investment expect QX remains year Mohawk Valley period a representing weighted ramp be CapEx more

semiconductors and steeper first of ramps we and the the We on experiencing devices. is carbide calendar for schedule to year to mind XXXX. operationalize silicon of that want in still meet to largest our now the be Access given capacity are for demand are world's half of ready top customers we that many to fab

turning are in first to our $XXX million. $XXX the of revenue quarter fiscal to we million XXXX targeting Now the outlook, range of in

ramp COVID-XX by the lower current activities Malaysian recent and revenue to the outbreak. power by driven some contract expect supply be following continues We offset to and momentum the constraints manufacturer productivity partially our as

through in are Our higher XQ Durham QX challenges. COVID-XX-related in is a gross which range Malaysia XX.X% as to versus team margin improvements of to non-GAAP modest slightly site the is be works up in XX.X% as by expected flat to costs productivity offset

second noted, will anticipate our for until to present and increase fab. non-GAAP million. ramp operating derm We're lower including transitions and startup Valley. to in QX for start our margin which expenses Mohawk in at million to Durham R&D XX% operating ship support We challenges $XX production yields plan net quarter, now $X fabs present target expenses be $XX and these approximately a million non-GAAP costs reporting the loss at million the be We Valley as of costs continue Valley performance our in related we loss XXXX be will more growth costs cash at. will to to wafer up $XX will previously our yields continue related billion $XX we plant our approximately As in fabs The will some millimeter headwind short-term anticipate ramp half startup our launch. and fiscal of is in We than we be incurred fiscal new of and quarter. Mohawk be first of to year transitions XXX Mohawk between gross this on factory operating to remain factory million $XX targeting due Starting qualify operating to will the to XXXX costs. sequential to

XX%. $XX $X.XX to million between million tax non-GAAP or net loss diluted to non-GAAP loss share. $XX per We We're $X.XX be targeting QX approximately expect a our to effective be rate of to

non-cash, stock-based convertible notes, costs, accretion transaction amortization, factory intangibles non-GAAP related Our acquired compensation, on restructuring EPS and LED items. excludes costs target acquisition project transformation a other and

including productivity are QX now demand, factors overall COVID-XX, with back based mix, turn on competitive I the Our targets Gregg. and environment. vary several With the will to discussion could greatly that, the product situation factory that

Gregg Lowe

Neal. Thanks,

As time, and quarter year, what at performance are the the of interest the has organization. fourth proud good continues and we accomplished. hard very sales work be Demand and commitment fiscal across to of by our same we markets the during full RF industrial team while look automotive our thanks to I'm a very And in variety and energy growing unwavering the encouraged of customers. at

good new now the is solid doing opportunity opportunities uncover and Our converting At is a above billion the pace. the $XX job same pipeline very time opportunities. team to is team that also of a device continuing

than variety energy that During well-positioned a sales systems, performance billion year projects. slightly spread global amazing is for $X residential setting represents during major than more in design-ins design-ins storage award transport. accomplishment our posting billion the an with of across roughly fiscal The record including secured which represents landing the leading XXXX customer of and from takeoff wide highest are team the an manufacturer and of an and the win to-date for a cargo farm tractor, of a team to aircraft devices. applications is while and vertical demonstrates and for Automotive design-ins electric the we posted including compete full quarter in design-ins $X.X XXXX X,XXX approximately rest automotive electrical more thirds a passenger two and fourth by QX total this design-ins we

for Our fiscal us give further achieve silicon $X.X ability billion steepening confidence revenue and demand through our our in massive curve carbide pipeline and of design-ins for devices on the beyond. target record to XXXX XXXX based

XX% long supported and gasoline new emission gave be approval by levels continues Looking to that to their Law free the some The removing cars a targets make legally Commission see environment towards binding. On term the Union vehicles block’s recent encouraged the XXXX. the requires countries target all indicate them macro developments for to XXXX growth. released greenhouse to Last XXXX to net gas Climate selling or by our eliminate XXXX, law European to final we're European sets including climate EU reduce XX, any several strategy new July its flexibility to effectively diesel continue hybrids. by emissions from to emission be completely agenda, automakers by which month

time XXXX. to This White In order many to their fuel at addition, increased to setting electric and production plug-in for up ago, as commitments a have US XX% cell ramp comes up executive House their vehicle same issued electric hybrids make a the vehicles, to automakers of the an few action weeks activities. XX% to by make - US target sales hydrogen

this earlier autonomous most instance, plans the Carbide billion automotive XXXX, General its adoption and to forecast. spending across to several A other summer which recent element increase expansion vehicles the boost increased announced through manufacturing to industries key XX% sector vehicles Silicon electric of of the For in capacity. on $XX Motors over its is support is global a and

the expansion in to operations operations track our runs leadership XXX-millimeter Valley begin XXXX. the part qualification customer in increase on our to On materials well materials announced of capacity of Mohawk build leads me. retirement facility And visits the is Rick Durham, campus, very during the building up operations a oversee Mohawk McFarland next planning fab. support directing has fab first few to expanded us announced On shown activities weeks campus the the here recent back ago team course is quality by to Durham nicely production Our second summer company's will the shaping the and with our assist on plan our XXx. fab to to half calendar of is a a which we The note previously our device and will reporting summer who will related expected currently leadership When facilities will responsibilities for along to operations. the efforts operations. Rex company’s of end Felton, continue and Valley he growth of all leaves and is Rex currently directly global until materials assume Rick with operations who lead we Rex next procurement and retires functions and global transition. Rick now

organization. manufacturing continue the Texas In the in us addition scale to last joined Recently President Stigall building to in Missy we the talent she attract years was here as spent recently Fab expertise Instruments Carolina. Operations Missy North large leadership serve most with of Vice operations. extensive incredible to XX new where

