Mohawk Valley 200mm Silicon Carbide Fab Reaches
20% Utilization, Achieves LEED Certification
John Palmour Manufacturing Center Achieves
Successful Activation of Initial Furnaces
Company Expects Temporary Impact from Equipment
Incident at Durham 150mm Device Fab
Wolfspeed, Inc. (NYSE: WOLF), the global leader in silicon
carbide technology, today 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.
About Wolfspeed, Inc.:
Wolfspeed (NYSE: WOLF) leads the market in the worldwide
adoption of silicon carbide technologies that power the world’s
most disruptive innovations. As the pioneers of silicon carbide,
and creators of the most advanced semiconductor technology on
earth, we are committed to powering a better world for everyone.
Through silicon carbide material, power modules, discrete power
devices and power die products targeted for various applications,
we will bring you The Power to Make It Real. Learn more at
www.wolfspeed.com.
X (formerly Twitter): @Wolfspeed LinkedIn: @Wolfspeed
Wolfspeed® is a registered trademark of Wolfspeed, Inc.
Mohawk Valley Fab Utilization Rate:
Wolfspeed measures the utilization rate based on the number of
wafer starts per week at the Mohawk Valley fab as compared to the
number of wafer starts at its expected utilization level. Wolfspeed
may experience fluctuations in the utilization rate at the Mohawk
Valley fab as we continue to install and qualify new machinery and
ramp up production.
Non-GAAP Financial Measures:
This press release provides the Company's business outlook on
both a GAAP and a non-GAAP basis. The GAAP guidance measures
include certain costs, charges and expenses that are excluded from
non-GAAP guidance. By publishing the non-GAAP measures, management
intends to provide investors with additional information to further
analyze the Company's performance, core results and underlying
trends. Wolfspeed's management evaluates results and makes
operating decisions using both GAAP and non-GAAP measures included
in this press release. Non-GAAP results are not prepared in
accordance with GAAP, and non-GAAP information should be considered
a supplement to, and not a substitute for, financial statements
prepared in accordance with GAAP. Investors and potential investors
are encouraged to review the reconciliation of non-GAAP financial
measures to their most directly comparable GAAP measures attached
to this press release.
Forward Looking Statements:
The schedules attached to this release are an integral part of
this release. This press release contains forward-looking
statements involving risks and uncertainties, both known and
unknown, that may cause Wolfspeed’s actual results to differ
materially from those indicated in the forward-looking statements.
Forward-looking statements by their nature address matters that
are, to different degrees, uncertain, such as statements about
future growth in the demand for silicon carbide power devices and
our ability to meet such demand, our ability to continue to achieve
targeted utilization rates at the Durham and Mohawk Valley fabs,
our ability to execute on our 200mm vertical integration ahead of
other market participants and the impact of the recent incident at
our Durham 150mm device fab to our financial results and our
ability to achieve our targets for the fourth quarter of fiscal
2024 and beyond. Actual results could differ materially due to a
number of factors including but not limited to, risks associated
with our expansion plans, including design and construction delays,
cost overruns, the timing and amount of government incentives
actually received, including under the CHIPS and Science Act,
issues in installing and qualifying new equipment and ramping
production, poor production process yields and quality control, and
potential increases to our restructuring costs; our ability to
shift device production from Durham to Mohawk Valley and complete
remediation in our Durham 150mm device fab in a timely manner;
changes in progress on infrastructure development or changes in
customer or industrial demand that could negatively affect product
demand, including as a result of an economic slowdown or recession;
the risk that we may experience production difficulties that
preclude us from shipping sufficient quantities to meet customer
orders or that result in higher production costs, lower yields and
lower margins; the risk that our results will suffer if we are
unable to balance fluctuations in customer demand and capacity,
including bringing on additional capacity on a timely basis to meet
customer demand; risks associated with the ramp-up of production of
our new products, and our entry into new business channels
different from those in which we have historically operated; the
risk that the markets for our products will not develop as we
expect, including the adoption of our products by electric vehicle
manufacturers and the overall adoption of electric vehicles; the
risk that we or our channel partners are not able to develop and
expand customer bases and accurately anticipate demand from end
customers, including production and product mix, which can result
in increased inventory and reduced orders as we experience wide
fluctuations in supply and demand; risks related to international
sales and purchases; the rapid development of new technology and
competing products that may impair demand or render our products
obsolete; the potential lack of customer acceptance for our
products; the risk that customers do not maintain their favorable
perception of our brand and products, resulting in lower demand for
our products; the risk that our products fail to perform or fail to
meet customer requirements or expectations, resulting in
significant additional costs; and other factors discussed in our
filings with the Securities and Exchange Commission (SEC),
including our report on Form 10-K for the fiscal year ended June
25, 2023, and subsequent reports filed with the SEC. These
forward-looking statements represent Wolfspeed's judgment as of the
date of this release. Except as required under the U.S. federal
securities laws and the rules and regulations of the SEC, Wolfspeed
disclaims any intent or obligation to update any forward-looking
statements after the date of this release, whether as a result of
new information, future events, developments, changes in
assumptions or otherwise.
WOLFSPEED, INC. Business Outlook Unaudited GAAP to
Non-GAAP Reconciliation Three Months Ended (in millions
of U.S. Dollars)
30-Jun-2024 GAAP net loss from
continuing operations outlook range
($204) to ($182)
Adjustments:
Stock-based compensation expense
21
Amortization of discount and debt issuance costs, net of
capitalized interest
11
Project, transformation and transaction costs
7
Loss on Wafer Supply Agreement
7
Total adjustments to GAAP net loss before provision for income
taxes
46
Income tax adjustment
36 to 31
Non-GAAP net loss from continuing operations outlook range
($122) to ($105)
Three Months Ended
30-Jun-2024
GAAP gross margin from continuing operations outlook range
(4%) to 4%
Adjustments:
Stock-based compensation expense
4%
Non-GAAP gross margin from continuing operations outlook
range
0% to 8%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240624016099/en/
Media Relations: Bridget Johnson Head of Corporate Marketing and
Communications 847-269-2970 media@wolfspeed.com
Investor Relations: Tyler Gronbach VP, External Affairs
919-407-4820 investorrelations@wolfspeed.com
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