Wolfspeed, Inc. · NYSE:WOLF
Wolfspeed — Investor Day (October 2022)
77 slides from Wolfspeed's investor day presentation, Oct 31, 2022
Slide 1: Wolfspeed Investor Day
Wolfspeed Investor Day OCTOBER 31, 2022 WOLFSPEED CONFIDENTIAL &PROPRIETARY ©2022 Wolfspeed, Inc. All rights reserved. Wolfspeed® and the Wolfstreak logo are registered trademarks and the Wolfspeed logo is a trademark of Wolfspeed, Inc. 1
Slide 2: Welcome
Welcome TYLER GRONBACH | VP OF INVESTOR RELATIONS WOLFSPEED CONFIDENTIAL & PROPRIETARY © 2022 Wolfspeed, Inc. All rights reserved. Wolfspeed® and the Wolfstreak logo are registered trademarks and the Wolfspeed logo is a trademark of Wolfspeed, Inc.
Slide 3: Forward-Looking Statements and Non-GAAP Measures
FORWARD-LOOKING STATEMENTS AND NON-GAAP MEASURES Note on Forward-Looking Statements This presentation 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-look
Slide 4: Speakers & Agenda
SPEAKERS & AGENDA 1 STRATEGIC UPDATE GREGG LOWE, PRESIDENT & CEO 5 FINANCIAL UPDATE NEILL REYNOLDS, EVP & CFO 2 TECHNOLOGY OVERVIEW ELIF BALKAS, VP OF RESEARCH & DEVELOPMENT, 6 Q&A SESSION GREGG LOWE & NEILL REYNOLDS MATERIALS 3 OPERATIONS UPDATE 7 FIRESIDE CHAT THIERRY BOLLORÉ, CEO, JAGUAR LAND ROV
Slide 5: Strategic Overview
Strategic Overview GREGG LOWE | PRESIDENT & CEO WOLFSPEED CONFIDENTIAL & PROPRIETARY © 2022 Wolfspeed, Inc. All rights reserved. Wolfspeed® and the Wolfstreak logo are registered trademarks and the Wolfspeed logo is a trademark of Wolfspeed, Inc.
Slide 6: Jaguar Land Rover Partners with Wolfspeed for Silicon Carbide Semiconductor Technology
JAGUAR LAND ROVER PARTNERS WITH WOLFSPEED FOR SILICON CARBIDE SEMICONDUCTOR TECHNOLOGY Key Partnership Facts • Reimagine strategy transforming Jaguar Land Rover into an electric-first business • Wolfspeed enables a secure supply chain for Silicon Carbide devices for next generation vehicles • Wolfsp
Slide 7: Last Year I Took a Bike Ride…
LAST YEAR I TOOK A BIKE RIDE… …and spoke about the importance of Wolfspeed’s focus on where we’re going… WOLFSPEED CONFIDENTIAL & PROPRIETARY © 2022 Wolfspeed, Inc. All rights reserved. Wolfspeed® and the Wolfstreak logo are registered trademarks and the Wolfspeed logo is a trademark of Wolfspeed, I
Slide 8: …This Year I Took a Roadtrip
…THIS YEAR I TOOK A ROADTRIP CLEVELAND Some Things I Learned Driving an EV with a longer range definitely 1 calms “range anxiety” The charging stations work, and were 2 RALEIGH nearly perfect But the charging infrastructure will need 3 improvements soon 4 Charging is a social event WOLFSPEED CONFIDE
Slide 9: Automakers' Announced Investments in Next-Gen Vehicles Continue to Increase
AUTOMAKERS’ ANNOUNCED INVESTMENTS IN NEXT-GEN VEHICLES ONLY CONTINUE TO INCREASE Great Wall $8 Jaguar Land Rover Nissan-Renault-Mitsubishi $11 launches goal of Toyota $14 Tesla Jaguar electric only $99 vehicles from 2025 Chongqing Changan $15 onwards Hyundai $16 GM plans to transition to an all-elec
Slide 10: EV Demand Is Driving Acceleration of Silicon Carbide Adoption
EV DEMAND IS DRIVING ACCELERATION OF SILICON CARBIDE ADOPTION BEV & SiC Adoption Rates1 (%) Key Drivers 70% • Estimated 92.5M vehicle sales in FY27 60% • Battery Electric Vehicle (BEV) ramp 50% • Electric vehicle charging infrastructure momentum 40% • New applications enabled by Silicon Carbide 30%
