Wolfspeed, Inc. · NYSE:WOLF

Wolfspeed — Cree — Investor Day (February 2018)

67 slides from Wolfspeed's investor day presentation, Feb 26, 2018

Slide 3: Welcome and Agenda
© 2018 Cree, Inc. All rights reserved 3 Welcome Raiford Garrabrant Investor Relations Corporate Strategy Gregg Lowe Chief Executive Officer Wolfspeed Cengiz Balkas SVP / GM Wolfspeed Break LED Products Dave Emerson EVP / GM LED Products Agenda Lighting Products Craig Atwater SVP / GM Lighting Produc
Slide 4: Note on Forward-Looking Statements
© 2018 Cree, Inc. All rights reserved 4 Note on Forward-Looking Statements This presentation includes forward-looking statements about Cree’s business outlook, future financial results and targets, product markets, plans and objectives for future operations, and product development programs and goal
Slide 6: Wolfspeed: A Powerhouse Semiconductor Company
© 2018 Cree, Inc. All rights reserved 6 WOLFSPEED A Powerhouse Semiconductor company focused on Silicon Carbide (SiC) and Gallium Nitride (GaN) • Large multi-decade growth opportunities with SiC and GaN in Electric Vehicles, Solar energy, Telecommunications, Industrial, and Mil/Aero • Invest to expa
Slide 7: LED Focus: Cree's Transformation Path
© 2018 Cree, Inc. All rights reserved 7 LED Focus where our best-in-class technology and application-optimized solutions are differentiated and valued • High-power technology provides the only solution • High-power general lighting • Automotive lighting • Application-optimized solutions solve the mo
Slide 8: Lighting: Fix the Business
© 2018 Cree, Inc. All rights reserved 8 LIGHTING Fix the Business • Fix quality through improved processes and new product developments • Improve channel position and relationships • New product innovations to better position the portfolio--focused on higher specification and smart intelligent featu
Slide 9: Cree Transformation – Revenue Expansion
© 2018 Cree, Inc. All rights reserved 9 Cree Transformation – Revenue Expansion $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 WS LED Lighting $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 WS LED Lighting FY 2017 - $1,473 (millions) Actual FY 2022 - $2,343 (millions) Target Re ven u e (M ill io n
Slide 10: Gross Margin and Earnings Power Expansion
© 2018 Cree, Inc. All rights reserved 10 Gross Margin and Earnings Power Expansion 25.7% 40.0% -0.7% 20.0% -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% F18Q2 FY22 % to Re ven ue Gross and Operating Margin (non-GAAP) GM% OM% Long Range Model (non-GAAP) • GM 40+% • OM 20+% Target Actual
Slide 11: Cree's Transformation Path
© 2018 Cree, Inc. All rights reserved 11 WOLFSPEED A Powerhouse Semiconductor company focused on Silicon Carbide (SiC) and Gallium Nitride (GaN) LED Focus where our best-in-class technology and application-optimized solutions are differentiated and valued LIGHTING Fix the Business Cree’s Transformat
Slide 14: Wolfspeed: A Powerhouse Semiconductor Company
© 2018 Cree, Inc. All rights reserved 14 WOLFSPEED A Powerhouse Semiconductor company focused on Silicon Carbide (SiC) and Gallium Nitride (GaN) • Large multi-decade growth opportunities with SiC and GaN in Electric Vehicles, Solar energy, Telecommunications, Industrial, and Mil/Aero • Invest to exp
Slide 15: Silicon Carbide and GaN: Fundamental Advantages
© 2018 Cree, Inc. All rights reserved 15 Silicon Carbide and GaN: Fundamental Advantages Silicon Carbide Solar Inverters and On-Board Chargers are: • 5X lighter • 3X smaller • 25% lower semiconductor losses GaN-Based Antennas: • Increased capacity and coverage • 2X the users/tower • 10X the data rat
Slide 16: Wolfspeed Business Overview
© 2018 Cree, Inc. All rights reserved 16 Wolfspeed Business Overview $xxB $221M FY 2017 Revenue RF Power Materials • Global technology leadership • Market’s broadest, most field-tested portfolio Transportation Communications Energy Industrial
Slide 17: Years of Global Silicon Carbide and GaN Leadership
© 2018 Cree, Inc. All rights reserved 17 30 Years of Global Silicon Carbide and GaN Leadership 1991 Released world’s first commercial SiC wafers 1998 Created industry’s first GaN HEMT on SiC 2000 Demonstrated first ever GaN MMIC with record power density 2002 Released first 600V commercial SiC JBS S