contributions their the XX front Additionally and our are successfully Business Finance joins drive for Missy, we next roles. part investments Operations. demonstrate continuing commitment that of shift new Finance continued technology ability recent interested in in space Rick organization power wish Laura are as in I'd of attract to success of continued make keenly semiconductor this for was Laura Radio now while Russell talent and the and the who thank helping marketplace. on our to to the to his opportunities in electronics most These Rex, our Laura in to years recently paradigm capitalizing team like for additions in deliver in Global and semiconductor customers. is In today, generation of us summary us serving Unit. retain NXP where folks she VP Power experience top from VP further Laura industry has and. and to the over for

by device are share billion winning growing We fair $X and our as pipeline of our design-ins. recent opportunity evidenced the with quarter

operations. Our sheet support balance our remains healthy to

share We originally are to In to hold a to as we I'll strategy operator an detail begin steeper what to the exciting the and expand our strong further necessary to position we've With over New Investor than curve be long-term excited outlook. on silicon devices. about can investments late about Q&A. we future believe turn the for transformation address demand and in fall, Day leadership made and York it carbide make progress more our now we that, the we plan expected discuss the prospects

Operator

you. Thank

from Our Jed the of comes line first question Genuity. from Dorsheimer Canaccord

Your line open. now is

Jed Dorsheimer

Thanks for business design-ins. of business and the pointing Kind material of expect that partners can probably some in the your particular think I we XXXX terms you along think position I clarity directly on side in give should and Wolfspeed first my device your models platforms well and follow-up. pretty and about your the granular of sums guess model I have or out bit the year side that of fee how the a we up the MOSFET might automotive those billion of the more or dollars If see design-ins is more in grow. to of in a many lines, and us question then that terms either with

Gregg Lowe

Okay, Jed.

to are just all about talk billion call opportunity all design-ins device everybody pipeline pipeline. $XX of remind the $X device design-ins on we and billion is So opportunity that the the

we the with two-thirds everybody automotive. years, remind So goes design maybe be four clear. of I going know recent on quarter, is wanted was from that And $X I know it billion you typically billion mix that but just years I when this know posted to we five into when timeline posted don't the get Basically to you typical a the around it think sometimes. for production into we basically materials. dollars that that the that you

bit that. kind know we're a vehicles, obviously why seeing of turning a out than shorter And little you steepening it's ramp. that's electric For be to

data XXXX a originally And I steeper that is being and billion you the trying that's than handy have is that demand of now are catch models from be customer ramping, the we've that we here and number -- we're are Jed. steeper a got of that give that's that right that's going can a are supporting just to and what as XXXX. obviously to I I we're number So, in different tell the There's what you $X.X to referring with. then customers don’t But what ramping a right exact in that up right now. ramping anticipating there's can't

Jed Dorsheimer

in to Got this are it. better that maybe And sort be for keeping asking you a bit you've out targets asking that not keeping able of shift I on just and I it's XX% in guess I'm might a follow be for lot Thanks. materials been clients gross touches was for normal. from of And in Gregg what Neill. helpful. my that if or us a I of or to up also out that Maybe of the terms is there. to the gives what help new That's devices long-term XX% assuming of you wondering minus your terms whether might this know XX% too. the bridge And confidence margin. you us understanding you're plus Segway was where the a while

Gregg Lowe

Jed, for the Yeah. Thanks, question.

X and from margins you the as were a at Malaysia XQ think XQ situation. about the look I by current point in impacted

kind year, a at point in And Malaysia. of normally. have normally. would So if I kind a And we you in if been things think us of be function play from think down the quarters have out rest where I both X where of how would as that you margin about the think you driving look of would look about think been at the I we

plus discussed half management you achieving if execution, bring you kind If think, you and or mid-XXs, to should of out you back and to of we'll - And long to the year, - and back of factory some in fiscal a changes know, you to I need kind know, what experience - back minus think, in that's of we know, as I improve step the of levels just Carolina term, I the of our shift know, those it year. the North about if on or get the long-term high-quality model. to half would you drag of the to hit target think expertise as as of mentioned, kind mid-term of kind the you’ve more kind you of think

XXXX. we we to as plus we'll what what North transition For kind qualify kind heavily in fiscal that key about know, low-XXs plus new significant from - of the today previously, Alley. to transition know, we’re from the and begin like and of And stated running XXXX where Carolina as very that we're to think be Mohawk Mohawk XX% XX% cost transition by today big of gross factory of if and margin the that XXXX footprint that beyond, the at in Carolina of you North kind from and of on And fab you Valley. differences footprint, in kind and will some running you -- between see in kind

just me further bit spell detail. Let in a that out of little kind

think you in between in for will if -- Valley, you greater what costs currently that have. that's if in not wafer of completely than XXX be XX% from lower XX% we millimeter think millimeter and Carolina Durham. will than be XXX including have North Mohawk Mohawk and Valley more change. than Cycle what of the instance we I or times Mohawk full differences Valley the diameter moving to benefit And better

will the higher than be we have better XX points - XX% XX% what currently then have XX points in than we to in So Valley in sorry, Durham. yield Mohawk lastly Durham. XX% And to what

we small good footprint move the Carolina moving as those anticipate know to then, would And as Mohawk running into heavy highly Valley line be that pilot transition know of you in you New really up I state-of-the-art facility kind know from, think a of to from North function Mohawk a margin a So we've news you in from Carolina a that evidence very we automated, derived Valley. seen as know already you all of - of at benefits support is somebody North manual a and be York. And can insertions.

Operator

you. Thank

of comes Charter from Our from line Edward next Snyder question the Equity.

Your line is now open.

Edward Snyder

materials said it you but Malaysia, space building yeah, footprint in safe the growing Durham your an given of throttled kind not on Gregg, you've in was Thanks. I which or in nicely. to very Is devices for only know execution. second materials that New give a as case to revenue? maybe your be on else or just… grow there that the - can something on continues I percentage of the assume expect total maybe York comes until we it And is would going

Gregg Lowe

Thanks, Ed.