Slide 11: Silicon Carbide Content in EVs Is Increasing
SILICON CARBIDE CONTENT IN EVs IS INCREASING The transition from ICE to BEV powertrain nearly doubles the amount of semiconductor content per vehicle from ~$500 per vehicle to ~$1,000 per vehicle1; ~90% of Silicon Carbide content in an EV is the inverter Value of Silicon Carbide Content in EVs ($M)2
Slide 12: Success in EVs Driving SiC Adoption Across Other Mobility Segments
SUCCESS IN EVs IS DRIVING SILICON CARBIDE ADOPTION ACROSS OTHER MOBILITY SEGMENTS AND BROADER INDUSTRIAL APPLICATIONS $5B+ opportunity in transportation applications Over $1B opportunity in non-transportation by 2027, driven largely by automotive1 applications by 20271 Arrow Electronics partnership
Slide 13: Macro Tailwinds Bolster Wolfspeed Device Opportunity Pipeline
MACRO TAILWINDS BOLSTER WOLFSPEED DEVICE OPPORTUNITY PIPELINE Announcing the construction of the world’s largest Silicon Carbide device fab in 2019 helped build tremendous momentum, which resulted in a large and growing opportunity pipeline for Silicon Carbide devices $40B $35B $25B $20B $18B $15B $
Slide 14: We Continue to Capture Design-Ins and Capitalize on This Pipeline
WE CONTINUE TO CAPTURE DESIGN-INS AND CAPITALIZE ON THIS PIPELINE Cumulative Design-Ins ($M) Key Takeaways $14,800 • $14.8 billion of cumulative Design-ins1 since 2019 • Design-in to Design-win conversion rate of ~43% ~$11,000 • Announcement of Siler City Materials Facility and buildout of Mohawk Va
Slide 15: Our Expectations One Year Ago at Investor Day 2021
OUR EXPECTATIONS ONE YEAR AGO AT INVESTOR DAY 2021 Investor Day 2021 Investor Day 2022 What’s Happened Publicly Announced EV $330B+ $500B+ Investment Goals by 2030 Pull forward in demand curve for Silicon Carbide driven by increasing adoption Opportunity Pipeline $18B $40B of EVs and increasing adop
Slide 16: Leading to the World's Largest Silicon Carbide Manufacturing Footprint
LEADING TO THE WORLD’S LARGEST SILICON CARBIDE MANUFACTURING FOOTPRINT Purpose-built Silicon Carbide fabs Deliver >11x Revenue at Scale than Durham Power Device Fab Siler City Facility exponentially increases materials capacity over the Durham Facility, which today accounts for >60% of the entire in
Slide 17: Our Focus Capitalizes on Massive Opportunity
OUR FOCUS CAPITALIZES ON MASSIVE OPPORTUNITY $40 billion opportunity 1 pipeline presents a window to expand our reach in the market 2 We are exponentially increasing capacity with greenfield fabs and facilities to support $14.8 billion in Design-ins We are exploring new 3 markets, and we are excited
Slide 18: Together. Let's Reimagine a More Sustainable World.
LET’S REIMAGINE A MORE SUSTAINABLE WORLD. TOGETHER. WOLFSPEED WOLFSPEED CONFIDENTIAL CONFIDENTIAL & PROPRIETARY & PROPRIETARY © 2022 © 2021 Wolfspeed, Wolfspeed, Inc. All Inc. rights All rights reserved. reserved. Wolfspeed® Wolfspeed® and the andWolfstreak the Wolfstreak logo are logoregistered are
Slide 19: Technology Update
Technology Update ELIF BALKAS | VP OF RESEARCH AND DEVELOPMENT, MATERIALS WOLFSPEED CONFIDENTIAL & PROPRIETARY © 2022 Wolfspeed, Inc. All rights reserved. Wolfspeed® and the Wolfstreak logo are registered trademarks and the Wolfspeed logo is a trademark of Wolfspeed, Inc.
