Quý 3 của Wolfspeed vẫn giữ mức tăng trưởng 37% so với cùng kỳ năm ngoái nhờ lệnh đóng cửa do COVID của Trung Quốc
News: Microelectronics
16 May 2022
For its fiscal third-quarter 2022 (ended 27 March), Wolfspeed Inc (formerly Cree Inc) of Durham, NC, USA has reported a seventh consecutive quarter of revenue growth to $188m, up 8.6% on $173.1m last quarter and 37% on $137.3m a year ago.
| Fiscal | Q3/2021 | Q4/2021 | Q1/2022 | Q2/2022 | Q3/2022 |
| Revenue | $137.3m | $145.8m | $156.6m | $173.1m | $188m |
“Our top line was impacted [to the high-single-digits million dollar level] by COVID-19 quarantine protocols in China, which resulted in partial shutdowns at some of our packaging subcontractors and delays in some of our shipping channels,” notes executive VP & chief financial officer Neill Reynolds. “Absent these shutdowns, we would have met or exceeded the top end of our [$185–195m] guidance range.”
All financial figures are for continuing operations. After divesting its Lighting Products business in May 2019 and its LED Products business in March 2021, on 4 October Cree changed its name to that of its Wolfspeed business unit, focused on manufacturing silicon carbide materials as well as both silicon carbide (SiC) and gallium nitride (GaN) power-switching & RF semiconductor devices.
“Demand for our power device solutions continues to be strong, as evidenced by revenue growth of approximately 87% over the prior year,” says Reynolds. “We continue to see increased demand for our silicon carbide solutions.”
For RF devices, Wolfspeed is seeing positive momentum in the communications infrastructure and aerospace & defense markets.
“From a materials perspective, demand for our 150mm SiC substrate is strengthening as we see increasing demand from our customers, which resulted in strong year-over-year and sequential growth,” says Reynolds. “We continue to add capacity to serve this strengthening demand.”
On a non-GAAP basis, gross margin has grown further, from 35% a year ago and 35.4% last quarter to 36.3%. This is above the midpoint of the 35–37% guidance range, as lower-than-expected device revenue (due to the China shutdowns) drove modest improvements in the product mix.
Operating expenses have risen further, from $80m a year ago and $86.6m last quarter to $88.6m, due largely to investments in the 200mm SiC substrate platform and in the device businesses (supporting the ramp-up of the new Mohawk Valley fab in Marcy, NY). In May 2019, Cree began a multi-year factory optimization plan. In Durham, the firm converted an old lighting and office space into industrial space for a significant expansion of its crystal growth and epi capability (part of a 30x increase in SiC materials capacity). Also, in September 2019, Cree announced that the plan was being anchored by a new automated 200mm SiC device fabrication facility at Marcy in Mohawk Valley, New York State (expanding from the firm’s existing 150mm-wafer SiC device fab in Durham).
Operating loss was $20.4m (operating margin of -11% of revenue), cut from $32m (-23% operating margin) a year ago.
Net loss has been cut further, from $24.7m ($0.22 per diluted share) a year ago and $18.6m ($0.16 per diluted share) to $14.3m ($0.12 per diluted share), which is better than the targeted $15–20m ($0.12–0.16 per diluted share).
Operating cash outflow was –$28.4m (improving further, from –$32.5m last quarter). Capital expenditure (CapEx) was $102.8m. Free cash outflow was hence –$131.2m (a further improvement from –$176m last quarter).
Additionally, Wolfspeed completed a convertible debt offering at the end of January with the issuance of $750m convertible senior notes, allowing it to fund the expansion of materials capacity at the Durham campus, and additional fab and back-end capacity to support the steepening demand for silicon carbide solutions.
During the quarter, cash, cash equivalents and short-term investments hence rose from about $700m to $1286m. So, Wolfspeed has about $1.3bn of cash and liquidity on hand to support its plans. “We will continue to be opportunistic from a capital market standpoint to ensure we have flexibility to continue to support our long-term growth path,” says Reynolds.
During the quarter Wolfspeed incurred factory optimization start-up costs (primarily related to the new Mohawk Valley 200mm SiC device fab) totaling $21.4m (almost doubling from $11m last quarter). The firm originally expected $80m of start-up costs in fiscal 2022, incurred mostly in fiscal Q2 as it continues to ramp the new fab. “At this time, we believe start-up costs will be at approximately the $75m level by the end of the fiscal year,” notes Reynolds.
Wolfspeed is running initial lots in the new fab. “With the official opening of Mohawk Valley at the end of April, we’ll improve our ability to meet the steepening demand curve for silicon carbide devices, which will only improve as we continue to ramp production capacity,” says Reynolds. “We’ll start to see revenues start to more substantially come out of the fab as we get into the back half of fiscal 2023… March and June quarter next year,” he adds.