So we building on are expanding different into a here campus.

be device the Ed? just of I we that that our business that know here would fact, wins for likely what that with wafer facility factory. happening you business Carolina our And expanding sense, In will this a ramp for campus be know million fab so XXXX. materials on going through also and And most our is going million million would than devices. out that previous XXXX to as to devices. million just be -- obviously of percentage as we quarter. growing $XXX we're customer about anticipate $XXX today. went look billion anticipating make as North start in are the billion me posted the the through at projecting going roughly the be that is timeframe we materials here will device $XXX accelerate seeing I of was beyond say of Does that faster and materials Actually we that I'm the And I move our be $X.X sorry was well. was -- is first Jed was we the $X And that of going as were excuse business that of devices when for LED we to will it to that you XXXX $XXX Ed, business at plans

Edward Snyder

faster. New Yeah device it to is going makes on much comes grow sense. York Once

Gregg Lowe

Yes.

Edward Snyder

the low It's of egg on sell even that issue. a is got and demand I you've demand mean sales and lot a there potential a obviously a food out some well there. kind But based here of got quite some chicken calls on still Will are a we've talk out increase know press there of from seems of lot an know got folks The on been out a of about are a ground. though degree releases who a GTA doing RF shipping of talking the SD the of lot it of industrial business millimeter Infineon’s largest. to the SD from it's seems internal efforts XXX quite you’ve and hearing kind especially we've chain reality that to micro like concerned too. be and on you there's limited a really micro announcement is of the been stuff. I materials what different agreement coming made about lot bit

got ROM the You've wafers people demand long in $X.X in crystal term it's dynamic billion or board say the is and maybe Has [Indiscernible] or million more come seeing $X.X competitive are about both epies because bare And wafers agreements. favoring materials strong? so supply of bit changed is we much. if it has to little incumbents safe it is the on it

Gregg Lowe

perspective for there say I the opportunity in what would growth Ed carbide. is our think is a I huge No silicon certainly from

of lot tough to attempting this pretty can't meet of our And barriers into folks money. but a kind just it has business to so see lot technical a and entry that of you you get solve yeah with barriers

the to fact capability. you business. materials this talk we've to So in to work term think we we've solid that is $X.X our is And of customers, got know kind them long pretty really supply pretty market. you to of this for much strong that know got I area, on worth fundamental a very, light know, with very know in who’s this with a difficult agreements of who very, as And the really some -- And with. thing stuff very important billion

laurels. what are our - and we is, absolutely I then on would So finally not resting say we

whether our is In activity improvements quarter of every capability, that intense a very XXX millimeter materials it very, for in all that's reductions of the single transition to us. terms stuff of drive kind we cost, in yield,

try got rapidly to years - silicon it's -- as basically, learning creating is jump difficult scale and learning the scale so we're carbide. and for important an environment scale that to largest We've pretty you an know, really of And just XX more into growing now and because, even and well.

driving So going day barriers entering to going like really I create on think have at all. for - market. kind it's just that of rest But - week. those for crazy every tough continue to it's every again, We're we - the of don't to this

Operator

Thank you.

from comes of Moore next from Our Joe Morgan Stanley. question the line

Your line now open. is

Joe Moore

you that fiscal fab. in in if rolling mentioned out see wonder margin that how could costs $XX XXXX the sort about of you higher and to of overall lot the -- you I do fabs have is startup cost what know, you coming of you Just in? you you. second new of maintain sort to incremental these do level Thank But Great. grow a talk the both to half obviously, general, through? -- costs revenue the and a of to into some million, Do sales? your of happens support

Neill Reynolds

Neill. This thanks for is, is Joe, the Hey, this question.

the cost. was than being that think all, for of startup Mohawk $XX anticipating million, that, of And the year. the And $XX half so year. in of was cost, about in, in back about more we’re So, roughly XX% Valley can of cash yeah, first kind you it of that million

to as So, we you’ll move to that start fiscal they'll start see significantly year fall fab. And into start as to ramp you pretty XXXX, away. off fall

I it. think, it's there’s in think to change think with very plan. think much I our about, don’t don't I any real I line it's long-term So,

anticipate of think up has this a I me factory. as let new you it kind bring

where to track margin look hit to. fiscal the on yield said, revenue. what pretty Mohawk as and I to I revenue again, cost bring as underpin think today where of will we $X.X differences bring is currently anticipate, to fab you that the, trajectory need, get in between to anticipate start with time you this that all right we XXXX, in at as you the to start need up think the out Valley, need that, numbers, seeing it's in billion into we And as look the So, and significant the for you more line And year on. into differences in we cycle at seeing significantly then XXXX, you get as we're what the we transitions

Operator

you. Thank

Ferragu next from Research. Street of the from comes Our New Pierre question line

line is Your now open.