Slide 20: Introduction – Elif Balkas
INTRODUCTION – ELIF BALKAS Invested leader in technology with the capacity to efficiently lead heterogeneous teams while respecting their uniqueness to collectively achieve what others say can’t be done I love About Me technology in application and VP of Research and Development Materials, Wolfspeed
Slide 21: Wolfspeed Is the Leading Pure Play, Vertically Integrated Silicon Carbide Company
WOLFSPEED IS THE LEADING PURE PLAY, VERTICALLY INTEGRATED SILICON CARBIDE COMPANY Materials Devices Packaged Parts Silicon Carbide Wafers and Wafer Fabrication (MOSFETs, Diodes, Modules, GaN HEMTs, Crystals Epitaxy (Bare Die) MMICs) WOLFSPEED CONFIDENTIAL & PROPRIETARY © 2022 Wolfspeed, Inc. All rig
Slide 22: What Is Silicon Carbide?
WHAT IS SILICON CARBIDE? Combination of silicon Crystalizes at very high and carbon in a temperature and can crystalline structure take many (>200) crystalline structures Can be electrical Superior mechanical, insulator or conductor chemical and thermal properties, all combined Variety of applicatio
Slide 23: Producing Silicon Carbide Materials at Scale Presents Unique Challenges
PRODUCING SILICON CARBIDE MATERIALS AT SCALE TECHNOLOGY PRESENTS UNIQUE CHALLENGES Powering more, consuming Growing Silicon Carbide Silicon Carbide doesn’t melt; Silicon Carbide can form 200+ less.TM crystals requires a controlled unlike silicon, it evaporates crystal structures – only ONE environme
Slide 24: Cycles of Learning Enable Continual Optimization of SiC Materials Production
CYCLES OF LEARNING ENABLE CONTINUAL OPTIMIZATION OF SILICON CARBIDE MATERIALS PRODUCTION WOLFSPEED CONFIDENTIAL & PROPRIETARY © 2022 Wolfspeed, Inc. All rights reserved. Wolfspeed® and the Wolfstreak logo are registered trademarks and the Wolfspeed logo is a trademark of Wolfspeed, Inc. 24
Slide 25: Die Count Advantage of Large Diameter Silicon Carbide Wafers
DIE COUNT ADVANTAGE OF LARGE DIAMETER SILICON CARBIDE WAFERS 32 mm2 die 150mm 200mm # whole die 448 845 % edge die 14 7 More devices from a single wafer with enhanced productivity and efficiency WOLFSPEED CONFIDENTIAL & PROPRIETARY © 2022 Wolfspeed, Inc. All rights reserved. Wolfspeed® and the Wolfs
Slide 26: Micropipes and Projected Fab Die Yield
MICROPIPES AND PROJECTED FAB DIE YIELD 5x5 die maps Micropipe is an open- core structural defect and primary device killer 150mm 200mm 200mm Silicon Carbide quality is equal to or better than 150mm WOLFSPEED CONFIDENTIAL & PROPRIETARY © 2022 Wolfspeed, Inc. All rights reserved. Wolfspeed® and the Wo
Slide 27: Silicon Carbide Volume at Wolfspeed
SILICON CARBIDE VOLUME AT WOLFSPEED n-type 4H-SiC Crystal Volume Normalized to 2016 200mm Silicon Carbide Volume 200mm Silicon Carbide volume trajectory is now equivalent to 150mm volume in 2016 WOLFSPEED CONFIDENTIAL & PROPRIETARY © 2022 Wolfspeed, Inc. All rights reserved. Wolfspeed® and the Wolfs
Slide 28: Leveraging Deep Silicon Carbide Knowledge After 35 Years of Industry Leadership
LEVERAGING DEEP SILICON CARBIDE KNOWLEDGE AND TECHNICAL EXPERTISE AFTER 35 YEARS OF INDUSTRY LEADERSHIP Silicon Carbide Our combined 200mm Silicon 200mm Silicon is the new Silicon Carbide Carbide quality Carbide volume generation expertise, equal to or is increasing semiconductor technology and bett
Slide 29: Together. Let's Reimagine a More Sustainable World.