Slide 18: Wolfspeed's Leadership in Power and RF Devices
© 2018 Cree, Inc. All rights reserved 18 Wolfspeed’s Leadership in Power and RF Devices SiC Power - #1 Market share* GaN RF - #2 Market share* 4+ TRILLION FIELD HOURS Failure-in-time rates lower than Si FIRST COMMERCIAL SIC MOSFET THOUSANDS OF CUSTOMERS Servicing all major markets 170+ BILLION FIELD
Slide 19: EV Market: More than $60B in Investments Announced
© 2018 Cree, Inc. All rights reserved 19 EV Market: More than $60B in Investments Announced Recently BMW Committed to 25 new EVs by 2025 NISSAN Nissan to invest $9B in China in Race for EV dominance VOLVO Announces every new model will run at least partly on electric power in 2019 FORD Announces $11
Slide 20: Even Modest EV Adoption Drives Significant Opportunity
© 2018 Cree, Inc. All rights reserved 20 Even Modest EV Adoption Drives Significant Opportunity • SiC at the heart of EV and EV infrastructure • Multi-decade opportunity $15B $- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 0 20 40 60 80 100 120 140 2017 2022 2027 2032 S iC O p p ortun
Slide 22: Key Markets Driving SiC Power Market Expansion
© 2018 Cree, Inc. All rights reserved 22 Key Markets Driving SiC Power Market Expansion Drivers ≈30% of all vehicles made will be electric by 2032 Faster charging and long-term reliability High efficiency and power density for commercial and industrial equipment Legislation and social awareness for
Slide 23: On-Vehicle SiC Has Unprecedented Potential for Growth
© 2018 Cree, Inc. All rights reserved 23 On-Vehicle SiC has Unprecedented Potential for Growth Drivers Within ten years half of all model types manufactured will be EVs Policy tailwinds – emission standards are tightening Increasing Range Decreasing cost Worldwide SiC Revenue 2017 $2.4B SAM 2022 Sol
Slide 24: Fast Chargers Could Drive a $500 Million SAM by 2022
© 2018 Cree, Inc. All rights reserved 24 Fast Chargers Could Drive a $500 Million SAM by 2022 Drivers Asia leading the field for charger installations On-the-go demand for fast charging Efficiency and size key to installation Worldwide SiC Revenue 2017 $522M SAM 2022 Solar Electric Vehicles $2M Fast
Slide 25: Solar Silicon Carbide Adoption Accelerating
© 2018 Cree, Inc. All rights reserved 25 Solar Silicon Carbide Adoption Accelerating Drivers Energy efficiency and cost Legislation and global incentives Social awareness for renewables Worldwide SiC Solar Revenue 2017 $2.1B SAM 2022 Solar Electric Vehicles $85M Solar SiC Market (Source: YOLE and co
Slide 26: SiC Enables More Efficient Solar Inverters
© 2018 Cree, Inc. All rights reserved 26 10 MW saved per year • SiC enables lighter, smaller, quieter and more efficient solar inverters • SiC saves 10 megawatts for each gigawatt installed per year vs silicon; saves 500 watts for every second in operation
Slide 28: GaN RF Device Market Expanding to >$1B
© 2018 Cree, Inc. All rights reserved 28 GaN RF Device Market Expanding to >$1B in 5 years Drivers Insatiable need for bandwidth High-performance defense systems Improved performance, high efficiency commercial and industrial equipment Worldwide GaN Revenue 2017 $1.1B SAM 2022 Telecom Industrial / C
Slide 29: GaN – Enabling Faster 4G and the Transition to 5G
© 2018 Cree, Inc. All rights reserved 29 GaN – Enabling Faster 4G and the Transition to 5G GaN Advantages Wider Bandwidth: supports 10X faster download speeds Higher Frequency: compact active antennas for real-time adaptable coverage – no more moving in and out of range Higher Efficiency: smaller, m
Slide 30: Non-Telecom RF Market CAGR 25% Through 2022
© 2018 Cree, Inc. All rights reserved 30 Non-Telecom RF Market CAGR 25% Through 2022 Drivers Lower power consumption Higher performance Improved reliability Smaller, lighter equipment Weather Radar Air Traffic Control 1st Responders CATV RF Heating Industrial Test and Measurement Mil Aero Broadcast
Slide 32: A More Powerful, Efficient World Enabled by SiC and GaN
© 2018 Cree, Inc. All rights reserved 32 A More Powerful, Efficient World Enabled by SiC and GaN • #1 supply position at major power and RF semi companies globally • Over three decades of global technology leadership • Continued innovation through device performance feedback • Unrivaled scale; signi