Pierre Ferragu

Thanks guys. question. my taking Hi, for

impressed how season was how end XXX reiterating Micro this front-end people increase I to capacity And earnings talking mean silicon to they SD many actually and been about I've carbide that and are. very between in XXXX. the I mind had So, by are front see XXXX and want I comments following positive

billion $X capacity but and Infineon was on between the in Silicon is think about spending about Carbide that a I growing [indiscernible] XXXX. talking talked CapEx not over Xx specific decade. [indiscernible] XXXX

up and what terms up capacity potential these like And you one stacking top of too you market so does forecast very you there I compare do stack difficulty taking terms you players that and might how your scaling other potential in the and and first was feel -- guys whole be well in underappreciating up being their fair are or which is into do my that players what market in and what as you question guys of healthy public the you guess to planning you’ll out. as is a following level of made the Gregg, the maybe for my and of some that silicon optimistic question markets share end and when add three you getting to you, a think see delusion you by to and you see to be you see competitors in thing are winning, of closely and carbide them the well when of all demand

Gregg Lowe

vectors. from guess different I'd of couple that answer Yeah, a I

originally a we that. customers the what across thought than they was originally of going indications saw carbide it ago demand definitely and automotive the First and or there off, -- thought It's of weeks now the equipments got with different and and for the they end faster a we pretty OEMs they and silicon much part pretty so for Neil what Tier is continues appetite I is forth to key demand. couple grow. were of be certainly a visiting month being with just just in higher than Europe from thought the and all multiple to all so Xs and and

So, expanding, the definitely rapidly I thing. think a demand good is that's obviously

from long-term we're the And our the billion materials of perspective a area. point growing of in pretty I think In materials $X.X obviously have. market capability that terms strong itself, one we that agreements

But think that do of just to know internal know maybe originally hard long-term it's we you do of bit efforts. I that challenging than billion to I and stuff most it's it's think little with are have an a an trying you people kind more everyone think. indication indication worth of $X.X a that pretty this lot agreements is people

quite So this thing lot the and talk say I to I having capability would one that experience a is about. customers I think having

they the most making time us. that's you has know silicon longest You to look it experience amount this in carbide, of been it is the that when the for transition at company know in

kind light that you by internal XXXX to know longer And know mean, you you so, cars the -- that on no tipping know know any is, capability. it's kind you XXXX, the a -- And internal it well. automotive combustion demand said as are past the developing And entering of a has right me way market are we're But are grown. that there of obviously you point are seeing I know feels industrial the I lot does so think has someone it that plans shine any certainly engine. like us. know other of of now goodbye to It's you number now. folks market the has forth combustion engine companies the for and customers. And just

electric cargo, about compressors. we know and You transport, talked landing, tractors, takeoff drives, motor vertical

just you perspective You transition customers know or that operating on forth and is the seeing a lower silicon the mobility equipments these to of times this lot carbide the XX they And so from electron of industrial XX bandwagon. electron performance costs see know jumping for the mobility’s times energy benefit the were you when pretty solid.

Operator

Thank you.

from of Partners. line Our the next question ROTH from Craig Irwin Capital comes

open. is Your line now

Craig Irwin

about and your we this haven't last their prior of Analyst I my had don't the some a lot discussed since equipment. bit to that or their Good MOSFETs. before remember was evening. Day powered whole from the one we that the who the congratulations if about potential utility gentlemen and industrial on a a there of high MBB, about was Hi. couple ask it conversation Impressive. in market And some of -- I talked Gregg, something for is momentum. little on design calls. Thanks taking the wanted questions

I the the you you Can think us X,XXX-volt Is know you a or for markets development X,XXX-volt, that's frame outlook? the and this you this how priority these the future in rank XXXX maybe that guidance MOSFETs. And us? out know. importance of would you to for XXXX, available devices as give You industrial there?

Gregg Lowe

very, know fragmented. question, what with you a tell different the Great industrial is TI, really would it Craig. obviously very And it's you one is about market I have experience. you my at very that's of ton with thing you know that And know I time the

of thousands customers. have You

relatively packets small different very that know win individual You individually, you're the to all collectively very, large. trying but it's are

they relationship with we got partnership us. a the this have relatively engagements engage with and real with of with They’ve customers there to Arrow we for very, different and, where well are, their sales an gotten small We’ve them. with And a has thousands the have massive ability really customers those footprint, since played so, great have. is very channel that is we key having

how we and on relationship to ago month-and-a-half of each take subject the out continue other's and the fact, think, do other we with meeting Neill do and gone some and, next How great. our I them capitalizing of line executives It's was progress. that there In and level. meeting already were this I the building

very the market in that. reach got a good And And great it's very is we've for a us well. news So, very, that's going partner us. important helping

then that, to I XXXX of gives of steepening seeing plan. baked into the comfort for it think trajectory relates beyond lot the us the Gregg. as But we're XXXX, growth and demand a kind looks that what it into like it's obviously, beyond

Operator

you. Thank

Our next Sachs. from Lee the from comes Brian question of line Goldman

Your line is open. now

Brian Lee

just then Does are those you I your it's One Neill, through, Hey, Just than of costs? look clarify, in that inclusion you, XXXX flowing questions. had of mentioned the all guys. Is startup the up. Good costs XX.X for assuming a it’s flowing gross reflect we taking more thing out? follow to I XX.X $XX all those stripping at here. in when the back that due to margin fiscal through to cogs, half QX that I'm Valley wanted to afternoon. Mohawk non-GAAP wanted of that and guidance, Are the Thanks you and for clarify half ramp. with startup million

Gregg Lowe

Brian. No. No. Good. Good question

of a revenue. current base a complete at with is related our Just you build just cost But just our clean be about non-GAAP costs fab clear, we're or depreciation are and forward. to there'd like be you into represent other facilities know to point to we're the those And that labor going to lot things the got and room. know and going things the results of exclude where running from up going those we

year kind a the out of is of we’ll forward it to based the as Durham more give what going for in which those as the gets kind view markets just fiscal XXXX. of look see of margin like business perform it better So, progressed a kind year of model I

think ramp year year we any about apples-to-apples the it that from start phase. You next qualifying past of up kind first kind as of an basis we'll half fab ramping the and start forward going there, once of in of then we bleeding move and calendar that

Operator

you. Thank

from Our next question of from Chatterjee line comes JPMorgan. Samik the

is now open. Your line

Samik Chatterjee

for questions. taking Thanks Hi. afternoon. Good my

couple. So I have a

for XXXX follow it in about how this of Thank increase year as to Mohawk XX% I fiscal similar look you. well. up you I half does Like this And second how And be how -- in it? or see like bit versus can me visibility compare about the give one to how the what if Mohawk more will first wanted to year see that? to fiscal and materialist a half, revenues half. if again have The XXXX you more different the but half material a we and first

Gregg Lowe

question. for be And Thanks let Mohawk Valley. on just please me Yes. the clear

March XXXX. with you of And half what So year we're about going it beyond out then internal qualifications into and June going period, the you you kind of ramping Valley means calendar the customer part know year that fab this in to qualification transitioning first that. the it’s you Mohawk then as in of think calendar certain that at know about get quarter, as that to thinking doing revenue know in is be first moved you start to and now

think, of we bit this if is getting impact of Mohawk kind kind clarify that think little revenue I But the So, minimis there’s for on a should to things down few on think de you a Valley. I about XXXX, revenue.

kind how unpack just me this Let plays out. of

You kind of mentioned a few pieces there.