LET’S REIMAGINE A MORE SUSTAINABLE WORLD. TOGETHER. WOLFSPEED WOLFSPEED CONFIDENTIAL CONFIDENTIAL & PROPRIETARY & PROPRIETARY © 2022 © 2021 Wolfspeed, Wolfspeed, Inc. All Inc. rights All rights reserved. reserved. Wolfspeed® Wolfspeed® and the andWolfstreak the Wolfstreak logo are logoregistered are
Slide 30: Operations Update
Operations Update REX FELTON | SVP GLOBAL OPERATIONS MISSY STIGALL | VP, NC FAB OPERATIONS ADAM MILTON | VP, MOHAWK VALLEY FAB LISA FRITZ | VP, GLOBAL QUALITY WOLFSPEED CONFIDENTIAL & PROPRIETARY © 2022 Wolfspeed, Inc. All rights reserved. Wolfspeed® and the Wolfstreak logo are registered trademarks
Slide 31: Speakers
SPEAKERS REX FELTON MISSY STIGALL ADAM MILTON LISA FRITZ SENIOR VICE PRESIDENT, VICE PRESIDENT, VICE PRESIDENT, VICE PRESIDENT, GLOBAL OPERATIONS NC FAB OPERATIONS MOHAWK VALLEY FAB GLOBAL QUALITY WOLFSPEED CONFIDENTIAL & PROPRIETARY © 2022 Wolfspeed, Inc. All rights reserved. Wolfspeed® and the Wol
Slide 32: We Are Wolfspeed, We Are OnePack
WE ARE WOLFSPEED, WE ARE ONEPACK Global Operations Vision • Safe, Right, Fast Mentality • Nimble and Agile • OnePack Culture: Make it Personal and Win • Reaching for Perfection and Catching Excellence WOLFSPEED CONFIDENTIAL & PROPRIETARY © 2022 Wolfspeed, Inc. All rights reserved. Wolfspeed® and the
Slide 33: Siler City – World's Largest Silicon Carbide Materials Facility
SILER CITY – WORLD’S LARGEST SILICON CARBIDE MATERIALS FACILITY Wolfspeed Durham: current world’s largest Silicon Carbide Materials facility Key Siler City Takeaways • Site in excess of 400 acres; using 250 acres • Between 1.5M-1.7M sq ft in the first phase • Greater than 10X the current manufacturi
Slide 34: Siler City vs Durham – Materials Manufacturing Space Comparison
SILER CITY VS DURHAM – MATERIALS MANUFACTURING SPACE COMPARISON Current Durham Materials facility footprint overlaid on Siler City footprint WOLFSPEED CONFIDENTIAL & PROPRIETARY © 2022 Wolfspeed, Inc. All rights reserved. Wolfspeed® and the Wolfstreak logo are registered trademarks and the Wolfspeed
Slide 35: Wolfspeed World Class Manufacturing
WOLFSPEED WORLD CLASS MANUFACTURING OnePack culture of operations excellence, automotive quality and productivity Manufacturing Execution Target Zero Defects Quality Structured Dispo Guidelines, Detection Yield Top 10 by Tech Problem Solving – 10% reduction in Multi-Factory Flow Methods, Sampling an
Slide 36: North Carolina Device Fab Capacity
NORTH CAROLINA DEVICE FAB CAPACITY Power Device Capacity Strategic capital investment in FY2021 increased output at a lower cost 50% More Capacity Ongoing process consolidations to get more out of the installed tool base and reduce single of a kind toolsets Continue to drive efficient tool stability
Slide 37: Improving Durham Device Yields
IMPROVING DURHAM DEVICE YIELDS Process Yield and Die Yield Continuous Improvement Opportunity Starting Material Process Defectivity Drivers • Task Forces focused on reducing human error • Tool Stability Teams driving better tool interactions with Silicon Carbide wafers • Process cornering for better
Slide 38: Mohawk Valley Fab – Key Differentiation
