Wolfspeed, Inc. (NYSE:WOLF) Q3 2024 Earnings Call Transcript

Neill Reynolds: Sorry, Jed. So in terms of the — how we think about that. Right now, the end market demand for automotive in terms of EV customers, there’s a lot of changes that Gregg talked about in terms of the OEM landscape. The amount of demand still outstrips our supply. So it’s really important for us to continue to take as much capacity as we can serve those customers. In the meantime, we’ll continue to drive our materials business. As you know, we’ve got a lot of long-term agreements there that underpin our revenue for a long time. And I think that the $90 million to $95 million per quarter will continue to service that market, I think, in terms of how it’s kind of laid out today. I think it’s very important that we continue to service our automotive customers this time and we’re going to continue to operate.

Jed Dorsheimer: Well, I understand that. Neill, maybe I didn’t ask the question is clearly, but if $40 million coming out of Durham on the devices side where you’re supplying the 150 millimeter wafers internally, why wouldn’t you be able to see a $12 million increase in the materials business?

Gregg Lowe: Yeah. So maybe I’ll take a crack at that. I don’t think I understood that to be your question. So a couple of things. Obviously, we have automotive demand that is higher than our current supply. So transitioning that capability from I&E to automotive is a very important customer satisfaction item that we’re focused on. The automotive devices are larger than the industrial products and substantially most of the industrial products are sold in packaged or module form and the exact opposite for automotive. For automotive, substantially most of the product that we sell is in die form. So we’re not adding value. We’re adding incremental revenue potential for the same amount of, I’ll call it, silicon carbide millimeters squared. So it’s not a one-to-one trade off when you move from an industrial part to an automotive part in the fab itself. Is that clear, Jed?

Operator: Thank you. We have no further questions in the queue, so I’ll turn the call back over to Gregg Lowe for any closing comments.

Gregg Lowe: Well, thanks, everybody, for participating in the call with us and we look forward to catching up at the end of next quarter. Thank you.

Operator: This concludes today’s call. Thank you for joining. You may now disconnect your line.