And it were slowed the million by roughly and COVID-XX some unfulfilled that of to in in So, in just in to businesses all, and just we it first of is mid-point continued came looking of the range. quarter, power, left these $X guidance $X quarter you particularly the okay. at accelerate million the back, XQ, as just, the Malaysia. look above revenue of was outbreak demand was And while the revenue

we done million saw, had COVID-XX $X it to outbreak the, our saw, good the growth. in would we we $X manufacturer So, not at pretty been in, And I Malaysia. we saw but that, million for contract have more despite thought

way you another for to in demand QX however, the revenue think million in power, committed revenue another devices situation. could of more $X not the to I to, in baked year-over-year to midpoint continue from continues and we the Malaysia growth. $X strong it so we've probably million looking said have had been period kind particularly strong Malaysia in be to into what of and impact able XQ, at But look fuel forward As to of quarter-over-quarter

revenue with So, as that range we also widened our well.

So, to some again, we do revenue growth. even that expect with good see

kind Gregg think look it's also we earlier. I of of back and little step important that, macro here. that with kind just a of level bit kind at the Now, talked

alone, We way we're carbide demand in that of And fiscal than we'll more we of year increased a idea, unfulfilled the inflection know, all slope is the particularly you customer previously thought. about devices on kind year of XXXX. was this XXXX, you And and relatively ahead dramatically of industrial what you XXXX As has stays know, as broad the demand levels we're $XXX then say, seeing in demand of has steepened a line point, silicon based. And remarks, as this thought talk solutions curve since heard see, right you to prepared now, discussed give revenue into kind the pulling in we seeing an million we and demand This and Investor I'll the couple for XXXX-plus automotive. well. XXXX and Day the questions on timeframe. on or

small. instance, devices our continues automotive you last year. The in more alone For XXX% to relatively know, than a revenue be versus that for QX grew

type really this side device shifted has So, I challenge. think supply to a situation of

North footprint really need just kind current year, just our to running. the drive all that's up of and in we until up more the out this inflection Mohawk way get into Valley and know, capacity you we with pulled demand of to Carolina keep So

really that is revenue - to the pulling the think -- the the I -- weighted seeing period. and design pretty heavily pipeline evidenced the the So in weighted current as markers by now we're to

Operator

Thank you.

Our from line the next Ackerman question comes of from Cowen. Karl

Your line is open. now

Karl Ackerman

please. gentlemen. afternoon, questions have I two Good Yes.

Or remaining secondarily do much my of -- contracts? long-term or we my clarification, that was $X.X first And the saying are it’s you materials more in billion of orders. guess, I materials, today mature contracts For the then how question, -- $X.X billion the just I as is -- a future the curious XXX or but materials - contracts about me about XXX millimeter? material think driven yield XXX on is well. more maybe absence millimeter than XXX on think on is on millimeter of of help millimeter opportunity - Just by the - have

Neill Reynolds

that. take I'll

guess. don't futures. exact of first my I So terms in have of most it is I answer you. for say But an billion, That's the would off, $X.X

I think so know think You that's pretty solid. that's pretty -- I

as a pretty number, you the I'm you close. have sure the we $X.X is it is probably So of don't come we've know portion to pretty have pretty exact but of billion some I still gone but obviously, the substantial through revenue know -- -- that's a

know all basically $X.X really on millimeter. that You XXX then billion and is

So And concentrating just that's we're know point. been really in of the you at focus that our own now XXX millimeter ramping on on terms of this that. right facility then,

Karl Ackerman

millimeter that. know driven If was plans less guess on your Durham. by record may over desire the to wafer my you Appreciate you Mohawk's sooner? you fill or I could to for XXX you for term or hoping expected order are modifications to Mohawk demand expense Understood. by I $XX you. driven a previously need Thank seeing need the follow million that discuss. than fill is it up the I capacity long

Gregg Lowe

Yeah. Thanks for question. the

this. to is there's very First of all very, demand no in The really strong. relation good

know the write you the to building. So down

expanding millimeter know First that currently we've that say as speak. we you solution currently building have a expanding building we let we're actually on and know me than for -- found different we’re in that new campus capacities materials you XXX

going amount So in. there's investment of a significant

to a we that. had shell just know familiar a campus support longer of on business shell. people that’s partially QX We with we and building completed the in as You built needed LED determined XXXX. was back just said are that no A in we lot

plan on assurance with line of down a wafer the derm materials outside either But materials our then of use different look found addition optimal customers, for of materials potential kind side. perspective. expansion of the we about additional supplying capacity And to fab ways think So for a for in the of we’ll derm, lot facility the we for more then, [indiscernible].