MOHAWK VALLEY FAB – KEY DIFFERENTIATION Mohawk Valley Fab was designed from the ground up for world class 200mm Silicon Carbide devices Best Best Best Best Quality People Systems Silicon Carbide • Automotive quality • World class team • 300mm silicon-like • Yield and reliability systems by design co
Slide 39: Mohawk Valley Fab: Key Differentiation
MOHAWK VALLEY FAB: KEY DIFFERENTIATION Mohawk Valley Fab was designed from the ground up for world-class 200mm SiC devices WOLFSPEED CONFIDENTIAL & PROPRIETARY © 2022 Wolfspeed, Inc. All rights reserved. Wolfspeed® and the Wolfstreak logo are registered trademarks and the Wolfspeed logo is a tradema
Slide 40: MVF Operational Performance
MVF OPERATIONAL PERFORMANCE Days per Mask Layer Roadmap Yield Performance Sample wafer map May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Wafer Yield Progress Projection Target DPML • Time from startup to yield greatly reduced by work in Albany pilot line. • All MOSFET lots producing yieldi
Slide 41: MVF Ramp Plan
MVF RAMP PLAN 200mm Wafer Starts Ramp Plan Production Equipment Installed 200mm Wafers Starts/Week Tool Count 22-Oct 22-Nov 22-Dec 23-Jan 23-Feb 23-Mar 23-Apr 23-May 23-Jun Today Q4 CY2022 Q1 CY2023 Q2 CY2023 Q4 CY2023 Q4 CY2022 Q1 CY2023 Q2 CY2023 Wafer Ramp Production Equipment Installation • Ramp
Slide 42: Purpose-Built Silicon Carbide Fab – Impact on Costs and Gross Margins
PURPOSE-BUILT SILICON CARBIDE FAB – IMPACT ON COSTS AND GROSS MARGINS 100% of Power Device revenue today is from Durham; by FY26 will be 80% from Mohawk Valley >50% Die Cost Reduction Mohawk Durham Valley Diameter 150mm 200mm Clean room 68 K 125 K Space (Sq Ft) Automation Low Full Labor Costs ~40% ~
Slide 43: Wolfspeed Quality Focus
WOLFSPEED QUALITY FOCUS Our strategy to integrate our people, systems and culture is driving our competitive advantage Build out experienced Invest in scaling quality Advance automotive quality engineering management systems culture through key teams and processes quality initiatives WOLFSPEED CONFI
Slide 44: Silicon Carbide Automotive Quality – A Wolfspeed Culture
SILICON CARBIDE AUTOMOTIVE QUALITY – A WOLFSPEED CULTURE Leading the industry transformation and defining the roadmap for Silicon Carbide quality Advancing Industry • Leading Silicon Carbide engagement in industry standards organizations [JEDEC, ECPE (including AQG), ZVEI, ICE, SEMI] Standards • Aut
Slide 45: Building Our Quality Culture
BUILDING OUR QUALITY CULTURE Delivering on customer expectations through key quality initiatives ONE PACK CULTURE • High quality product at optimized cost ATTITUDE • Increased • Proactive mindset customer satisfaction BEHAVIOR • Enable zero defects • Active engagement • Meet automotive PROCESSES in
Slide 46: Together. Let's Reimagine a More Sustainable World.
LET’S REIMAGINE A MORE SUSTAINABLE WORLD. TOGETHER. WOLFSPEED WOLFSPEED CONFIDENTIAL CONFIDENTIAL & PROPRIETARY & PROPRIETARY © 2022 © 2021 Wolfspeed, Wolfspeed, Inc. All Inc. rights All rights reserved. reserved. Wolfspeed® Wolfspeed® and the andWolfstreak the Wolfstreak logo are logoregistered are
Slide 47: Financial Overview
Financial Overview NEILL REYNOLDS | EVP & CFO WOLFSPEED CONFIDENTIAL & PROPRIETARY © 2022 Wolfspeed, Inc. All rights reserved. Wolfspeed® and the Wolfstreak logo are registered trademarks and the Wolfspeed logo is a trademark of Wolfspeed, Inc.