Slide 33: SiC Materials Innovation Leadership
© 2018 Cree, Inc. All rights reserved 33 SiC Materials Innovation Leadership • Released the world’s first commercial SiC wafers in 1991 • Led every subsequent wafer diameter increase 1991 Unrivaled scale and market share leader Initiated Commercial SiC Wafer Market Led commercial scale SiC productio
Slide 34: SiC Materials Market Expanding To >$1B by 2022
© 2018 Cree, Inc. All rights reserved 34 SiC Materials Market Expanding To >$1B by 2022 Drivers EV applications driving significant volume steps in power wafer market Significant adoption in broad industrial market applications Telecom/5G commercial growth with major RF players Worldwide SiC Materia
Slide 35: A More Powerful, Efficient World Enabled by SiC and GaN
© 2018 Cree, Inc. All rights reserved 35 A More Powerful, Efficient World Enabled by SiC and GaN Wolfspeed SiC and GaN deliver superior performance and value addressing the growing demands of semiconductor applications Revenue for FY2017 was $221M; SAM for our target markets is $7.3B for 2022 If onl
Slide 36: Wolfspeed: A Powerhouse Semiconductor Company
© 2018 Cree, Inc. All rights reserved 36 WOLFSPEED A Powerhouse Semiconductor company focused on Silicon Carbide (SiC) and Gallium Nitride (GaN) • Large multi-decade growth opportunities with SiC and GaN in Electric Vehicles, Solar energy, Telecommunications, Industrial, and Mil/Aero • Invest to exp
Slide 39: LED Focus: Cree's Transformation Path
© 2018 Cree, Inc. All rights reserved 39 LED Focus where our best-in-class technology and application-optimized solutions are differentiated and valued • High-power technology provides the only solution • High-power general lighting • Automotive lighting • Application-optimized solutions solve the m
Slide 40: LEDs: Revenue and Gross Margin Targets
© 2018 Cree, Inc. All rights reserved 40 LEDs $550M GM – 27% (2017) $793M GM – 31% (2022) Stickier applications High-power Lighting, Automotive Lighting, Next-generation Video Screen, Specialty Lighting Broader SAM Cree Venture JV Modest revenue growth with good gross margin expansion OpEx Lean, Cap
Slide 41: LEDs
© 2018 Cree, Inc. All rights reserved 41 LEDs Industry’s strongest LED brand Best-in-class high-power technology Broad portfolio of application-optimized LED solutions Uniquely positioned to address markets that are more interesting to Cree
Slide 42: Focus in Differentiated Market Segments
© 2018 Cree, Inc. All rights reserved 42 Focus in Differentiated Market Segments HIGH P O W E R A P P LIC A TIO N O P TIMIZE D Automotive Lighting $1.6B Next-Generation Video $1.1B Specialty Lighting $0.7B New focus provides access to $4.6B SAM by 2022 in differentiated applications * Sources: IHS P
Slide 43: Cree Venture: Synergy for Growth
© 2018 Cree, Inc. All rights reserved 43 Cree Venture: Synergy for Growth Expanded portfolio to address larger mid-power opportunity IP, Brand & Channel High Volume / Cost Optimized Low cost, Large Scale Manufacturing Increase General Lighting SAM 5X - Low OpEx, No CapEx +
Slide 44: New Strategic Focus Drives Profits
© 2018 Cree, Inc. All rights reserved 44 New Strategic Focus Drives Profits G ros s Ma rgi n Time New focus combined with OpEx Lean/CapEx Light approach increases cash flow New focus Differentiate • High-power General Lighting • Automotive • Next-Generation Video Screen • Specialty Lighting Broader
Slide 45: LED Focus: Cree's Transformation Path
© 2018 Cree, Inc. All rights reserved 45 LED Focus where our best-in-class technology and application-optimized solutions are differentiated and valued • High-power technology provides the only solution • High-power general lighting • Automotive lighting • Application-optimized solutions solve the m
Slide 48: Lighting: Fix the Business
© 2018 Cree, Inc. All rights reserved 48 LIGHTING Fix the Business • Fix quality through improved processes and new product developments • Improve channel position and relationships • New product innovations to better position the portfolio--focused on higher specification and smart intelligent feat
Slide 49: Lighting Gross Margin Improvement