Operator

next line comes Our Fargo. Instructions] question from Gary of the [Operator Wells you. Thank Mobley from

now is line open. Your

Gary Mobley

taking we Hey, thinking But, materiality of a constraints of million yet. in limiting the my business, Micro your some you power for about $XXX continue then given going guys. haven’t relationship? XX-K Thanks Or this but know about is and of going backlog your can ST can should perhaps trying just think customer of the as filed terms demand solve to fill capacity those that think that, augment perishable to I your question. million in others And need months $XXX the constraints? capacity being incremental the during been signed that million an about is XX silicon carbide for thinking has material until that shipped back in all have, to last are supply agreements And does you. that about in in to that as can, you $XXX Thank months? it? XXXX, terms XX

Gregg Lowe

And for take Thanks Gary. I'll question, the them.

want on to off, into any get of first a So, our detail contracts of customers. with with, lot I materials don't our

materials I contracts, to if total the vast that in want be probably then earlier is the can just into of I kind go $X.X think agreements I comment to in one specific that the is silicon with directionally be at in talking opportunity, understand we of I you get customers of, would thing And I there's terms - fulfilled. of can the long-term largest think understand of in spent that it just And months, think mentioned a back the still that fulfilled. customers billion, you the our and of of directionally pipeline don't to lot majority of of processing material worth take the the that this way. I opportunity made resonates you know, the world's leave the unfulfilled of can And that to a that. any terms I'd time Neill kind -- course, fab. you a but that see carbide then - I've customer or is year. the And million look go to our And most course will will five that. prefer total $XXX

know, qualifications really be and takes material getting recall the through et really processing will -- then be in they'll We off and XXXX that then going XXXX. cetera, our qualify a lot you of will and material to be demand just

to the years capacity gotten New calendar it, is visit positive factory, pilot getting - see capacity really York We've there, then they you the it customers are running expand that about go begins pilot open. line we've on because in made XXXX. expanding to the line lines recently we see -- transitioning and of to when that. months feedback we coming So a super that getting like sort that now that They had the factory first you decision of part up the know, the is just the it's kind of and kind capacity with ago they online, got two of that we've to five with and think that ready and production as

at is decided possibility pretty in issues and quick perspective, up appreciate product see amount it. you'd I start general customers time and this we're a in say in of things this March few there's investment So of to quarter think pretty and to the think would mud capacity ton that and year in we know, with put field running longer. in with I substantial us least years. be even it's really of doing. first maybe had factory, They they're where and that. we to got a that And on sticking mud of we've in you of kind a a has producing industry the XXXX we of product, will the and a zero addition and of field today be that's semiconductor I - in qualifying XXXX build And two a a

So tunnel the them. investments investments I line are light the I see as of big a think end for and we're the these that they that at said the bottom making

Operator

Thank you.

line next Our of the Bank America from Arya comes of Vivek from question Securities.

Your now is open. line

Vivek Arya

as my taking and Thanks well. for questions two

strong how gross are and right and at curious of you very the you'll is but then as days first have the environment, achieving right the facilities contracts? is and tour between come you For translating producing level tradeoff differently what outlook margin versus I'm you're the certainty XX the your thought the demand doing or what in pricing that versus customers they look of one seeing long-term what signals these confidence the there pricing ago be how that long-term into ask having the

Gregg Lowe

do what in the our Yeah, I deals say materials is I as we well pricing of of bulk long-term would on terms majority as devices. vast think what that's and

set. And so of the pricing is kind

to obviously we have into there. with well. as pretty what's And as dramatic really We Neill happening models what's We business cost to - mentioned, know Neill And spot kind a mentioned pretty So, cost there's happen a a pretty know, view there's as going our we market as don't our as online good price of coming you of as we Mohawk reductions thing. move Valley. as kind

kind the get really thing. into don't that - we of So into

have with on count we'd then for rather on And understood way. much so we and you count pricing they in term know, our demand agreements folks, and putting the the we’d coming for and them having - having curve, and long place us can capacity can

like So I it's -- more would it’s say. that

Vivek Arya

some And for follow-up spending next this Like that XXXX. level CapEx you're driving year? for that at when benefit planning that is higher it. model? CapEx? is color more was my Got you're importantly, could additional a And looking for do Neill, then does the I of to - You longer-term translate higher around hoping know, that? what fiscal into to upside what I you believe maybe your what give said you

Gregg Lowe

all, Yeah, - we and thanks first for said of the as question.

know, how can much as be burn as revenue. we we function First certainly of - just to the the of look said our translate get of how the to this but kind we trajectory into is we revenue And curve, at think, CapEx we -- the XXXX I at fast and demand demand that just not into a and as slope really year, can has all, of you out those online XXXX steepened. going timeframes

today. kind we're what into do I at where and out trying do we're the out at above to as is of exactly look time that's So get think you

to that Now a bring need function we can it execute and that online. well how be how of -

saying changing those that, necessarily typically curves. today, you anticipating know, but I So not can and numbers demand I'm think we're steeper seeing we the

plan of that and So spend and see CapEx out down we XXXX probably laid now is, type largely capture this of know, from amount we're our $XXX this we the anywhere what peak significant year, such but to see curve, in year capacity. $XXX we'll given million can on moves to fiscal, million benefits also you that that but the from as way into get millimeter, hopefully XXX more the know, we York steepening drive look which out same a, demand if trying we start from you in do is launched as is that of that the January we'll a to back capacity CapEx, and a by year. New to that and cough year some a state We'll you at if is same revenue reimbursements you the the go and bring of plan pulling plan to we

that that. some that over was was for XX and like materials things expansion some XX facilities of of and So going

it higher level maybe about anticipated the So billion in million maybe revenue and you as what previously had the roughly that can you we expectation in a could $XXX versus we than plan. meet anticipated but being think $X.X get pulling we with XXXX before XXXX as out into

Operator

Thank you.

comes line Oppenheimer. next Rusch of the from Colin from question Our

now is open. line Your

Colin Rusch

here you us get back Thanks the you preparedness so an your of suppliers on year? the on half ramp guys. give chain the next Can your update fiscal supply just and it of the into to as support much,

Gregg Lowe

Yeah.