Slide 48: Steepening Demand Curve Drives Investment and Improved Outlook
STEEPENING DEMAND CURVE FOR SILICON CARBIDE SOLUTIONS DRIVES INVESTMENT AND IMPROVED OUTLOOK Expanding Executing on Growing and Investing in leading market growth plans diversified capacity and position with to create a $40B pipeline people to strong barriers global supported by continue to to entry
Slide 49: What's Changed in the Market Since Investor Day 2021
WHAT’S CHANGED IN THE MARKET SINCE INVESTOR DAY 2021 Investor Day 2021 Investor Day 2022 What’s Happened FY26 Power Device Market $6B $9B Outlook Increasing adoption of EVs Opportunity Pipeline $18B $40B and increasing adoption of Silicon Carbide in EVs Cumulative Design-Ins1 $5B $14.8B 1Design-in d
Slide 50: Market Is Rapidly Growing – Uniquely Positioned to Capture Share
MARKET IS RAPIDLY GROWING – UNIQUELY POSITIONED TO CAPTURE SHARE Power Device Market Outlook Automotive Device Opportunity in FY20271 $18B - $20B Inverter OBS & DC/DC $11B Drivers & Assumptions $6B • Total Device market growing with a 28% CAGR • Automotive growing at a 30% CAGR between FY22 - $3B FY
Slide 51: Increased Demand Translating into Accelerated Design-Ins
INCREASED DEMAND TRANSLATING INTO ACCELERATED DESIGN-INS Opportunity pipeline for devices more Sales team has continued to keep pace than doubled over last fiscal year converting pipeline into Design-ins Opportunity Pipeline Cumulative Design-Ins $40B $14.8B FY2019 FY2020 FY2021 FY2022 Q1FY2023 FY20
Slide 52: Annual Design-Ins Deliver Long Tail Revenue Opportunity
ANNUAL DESIGN-INS DELIVER LONG TAIL REVENUE OPPORTUNITY Design cycles, while long, are sticky and create multi-year revenue streams 2-4 Years Design Cycle Illustrative Revenue Profile from Auto Design-In Identification Supplier Commitment Design & SOP Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
Slide 53: High Levels of Revenue Visibility Through End of the Decade
HIGH LEVELS OF REVENUE VISIBILITY THROUGH END OF THE DECADE Illustrative snapshot of cumulative Design-ins (as of Q1FY23) translated to revenue New opportunities in $40B pipeline support Non-Automotive Automotive next decade of revenue growth $ MILLIONS FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 F
Slide 54: What's Changed in Our Revenue Outlook and Capex Cadence
WHAT’S CHANGED IN OUR REVENUE OUTLOOK AND CAPEX CADENCE SINCE INVESTOR DAY 2021 Investor Day 2021 Investor Day 2022 What’s Happened FY26 Power Device Market $6B $9B Outlook Increasing adoption of EVs Opportunity Pipeline $18B $40B and increasing adoption of Silicon Carbide in EVs Cumulative Design-I
Slide 55: Wolfspeed Revenue Targeted to Grow Faster Than the Market
WOLFSPEED REVENUE TARGETED TO GROW FASTER THAN THE MARKET Revenue Outlook Drivers & Assumptions $4.0B • Revenue driven by strength across all product lines led by Power $0.7B • Power: ~60% CAGR • Materials: ~20% CAGR $0.4B • RF: ~18% CAGR • Devices expected to capture increasing share of revenue bet
Slide 56: Building Towards >$5B Power Device Footprint
BUILDING TOWARDS >$5B POWER DEVICE FOOTPRINT TO CAPTURE MASSIVE MARKET OPPORTUNITY BY END OF THE DECADE Total Annual Revenue Potential Potential Power Device Market $18B - $20B $5B $2.9B ~0.5B NF ~$2.0B MVF ~$0.4B DUR FY2022 FY2027 Total Annual Revenue Potential Market at 40% EV Penetration (Power D
Slide 57: Mohawk Valley – Purpose Built Robust Cash Flow Generation Vehicle
MOHAWK VALLEY – PURPOSE BUILT ROBUST CASH FLOW GENERATION VEHICLE Cash Flow Full utilization Expect $2B annual revenue Cash Neutral at 30 – 40% Expect to generate $1.2B cash utilization annually Net $1.5B CapEx + startup costs FY2020 FY2027 Mohawk Valley is the blueprint for future fab buildouts W
Slide 58: Capex Cadence Requires Facilities Investments in Advance of Revenue Growth
CAPEX CADENCE REQUIRES FACILITIES INVESTMENTS IN ADVANCE OF REVENUE GROWTH … CAPITAL RETURNS IMPROVE POST FACILITIES BUILD OUT Revenue Facilities (Fixed) Tools (Variable) $4.0B >$2B ~$1B FY2020 FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 Mohawk Valley Mohawk Valley Siler City Next Fab Started G