“This transition [of customers] to silicon carbide devices is happening faster than we anticipated. In fact, our device opportunity pipeline continues to grow and is now well north of $25bn [up from $10bn a year ago] and is comprised of approximately 9000 different projects [up from 8700 last quarter],” says CEO Gregg Lowe. “More importantly, our sales team continues to do a phenomenal job converting these opportunities into design-ins across a wide range of applications,” he adds.
Design-ins matched last quarter’s record $1.6bn (up from $580m a year ago), about 70% of which were automotive-related, some of which should generate revenue in fiscal 2026. Year-to-date design-ins are $3.8bn, doubling year-on-year from $1.9bn (and exceeding full-year fiscal 2021’s $2.9bn). “We have secured approximately $8.7bn of design-ins over the last three years [about 45% of which have now moved into initial production ramp, i.e. becoming a ‘design-win’], representing a long tail for future revenue. This puts ever-increasing upward pressure on our long-term revenue outlook,” says Lowe. “The progress we’ve made at the Mohawk Valley fab, paired with another record-setting design-in total for the quarter, demonstrates how Wolfspeed is expanding its market-leading position and driving the transition to silicon carbide devices in the automotive and industrial end-markets,” he adds. “Given this, a top priority going forward is increasing capacity for both materials and devices. We’ll certainly leverage our existing footprint as much as we can. This includes ongoing expansion of our materials footprint in Durham to maximize material growth while also producing as many devices as we can out of our current fab in North Carolina and pulling forward some of our fit-out time-lines for the Mohawk Valley fab… the fit out of the factory and the removing of temporary walls [to open up the ballroom] and things like that, it’s all accelerating versus our previous plan.”
Wolfspeed now expects net capital expenditure of about $550m in fiscal 2022 versus the previously communicated $475m. “This change is related to the timing of reimbursements from New York State for the Mohawk Valley fab,” notes Reynolds. “We now anticipate receiving these reimbursements in the first half of fiscal 2023, and this does not represent a significant change in our fiscal 2022 gross CapEx spend outlook,” he adds. “The construction of this fab is not only a great accomplishment for Wolfspeed, but also has created north of 250 jobs to date for the people of Upstate New York and is attracting future talent from the surrounding universities to our partnerships with SUNY School System and others,” he adds.
“Our financial results for the quarter continue to demonstrate progress towards our corporate objectives and the further adoption of silicon carbide across a wide range of applications,” says Lowe.
For fiscal fourth-quarter 2022 (to end-June), Wolfspeed targets revenue growth to $200–215m (up 10% sequentially), driven by Power device revenue more than doubling as it continues to increase capacity across the supply chain. The impact on revenue of COVID-related shutdowns in China will probably be similar to that in fiscal Q3 (high-single-digits million dollar level).
Gross margin should be steady at 35.3–37.3%. “The key to our gross margin transition from the mid-30s to 50% in 2024 is largely based on three elements: optimizing Durham, transitioning from 150mm to 200mm wafers, and driving revenue through Mohawk Valley,” notes Reynolds. “We continue to be on track with all three of these elements, as evidenced by our progress this quarter.”
Operating expenses are targeted to be $91m. “We anticipate operating expenses will continue to slowly increase over time due to increased headcount in R&D and sales & marketing, but expect this to become a smaller percentage of revenue as we near the middle of the decade,” says Reynolds.
Wolfspeed targets a cut in operating loss to –$20–11m, and net loss of –$16-9m ($0.13–0.07 per diluted share).
“In 2023, we will likely spend as much or more CapEx as we did this year… geared at increasing the capacity levels,” says Reynolds. “We’ve got unfulfilled demand exceeding our supply to the tune of around $100m,” adds Lowe. “We’re working real hard to grow the capacity as fast as we can.”
The Mohawk Valley fab’s planned annual output at full capacity (in the 2024 time-frame) is $1.5bn. At its Investor Day in November, Wolfspeed was projecting $2.1bn of total annual revenue at the company level, including about $1.4bn of device revenue. “Demand is just simply coming in stronger and our win rate is stronger than we anticipated… We will be needing another wafer fab sooner than we originally had anticipated,” says Lowe. “This next fab [larger than Mohawk Valley] is probably going to take longer to build than the original fab, which is all the supply chain issues and the tool lead-times,” he notes.
“Wolfspeed will very likely need to add more materials production as well,” says Lowe. “We have one factory here on campus. We have a second factory that we’re expanding here on campus. What we’re talking about is a third factory for materials.”
“Additional capital is being spent to address materials, the Mohawk Valley fab as well as the back end,” notes Reynolds. “Additionally, as we continue to grow, we continue to have the right people in place to help us manage that.”
Wolfspeed opens Mohawk Valley 200mm silicon carbide fab
Wolfspeed’s silicon carbide power modules used in inverters of Lucid Air EV
Wolfspeed revenue grew 11% in December quarter despite supply constraints
Wolfspeed quarterly revenue up 35.6% year-on-year
Cree becomes Wolfspeed, trading on NYSE under new ticker ‘WOLF’
Cree’s quarterly revenue up 34.5% year-on-year
Cree’s quarterly revenue growth of 21% year-on-year driven by 50% growth for devices