is had Basically are chain in points that, can weekly from are, very the and pandemic, what we've where of So hit terms a beginning things update actively engaged of probably the happening in I forth. this Neill supply well. so crunch as

Our went of was lockdown job done getting both fantastic our when we've Neill, this stayed want in they’ve them of know in us suppliers feedback transition. and we're from of business how situation don’t and kind of there obviously these dealing close terms any in back, how, folks going of is rolled your team on, of add things has we handled chain no the point. even-handed from and if into on you supply how a were the this and The in very terms I very, with very have additional everything pandemic. throughout the then with supportive been as this, color positive kind day all very to we've in one from

Neill Reynolds

Yeah.

of thing think I I and enough out think that knowing going the fortunate expansion base, requirements out that early. need would affected we early, been in very terms revenue the to there to So, supply capacity one go was fortunate, we've the, have the

the on those think So, we in get term I to other things things out place. types equipment long placed in of orders or

as Now, a I you starting were think more difficult, would be expansion that that mentioned if earlier, Greg today. difficult

at see cases So, very think think with in we’ve ahead I working right the of think times that of And impacts in out well. there you the an maybe on look that scheduling we as it of longer gotten back. partnered also are suppliers, suppliers very, on capacity many I I expansion again we've now. the lead being And think, working the really terms I don't with it

we’re As in, pulling things any earlier, do seeing the actually to mentioned we I can in capability area we are and that.

Colin Rusch

of they or about those year design rate call following the on, which just are months design and six ins though? they just at And of talk in terms a ins you or up the at accelerate versus that it then duration any Excellent. working and and through rate the and now, noticeable how can process

Gregg Lowe

off It of opportunity every a seems own. has life of like, well, its kind first

obviously, design the not were super $X with But it's right. one billion kind you'll pleased these the we of things up having of quarter And so, see, of a where into last it's always in.

a Sometimes quarter. are in lot of made decisions a

quarter And last delayed obviously sometimes The get us. was was reason. phenomenal quarter decisions year get at made for billion. whatever for, for a Last $X.X super-positive

feel pretty about we So that. good

of seeing ramp - terms would in if than is of a though pulled I took originally we we the expectation - have, anticipated. -- steeper we're their own, the certainly the designings been it’s -- and is the kind of what's the customers what life And So, from in. say that they is

now. and it's good a hard right we're know, to problem on pretty it's obviously working one you So have

Operator

you. Thank

of from Equity. comes the Edward from Charter question next Our line Snyder

line open. Your now is

Edward Snyder

I follow-up. for question answer the was Thanks demand for your little Great. the on about by perishable Gregg, materials. confused a

-- [indiscernible], them. -- about like Can the to in device. of also largest most materials that's a have benefit and maybe not device, your automated those conversations and competitors about of going they the how but characterize got tenor explain must SIC business had building business. you You've know competing because side the feel Durham lot material you've be that's how large business you the from are with in which help to of had the customers I they're you going

New not fab - New device and of business your to materials going ramp York. that in York could independent You're grow in device

-- the So if this that's do preventing they faster you're And about building? the B., A., what's business feel monster fab materials your how about from limit to ramping customers?

Gregg Lowe

just things. of a Ed, And couple

demand, mentioned on to And the I worth - thought that has I devices. for perishable it the I off year. First the of -- and unfulfilled next as Neill -- answering -- relative device million of of the with the -- that was business demand kind $XXX

perspective. So that's really from device a

we're device in they're what those the And going with doing of device see got so forth. customers on so, doing see and activity York I development York when think New those pretty pleased the there with manufacturers or and we're amount that when what we've New

the treat a these got great one we we a for to power the silicon carbide realizing primarily XXXX $X.X $XXX of lot trying originally customers. mentioned that device In our of the give them. supplier real have a sort Ed market we've that's just couple and by silicon and There's really help anticipated best are be this ongoing two thing. and and and and they anticipate else. in them We of think the a materials everybody relationships a think as difficult kind We what do from somewhere expansions them I is seen we've important good I I that folks. materials as but our do with attitude because in $XXX than of own people having will to we trying so more of turning are extensions business to million not for -- with us big try as is convert bin materials business, of folks Ed are that going their can again we bin we're and to order a into that billion that is materials a materials are conversations I on know with of build million to terms relationship folks

way So the entire rapidly supplier think I toting growing sign -- I see growing characterize people opportunity coming think of is anytime their customers asking Ed a it would the rapidly market no it decade really very very, in because the device I materials as is really. there's out the that is and

it's probably realization anticipated a well customer this fact do So and that stuff treat the I mostly we think just than harder is them to that as a

Edward Snyder

is if gross that New $XXX a payments? Neill I you of the State in Did housekeeping. could CapEx net say million maybe or And Great. York

Neill Reynolds

I a New net of York think payments. that of State

Edward Snyder

Thank you. Great.

Operator

you. Thank

from Our next Srivastava question BMO. of comes the line from Ambrish

Your line is now open.