Slide 59: Building Largest, Automated 200mm Silicon Carbide Footprint
BUILDING LARGEST, STATE OF THE ART, AUTOMATED 200MM SILICON CARBIDE FOOTPRINT TO BEST SERVE INDUSTRY’S TOP CUSTOMERS Mohawk Valley Next Fab Siler City • ~$2B annual Power Device • ~$2.6B annual Power Device • 10x increase in Materials revenue targeted revenue targeted capacity at scale • 200mm Wafer
Slide 60: Strong Operating Cash Flows Nearer Term and Free Cash Flow Long Term
THIS CREATES STRONG OPERATING CASH FLOWS NEARER TERM AND STRONG FREE CASH FLOW GENERATION FOR THE LONG TERM Operating Cash Flow Free Cash Flow 1 >$0.8B >$1.3B ($0.7B) ($0.2B) FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 As fabs mature, they generate significant
Slide 61: Funding Plan - Thoughtfully Managing Dilution Is Top of Mind
FUNDING PLAN - THOUGHTFULLY MANAGING DILUTION IS TOP OF MIND $ Government Customer Private / Project Public Markets Incentives Funding Financing Range of options from Expressed interest in Private market & asset Public equity and debt various government funding to accelerate backed financing to mark
Slide 62: What's Changed on the Bottom-Line Since Investor Day 2021
WHAT’S CHANGED ON THE BOTTOM-LINE SINCE INVESTOR DAY 2021 AND WHAT DOES IT MEAN FOR OUR TARGET MODEL Investor Day 2021 Investor Day 2022 What’s Happened FY26 Power Device Market $6B $9B Outlook Increasing adoption of EVs and increasing Opportunity Pipeline $18B $40B adoption of Silicon Carbide in EV
Slide 63: Mohawk Valley Scale and Yields to Drive Gross Margin Performance
MOHAWK VALLEY SCALE, 200MM DIAMETER CHANGE, AND IMPROVING YIELDS TO DRIVE GROSS MARGIN PERFORMANCE Gross Margin (Non-GAAP)(1) Drivers & Assumptions 60% • Transition to Mohawk Valley: will have 50% lower 50% processing costs; greater than 50% CT improvement; 20 to 30 points improved yields over Durha
Slide 64: Clear Path to Gross Margin (Non-GAAP) Expansion
CLEAR PATH TO GROSS MARGIN (NON-GAAP)1 EXPANSION 50% - 54% ~45% Due to higher Power Device demand Mid 30% FY22 Optimize Wafer Diameter Power: MVF RF Diameter Higher Durham FY24 Continued FY27 Durham Change Cost / Scale / Transition Fab Mix Performance, Yields Scale Advantages Drivers & Assumptions L
Slide 65: Purpose-Built Silicon Carbide Fab – Impact on Costs and Gross Margins
PURPOSE-BUILT SILICON CARBIDE FAB – IMPACT ON COSTS AND GROSS MARGINS 100% of Power Device revenue today is from Durham; by FY26 will be 80% from Mohawk Valley >50% Die Cost Reduction Mohawk Durham Valley Diameter 150mm 200mm Clean room 68 K 125 K Space (Sq Ft) Automation Low Full Labor Costs ~40% ~
Slide 66: Revenue Expansion Provides Operating Leverage as Investment Payback Realized
REVENUE EXPANSION PROVIDES OPERATING LEVERAGE AS INVESTMENT PAYBACK REALIZED Non-GAAP OPEX % of Revenue(1) Drivers & Assumptions 60% • Improving operational scale and efficiency result in OpEx investments normalizing in long-term +37% pts operating • R&D investment dollars growing at 21% CAGR from 3
Slide 67: Wolfspeed Target Operating Model
WOLFSPEED TARGET OPERATING MODEL FY24 FY27 Drivers & Assumptions Revenue $1.6B $4.0B • Positioned to capitalize in key growth areas following significant period of investment CAGR vs 2022 ~44% ~40% • Transition to MVF improves gross margin trajectory GM% • Powerful secular trends and operating scale
Slide 68: Steepening Demand Curve Drives Investment and Improved Outlook
STEEPENING DEMAND CURVE FOR SILICON CARBIDE SOLUTIONS DRIVES INVESTMENT AND IMPROVED OUTLOOK Expanding Executing on Growing and Investing in leading market growth plans diversified capacity and position with to create a $40B pipeline people to strong barriers global supported by continue to to entry
Slide 69: Fireside Chat
Fireside Chat GREGG LOWE | CEO, WOLFSPEED THIERRY BOLLORÉ | CEO, JAGUAR LAND ROVER WOLFSPEED CONFIDENTIAL & PROPRIETARY © 2022 Wolfspeed, Inc. All rights reserved. Wolfspeed® and the Wolfstreak logo are registered trademarks and the Wolfspeed logo is a trademark of Wolfspeed, Inc.