© 2018 Cree, Inc. All rights reserved 49 Lighting 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% FY17 FY22 Gross Margin Improvement 28% Quality & Reliability Improved processes & product developments ensuring field reliability and performance Channel Engagement Stronger alignment and support of strategic cha
Slide 51: Quality & Reliability
© 2018 Cree, Inc. All rights reserved 51 Quality & Reliability Key Drivers: • Improved process controls resulting in quality product developments • State-of-the art reliability lab • Resolution & reduction of field claims Early Indications: • Design & process improvements preventing new issues from
Slide 52: Channel Engagement
© 2018 Cree, Inc. All rights reserved 52 Channel Engagement Key Drivers: • Stronger agent alignment & support • Distributor partnerships & growth programs • Stock & Flow penetration • Service enhancements & Lead Time Optimization Early Indications: • Increased field selling resources by >75% • Align
Slide 53: New Product Innovation
© 2018 Cree, Inc. All rights reserved 53 New Product Innovation Key Drivers: • Engineering teams refocused on product development • Complete portfolio optionality to increase specification strength & margin opportunity • Intelligent product solutions that delight customers and solve new problems Ear
Slide 54: Lighting
© 2018 Cree, Inc. All rights reserved 54 Lighting Recognized leader in indoor and outdoor LED lighting—delivering better light experiences without compromise Lighting technologies delivering brilliantly efficient, radically simple and exceptional high quality products Built on a foundation of relent
Slide 55: Lighting: Fix the Business
© 2018 Cree, Inc. All rights reserved 55 LIGHTING Fix the Business • Fix quality through improved processes and new product developments • Improve channel position and relationships • New product innovations to better position the portfolio--focused on higher specification and smart intelligent feat
Slide 58: Cree Transformation – Revenue Expansion
© 2018 Cree, Inc. All rights reserved 58 Cree Transformation – Revenue Expansion [PERCEN TAGE] [PERCE NTAGE] [PERCEN TAGE] $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 WS LED Lighting $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 WS LED Lighting FY 2017 - $1,473 (millions) Actual FY 2022 - $2,3
Slide 59: Gross Margin and Earnings Power Expansion
© 2018 Cree, Inc. All rights reserved 59 Gross Margin and Earnings Power Expansion Long Range Model (non-GAAP) • GM 40+% • OM 20+% • Wolfspeed targets high revenue growth, strong gross margins with good fall through to bottom line • LED targets modest revenue growth and gross margin expansion, OPEX
Slide 60: Capital Intensity
© 2018 Cree, Inc. All rights reserved 60 Capital Intensity 0% 2% 4% 6% 8% 10% 12% 14% 16% FY17 FY18 FY19 FY20 FY21 FY22 Ca pEx % to Rev Capital Intensity Targets • Near term (2018 through 2020) spend to expand Wolfspeed scale to support accelerated growth • Targeted operating cash flows exceed capex
Slide 61: Powering Earnings Growth
© 2018 Cree, Inc. All rights reserved 61 Powering Earnings Growth 8% 26% 0% 5% 10% 15% 20% 25% 30% F18Q2 FY22 EB ITD A % to Re ven ue EBITDA $- $250 $500 $750 $1,000 $1,250 $1,500 F18Q2 FY22 C& I ($ 's i n M 's) Cash & Investments Organic growth in segments that reward value • Provides profit expans
Slide 63: Cree's Transformation Path
© 2018 Cree, Inc. All rights reserved 63 WOLFSPEED A Powerhouse Semiconductor company focused on Silicon Carbide (SiC) and Gallium Nitride (GaN) LED Focus where our best-in-class technology and application-optimized solutions are differentiated and valued LIGHTING Fix the Business Cree’s Transformat
Slide 66: Non-GAAP Financial Measures
© 2018 Cree, Inc. All rights reserved 66 Non-GAAP Financial Measures This presentation includes certain non-GAAP financial measures and targets. Cree's management evaluates results and makes operating decisions using both GAAP and non- GAAP measures included in this presentation. Non-GAAP results ex
Slide 67: Appendix -- Non-GAAP Measures Reconciliation
© 2018 Cree, Inc. All rights reserved 67 Appendix -- Non-GAAP Measures Reconciliation Non-GAAP Gross Margin Reconciliation FY18Q2 Non-GAAP Operating Margin Reconciliation FY18Q2 EBITDA Reconciliation FY18Q2 Revenue $ 367.9 Revenue $ 367.9 Revenue $ 367.9 GAAP Gross Profit $ 92.6 GAAP Operating (loss