Ambrish Srivastava

current to on cost being startup for are Hi. out out letting industry. you Thank and -- the I the $XX Gregg ADs the Thank help you. the the get me out charge. It's unusual margin thinking in help understand you're semi does follow-up second call. in my since you both behind especially the bottoms you from kind Can costs, gross quarter the of costs forma kind see the and startup of fiscal pro of imply just cash of and And related cost performing billion forma Neill, pro since on a -- that had is, question, out, that then year? us question that? then

Gregg Lowe

that before decision do as seen take Thanks, did and we've benchmarking well. of course, if study we that some Ambrish. you And kind that other companies of I we on think that,

I really cost. think the startup second thing isn't the

and the going that Given in generating are margins trying versus out a the we're know then explain with we're of we very of where down sorry, and I’m easier every see such just that you you, quarter and was from and report significant on what know, there. be then And be about revenue. be it all let to of them second future, that’d doing, to you what and piece that go it transparent It's look company to, of what was question? and kind we weighing today not kind to costing the to size really able the be startup

Ambrish Srivastava

gross current out second the the then that was thing quarter year? bottoms of the second in question should margin Yeah, we fiscal

Gregg Lowe

dependent in mean, Yes, improvement. a contract that some to see is going be lot I what I this happens with we're of upon going to manufacturer. the think

earlier in improvements in the point another that. in of of As I factory. impact impact about related making just are point XQ. quarter one said our in And our, happened We’ll in our XQ derm see derm, we to

disconnect. you of on in lot that demand now, right about if derm supply think that’s So, deepening happening I what’s going think a its and is

can If you revenue standpoint, not, think about we are revenues. if we’re do get our more we what here standing we capacity is more online, could

for year just the we the changed. Durham them out forecast hasn't It's and meantime. revenue our of output we want got So, in than to higher more get

higher and of a a year to that, kind and footprint. support XXX So, we've focus really the Durham new I the curve. over mentioned that improve in kind put tools North and support get of Carolina better demand. need in if take on earlier, we that leadership got think as factory last get we back, in And a here to demand you that improve just happen And what'll output Greg step alone, to

prepared significant, [indiscernible] significantly amount [indiscernible] example, running Durham we've in She wafers the produced that remarks hired. was recently heard TI for a pad. of who For a our someone you more is

incremental through out that got margin the a bottoming come will think time on So, to performance a demand capacity the to of we've yield given most fulfil improvements that, and in cycle of you and footprint. drive that

As revenue, it. come to anticipate with higher along will, will we that drive margins we the

that together. So, goes kind all of

as year kind feels those as I things So, of to excluding and those hit start-up kind kind some driving we've mid-XXs should XQ get fulfilling back demand, earlier. mentioned I, that like see the as hit We in bottom. we this of of improvement that plus is additional the of minus we then as half get or costs

Operator

Thank you.

question next Kumar from comes the Sandler. of line Harsh Our from Piper

is line now Your open.

Harsh Kumar

that -- hoping back had point that quick you a this yeah, I've question. differently. design. on else is are then go a to I was, define second. Congratulations I'll Yeah. design and at seen you for could to come on And Hey, categorize just that the us there that I these Gregg, things these in pipeline. committed And of guys. are companies how something with explain fully books or lot it? strong orders guys a that are was I basically

Gregg Lowe

something project. customer has works it's to of it well that an of is that this official customer an Typically, different Yeah. suppliers and the business. something particular letter have and like the is when form award us the design-in but the comes from that or won times way Many document in evaluated all you've a flipped our we over awarded that's

about the years you that to the And so, time It's it's of from depending a on customer ramping initial that. talk production can four they -- several they during go letter you're equipment years. samples worked need typically it familiar it's and To They that working know automotive. all they design put you pretty that will. award the to you consider in them. other the initial if people an on think an very And It's end so design-in. award and parts shipping a in builds be same And it kind typical And and when have of is qualification of it them I terms for way. in perspective whatever engineering forth. That as challenges me on. most companies define of their semiconductor them to companies with say from what I've

Harsh Kumar

is how to the when do you you're follow can big on the or opportunity something to you to growing number wanted But know then just estimate? order is I going in up So that like that that. going pipeline, be design

Gregg Lowe

No. and going tells customer to it's we we multiply by of price that did. The be then us units millions x it the

obviously which subject going the but have supernormal with variability to turns And so, to And and thinks some harsh environment. it that's customer the that is is their in can of into. we product ramp how know that all accuracy much this

design-in way a it I terms would what think we're describe other fairway well. pretty the as of is much people down with So in straight doing

Harsh Kumar

Very helpful. Gregg. you, Thank Understood.

Operator

you. Thank

David question next from of Exane Our O'Connor the BNP. from comes line

line is open. Your now

David O'Connor

it's this of go taking in expanded I'm XXX the to the in just to still still given stretch going XXX Great. the way the wafer not the part five-year seeing wait can if just $X.X industry question. transition wondering to the part that Thanks and of right my given agreement Maybe that billion Greg to think we're for back that timeframe millimeter. for were about into millimeters Thanks. to from the supply back in I supply agreement, is XXX addition millimeter decade that? the agreement the why the

Gregg Lowe

Yeah.

half about a second will. So on is yes right question of the so kind the you decade if code zip

at on all on and Some a this focused we're just terms of gets with millimeter. bit everybody part just remind the and just little them are of in XXX just to done deals ramping point this of XXX capability announced and millimeter our second longer we obviously the really one are that decade into the we've internal here

decision of more focused stay that. it's to So just a on

David O'Connor

follow-up anything next quick fiscal -- the Thank into Got maybe it. that there? to Neill out And year just we should the call on OpEx model how for you. next one that

Gregg Lowe

Yeah. David. Thanks,

we get couple similarly investment the into OpEx, dollars and quarter a about As same. think of you a at the I remain think could the that areas accreting million

-- to new You know products it's primarily and in R&D XXX know help know you to levels you you us in work you design who these the know And the that's millimeter to marketing we're addition and to in those the areas as in going grow it bringing investing market to bring and relates pipeline the we're sales we the on of know all and that home that investing do. grow development are in. continue

a you maybe the couple about as of the end get million a of out year. to quarter think can You

Operator

At Lowe you. this I questions. closing I'm remarks. back over the further to showing would to for no turn Thank call Gregg time, like

Gregg Lowe

Well, quarter. to to next talking participation over in thanks And today. your the you. look Thank call we the everybody for and engagement and questions you forward

Operator

call. This participating. for concludes Thanks today's conference

now may disconnect. You

Wolfspeed (WOLF) 18 Aug 212021 Q4 Earnings call transcript