Slide 70: Audience Q&A
Audience Q&A GREGG LOWE | PRESIDENT & CEO NEILL REYNOLDS | EVP & CFO WOLFSPEED CONFIDENTIAL & PROPRIETARY © 2022 Wolfspeed, Inc. All rights reserved. Wolfspeed® and the Wolfstreak logo are registered trademarks and the Wolfspeed logo is a trademark of Wolfspeed, Inc.
Slide 71: Appendix
Appendix WOLFSPEED CONFIDENTIAL & PROPRIETARY © 2022 Wolfspeed, Inc. All rights reserved. Wolfspeed® and the Wolfstreak logo are registered trademarks and the Wolfspeed logo is a trademark of Wolfspeed, Inc.
Slide 72: Non-GAAP Adjustments
NON-GAAP ADJUSTMENTS Wolfspeed excludes the following items from one or more of its non-GAAP measures when applicable: • Stock-based compensation expense. This expense consists of expenses for stock options, restricted stock, performance stock awards and employee stock purchases through its Employee
Slide 73: Non-GAAP Reconciliation: Gross Margin %
NON-GAAP RECONCILIATION: GROSS MARGIN % FY2022-FY2023 FY2024-FY2025 FY2027+ GAAP Gross Margin% Low to mid 30s ~40% 48%-52% Adjustments: Stock-based compensation expense 2% 1% 1% Factory underutilization costs 5% 4% 1% Non-GAAP Gross Margin% Mid 30s to 40% 45-50% 50%-54% FY2024 FY2026 FY2027 GAAP Gro
Slide 74: Non-GAAP Reconciliation: Operating Expense % of Revenue
NON-GAAP RECONCILIATION: OPERATING EXPENSE % OF REVENUE ($M) FY2021 FQ1'2023 FY2027 GAAP OPEX % 91% 64% ~25% Adjustments: Stock-based compensation expense 7% 7% 2% Amortization or impairment of acquisition-related intangibles 3% 1% 0% Abandonment of long-lived assets 14% 0% 0% Factory optimization r
Slide 75: Non-GAAP Reconciliation: Adjusted EBITDA
NON-GAAP RECONCILIATION: ADJUSTED EBITDA ($M) FY2024 FY2027 GAAP Net Income ~$(9) ~$788 Depreciation & amortization 201 619 Income tax expense $2 $188 Net interest expense $25 $35 EBITDA $219 $1,630 Adjustments: Stock-based compensation expense COGS $26 $30 OPEX $64 $76 Total Stock-Based Compensatio
Slide 76: Reconciliation: Free Cash Flow
RECONCILIATION: FREE CASH FLOW ($M) FY2022 FY2027 Cash Provided by Operating Activities ($154) >$1300 Purchases of PP&E and Patents, Net of Reimbursements ($512) ~($500) Free Cash Flow ($666) >$800 Free Cash Flow% of Revenue (-89%) >20% References Free Cash Flow figures presented on slide 60 and 67
Slide 77: Glossary of Terms
GLOSSARY OF TERMS Design-ins: customer commitments to purchase our product and are one of the factors we use to forecast long-term demand and future revenue. To meet the qualification of a design-in, the customer provides us with documentation (e.g., a letter of intent, statement of work or developm