Cree — Investor Day (February 2018) on 6ix

Wolfspeed — Cree — Investor Day (February 2018)

Slide 1: © 2018 Cree, Inc. All rights reserved

Slide 2: Investor Relations, February 26th, 2018

Slide 3: Welcome and Agenda

Slide 4: Note on Forward-Looking Statements

Slide 5: Gregg Lowe, CEO

Slide 6: Wolfspeed: A Powerhouse Semiconductor Company

Slide 7: LED Focus: Cree's Transformation Path

Slide 8: Lighting: Fix the Business

Slide 9: Cree Transformation – Revenue Expansion

Slide 10: Gross Margin and Earnings Power Expansion

Slide 11: Cree's Transformation Path

Slide 12: © 2018 Cree, Inc. All rights reserved

Slide 13: Wolfspeed

Slide 14: Wolfspeed: A Powerhouse Semiconductor Company

Slide 15: Silicon Carbide and GaN: Fundamental Advantages

Slide 16: Wolfspeed Business Overview

Slide 17: Years of Global Silicon Carbide and GaN Leadership

Slide 18: Wolfspeed's Leadership in Power and RF Devices

Slide 19: EV Market: More than $60B in Investments Announced

Slide 20: Even Modest EV Adoption Drives Significant Opportunity

Slide 21: Power

Slide 22: Key Markets Driving SiC Power Market Expansion

Slide 23: On-Vehicle SiC Has Unprecedented Potential for Growth

Slide 24: Fast Chargers Could Drive a $500 Million SAM by 2022

Slide 25: Solar Silicon Carbide Adoption Accelerating

Slide 26: SiC Enables More Efficient Solar Inverters

Slide 27: RF

Slide 28: GaN RF Device Market Expanding to >$1B

Slide 29: GaN – Enabling Faster 4G and the Transition to 5G

Slide 30: Non-Telecom RF Market CAGR 25% Through 2022

Slide 31: Materials

Slide 32: A More Powerful, Efficient World Enabled by SiC and GaN

Slide 33: SiC Materials Innovation Leadership

Slide 34: SiC Materials Market Expanding To >$1B by 2022

Slide 35: A More Powerful, Efficient World Enabled by SiC and GaN

Slide 36: Wolfspeed: A Powerhouse Semiconductor Company

Slide 37: © 2018 Cree, Inc. All rights reserved

Slide 38: Dave Emerson, LED Business

Slide 39: LED Focus: Cree's Transformation Path

Slide 40: LEDs: Revenue and Gross Margin Targets

Slide 41: LEDs

Slide 42: Focus in Differentiated Market Segments

Slide 43: Cree Venture: Synergy for Growth

Slide 44: New Strategic Focus Drives Profits

Slide 45: LED Focus: Cree's Transformation Path

Slide 46: © 2018 Cree, Inc. All rights reserved

Slide 47: Craig Atwater, Lighting Business

Slide 48: Lighting: Fix the Business

Slide 49: Lighting Gross Margin Improvement

Slide 50: Lighting FY2017 Revenue and Applications

Slide 51: Quality & Reliability

Slide 52: Channel Engagement

Slide 53: New Product Innovation

Slide 54: Lighting

Slide 55: Lighting: Fix the Business

Slide 56: © 2018 Cree, Inc. All rights reserved

Slide 57: Mike McDevitt, CFO – Business Model

Slide 58: Cree Transformation – Revenue Expansion

Slide 59: Gross Margin and Earnings Power Expansion

Slide 60: Capital Intensity

Slide 61: Powering Earnings Growth

Slide 62: Gregg Lowe, CEO

Slide 63: Cree's Transformation Path

Slide 64: © 2018 Cree, Inc. All rights reserved

Slide 65: Appendix

Slide 66: Non-GAAP Financial Measures

Slide 67: Appendix -- Non-GAAP Measures Reconciliation