Wolfspeed, Inc. (NYSE:WOLF) Q4 2023 Earnings Call Transcript

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So those are the timing of the revenue ramp of the fab is. We did about $1 million or so last quarter. We’ll see a bit of a tick up here in Q1, a modest pickup, I think, again, in 2Q, and then a steeper ramp as you get to the back half of the fiscal year into the March and June quarter. And then we should be, on our way from there.

Harsh Kumar: Wonderful, guys. Very helpful. And then for my follow-up, so there were customers that were expecting to get product off of Mohawk Valley right now. I know that was part of the original plan. So, I guess, my question to you is how are you managing those expectations for those customers? And how important is that commitment to the customer and for you guys? And more importantly, how you’re balancing that supply/demand game in the near term as you ramp Mohawk Valley?

Gregg Lowe: Yes. Thanks for that question. Yes. Obviously, near term, it creates an impact with the delay of the ramp of Mohawk Valley. We’re doing a couple of things. So first off, you’re seeing more automotive shipping out Durham. So obviously, we shifted that mix to Durham. We’re obviously engaging with customers and being transparent as to what the expectations are, and we realigned those expectations to be in concert with how we expect to ramp the Mohawk Valley. We’re engaged with them on an ongoing basis and, in some cases, that’s weekly, in some cases, that’s nearly daily, because there’s a lot of communication going back and forth. Many of them have come to Mohawk Valley and they remain very encouraged about the scale of production that we’ve got coming online.

They obviously love it to come online faster. But they really can’t see this level of capacity coming online anywhere else. And then you combine that with what we’ve got going on and what we’ve been able to execute in Building 10 and what we’ve got going on with the JP, we’ve had several customers out of that, and it’s just an enormous site. And the fact that we’re not going vertical and we’re intending to be producing product in there around this time next year, actually a little bit earlier than that this time next year. [indiscernible] some encouraging — encouragement toward — that capacity is actually coming.

Neill Reynolds: And then also to add to that, Harsh, I think customers have taken notice that we’ve done a very good job just on the financing element here and creating — giving ourselves the ability to fund a very significant capacity expansion. So, when they look forward and see what the opportunity is based on the manufacturing footprint that we’re building out and we’re funded to build out gives us — gives them something to look forward to in terms of our capability to deliver parts out into the future.

Harsh Kumar: Thanks, guys. Thank you so much for the clarity. Appreciate it.

Gregg Lowe: Sure.

Operator: Our next question is from Jed Dorsheimer with William Blair. Your line is now open.

Jed Dorsheimer: Hi, thanks, and thanks for taking my questions. Just my — for my first question, I guess, I don’t know if Neill or Gregg, you want to address this, but the change in accounting begs why now. You’ve spent the past year defending the underutilization. In first quarter, you’re out of the gate, you’re changing that. So, what caused that change? And that — was this driven by your auditors seeing something in the business? Or maybe some color around that would be helpful. And I do have a follow-up.

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