Wolfspeed, Inc.

Good afternoon. Thank you for standing by and welcome to the Wolf Speed Incorporated second quarter fiscal year 2023 earnings call. Currently, all participants are in listen mode only. All lines can be placed on mute to prevent any background noise. At the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you'd like to withdraw your question, please press star followed by the number two. We ask that you limit yourself to asking one question and one follow-up. Thank you. Please note today's call is being recorded. I'd now like to hand the conference over to our first speaker today, Tyler Groenbach, Vice President of Investor Relations. Please go ahead.

Thank you, and good afternoon, everyone. Welcome to WolfSPEED's second quarter fiscal 2023 conference call. Today, WolfSPEED CEO, Greg Lowe, and WolfSeed CFO Neil Reynolds will report on the results for the second quarter of fiscal year 2023. Please note that we will be presenting non-GAAP financial results during today's call, which is consistent with how management measures WolfSeed's results internally. Non-GAAP results are not in accordance with GAAP and may not be comparable to non-GAAP information provided by other companies. Non-GAAP information should be considered a supplement to and not a substitute for financial statements prepared in accordance with GAAP. A reconciliation to the most directly comparable GAAP measures is in our press release and posted in the investor relations section of our website along with a historical summary of other key metrics. Today's discussion includes forward-looking statements about our business outlook and we may make other forward-looking statements during the call. Such forward-looking statements are subject to numerous risks and uncertainties. Our press release today and the SEC filings noted in the release mention important factors that could cause actual results to differ materially, including risks related to the impact of the COVID-19 pandemic. During the Q&A session, we would ask that you limit yourself to one question and one follow-up so that we can accommodate as many questions as possible during today's call. If you have any additional questions, please feel free to contact us after the call. And now I'd like to turn the call over to Greg.

Thanks, Tyler, and good afternoon, everyone. Before we get into the results of the quarter, I'd like to take a moment to remember our late founder and CTO, John Palmer. We had a celebration of life last weekend during which we announced that we would dedicate our Siler City manufacturing facility in his memory, naming it the John Palmer Manufacturing Center for Silicon Carbide. All of us knew John through his nickname, JP, and so the nickname for our facility will be the JP. He worked for over 35 years to advance and promote silicon carbide, and largely as a result of his efforts, the world is recognizing its potential. We believe that silicon carbide is on the cusp of mass adoption and that our long-term outlook remains on track. First, electric vehicles were the bright spot in the auto market in 2022, despite many headlines that auto sales have slowed. Global EV sales grew more than 65% year over year and represented 10% of all vehicles sold in the calendar year. We've seen this overwhelming demand play out at Woolspeed, as our recent partnerships with industry leaders such as Jaguar, Land Rover, and Mercedes-Benz point to the strength in the demand for EVs and our ability to take share in this space. We remain confident in the industry's strong, long-term fundamentals and believe Woolspeed is best positioned to capitalize on the rapidly growing demand. Second, our $1.5 billion of design-ins in the quarter point to continued robust demand for our power devices. To date, 46% of our design-ins have converted to design wins, representing more than 1,800 projects. We are coming off multiple quarters of record design-ins, with a total of more than $16 billion of design-ins over the last three years. Now, of course, there will be some variability in our design-in numbers from quarter to quarter, based on timing of new agreements and decisions by customers. We anticipate that as our manufacturing capacities expand with new facilities, we will continue winning in the device marketplace. Third, we continue our market leadership position in the materials business, the aspect of our business with the highest barriers to entry. We recently announced an expanded agreement with another leading supplier of silicon carbide materials, which illustrates the intense demand for silicon carbide. From where we sit, the industry remains supply constrained, and this will continue to be the case for the foreseeable future. It is clear to us that the opportunity in silicon carbide technology is generational, given the pace of adoption we've experienced over the last few quarters. At our investor day, I remarked that I have not seen growth like this in my 30 years in semis. and that view has not changed. While customer interest remains strong across both materials and power devices, as we discussed previously, silicon carbide production and manufacturing can present challenges along the way. Our Durham Crystal Growth operation, which is the world's largest silicon carbide materials factory, currently supplies our entire device business and a significant share of the merchant market. However, that is still not enough to support the massive accelerating demand for silicon carbide. With the intense growth in demand for both captive and merchant wafers comes the challenges of growing our materials output as well. We've continued to refine our crystal growth operations and had a recent breakthrough in our ability to grow taller boules. The initial challenges in managing these taller boules in our back-end processing have been resolved. resulting in significantly higher yields. It will take a few months before we return to normal production schedule for these materials, as the improved product makes its way through the whip. But we are encouraged by the results that we've been able to achieve with these tolerables. Long term, the John Palmer Manufacturing Center for Silicon Carbide is critical to addressing the supply-demand disconnect. It will support our expanding device footprint at both Mohawk Valley and a soon-to-be-announced FAB, as well as the ever-growing demand for merchant wafers. Construction of the JP is progressing well since groundbreaking in September, and things remain on track as we updated during our last investor day. Regarding the progress at Mohawk Valley, we previously said that we anticipate revenue flowing through the FAB in the second half of fiscal 2023. We remain on a trajectory to meet that target, and that will largely depend on our ability to complete qualifications and ramp the supply of 200 millimeter wafers, which we believe we will achieve. We continue to successfully run test slots through Mohawk Valley, which gives us confidence that we're ready to begin scaling production and recognizing revenue from Mohawk Valley in the fourth quarter of this fiscal year. As a reminder, Mohawk Valley is a first-of-its-kind fab, purpose-built to produce next-generation silicon carbide power devices. We're in the final stages prior to scaling production in Mohawk Valley, and one of my top priorities over the next few quarters is to ensure that we execute on that plan. We have a strong team and clear strategy in place and are competent in our ability to deliver strong results for our shareholders. While there may be some variability in our short-term results as we qualify and scale the world's first 200-millimeter silicon carbide device fab, while also scaling the first production of 200-millimeter silicon carbide wafers, we are well-positioned to capitalize on the explosive growth that we see through the end of this decade. Now I'd like to turn the call over to Neal to discuss our quarterly results. Neal?