Wolfspeed : Q3 FY24 Earnings Call

Wolfspeed FY24 Q3 Earnings

M A Y 1 , 2 0 2 4

WOLFSPEED CONFIDENTIAL & PROPRIETARY © 2024 Wolfspeed, Inc. All rights reserved. Wolfspeed® and the Wolfstreak logo are registered trademarks and the Wolfspeed logo is a trademark of Wolfspeed, Inc.

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FORWARD-LOOKING STATEMENTS AND NON-GAAP MEASURES

Note on Forward-Looking Statements

The schedules attached to this presentation are an integral part of the presentation. 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-looking statements. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about our plans to grow the business, our ability to achieve our targets for the fourth quarter of fiscal 2024 and periods beyond, our ability to meet targeted utilization rates at the Mohawk Valley Fab, and our market growth. Actual results could differ materially due to a number of factors including but not limited to, ongoing uncertainty in global economic and geopolitical conditions, such as the ongoing military conflict between Russia and Ukraine and the ongoing conflicts in the Middle East, changes in progress on infrastructure development or changes in customer or industrial demand that could negatively affect product demand, including as a result of an economic slowdown or recession, collectability of receivables and other related matters if consumers and businesses defer purchases or payments, or default on payments; risks associated with our expansion plans, including design and construction delays, cost overruns, the timing and amount of government incentives actually received, issues in installing and qualifying new equipment and ramping production, poor production process yields and quality control, and potential increases to our restructuring costs; the risk that we do not meet our production commitments to those customers who provide us with capacity reservation deposits or similar payments; the risk that we may experience production difficulties that preclude us from shipping sufficient quantities to meet customer orders or that result in higher production costs, lower yields and lower margins; our ability to lower costs; the risk that our results will suffer if we are unable to balance fluctuations in customer demand and capacity, including bringing on additional capacity on a timely basis to meet customer demand; the risk that longer manufacturing lead times may cause customers to fulfill their orders with a competitor's products instead; product mix; risks associated with the ramp-up of production of our new products, and our entry into new business channels different from those in which we have historically operated; our ability to convert customer design-ins to design-wins and sales of significant volume, and, if customer design-in activity does result in such sales, when such sales will ultimately occur and what the amount of such sales will be; the risk that the markets for our products will not develop as we expect, including the adoption of our products by electrical vehicle manufacturers and the overall adoption of electrical vehicles; the risk that the economic and political uncertainty caused by the tariffs imposed by the United States on Chinese goods, and corresponding Chinese tariffs and currency devaluation in response, may negatively impact demand for our products; the risk that we or our channel partners are not able to develop and expand customer bases and accurately anticipate demand from end customers, including production and product mix, which can result in increased inventory and reduced orders as we experience wide fluctuations in supply and demand; risks related to international sales and purchases; risks resulting from the concentration of our business among few customers, including the risk that customers may reduce or cancel orders or fail to honor purchase commitments; the risk that our investments may experience periods of significant market value and interest rate volatility causing us to recognize fair value losses on our investment; the risk posed by managing an increasingly complex supply chain (including managing the impacts of ongoing supply constraints in the semiconductor industry and meeting purchase commitments under take-or-pay arrangements with certain suppliers) that has the ability to supply a sufficient quantity of raw materials, subsystems and finished products with the required specifications and quality; risks relating to outbreaks of infectious diseases or similar public health events, including the risk of disruptions to our operations, supply chain, including our contract manufacturers, or customer demand; the risk we may be required to record a significant charge to earnings if our remaining goodwill or amortizable assets become impaired; risks relating to confidential information theft or misuse, including through cyber-attacks or cyber intrusion; our ability to complete development and commercialization of products under development; the rapid development of new technology and competing products that may impair demand or render our products obsolete; the potential lack of customer acceptance for our products; risks associated with ongoing litigation; the risk that customers do not maintain their favorable perception of our brand and products, resulting in lower demand for our products; the risk that our products fail to perform or fail to meet customer requirements or expectations, resulting in significant additional costs; risks associated with strategic transactions; and other factors discussed in our filings with the Securities and Exchange Commission (SEC), including our report on Form 10-K for the fiscal year ended June 25, 2023, and subsequent reports filed with the SEC. These forward-looking statements represent Wolfspeed's judgment as of the date of this presentation. Except as required under the U.S. federal securities laws and the rules and regulations of the SEC, Wolfspeed disclaims any intent or obligation to update any forward-looking statements after the date of this presentation, whether as a result of new information, future events, developments, changes in assumptions or otherwise.

Note on Non-GAAP Measures

This presentation highlights the Company's financial results on both a GAAP and a non-GAAP basis. The GAAP results include certain costs, charges and expenses that are excluded from non-GAAP results. By publishing the non-GAAP measures, management intends to provide investors with additional information to further analyze the Company's performance, core results and underlying trends. Wolfspeed's management evaluates results and makes operating decisions using both GAAP and non-GAAP measures included in this presentation. Non-GAAP results are not prepared in accordance with GAAP, and non-GAAP information should be considered a supplement to, and not a substitute for, financial statements prepared in accordance with GAAP. Investors and potential investors are encouraged to review the reconciliation of non-GAAP financial measures to their most directly comparable GAAP measures attached to this presentation.

Beginning with the fourth quarter of fiscal 2023, the Company no longer excludes start-up expenses from its non-GAAP measures and does not exclude underutilization from its non-GAAP measures. Prior period non-GAAP measures have been updated in this presentation to reflect the current presentation of the Company's non-GAAP measures. As a result of this change, previously published non-GAAP financial measures for the Company for prior periods which exclude start-up expenses are not directly comparable to the non-GAAP measures included herein.

WOLFSPEED CONFIDENTIAL & PROPRIETARY © 2024 Wolfspeed, Inc. All rights reserved. Wolfspeed® and the Wolfstreak logo are registered trademarks and the Wolfspeed logo is a trademark of Wolfspeed, Inc.

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WOLFSPEED AT A GLANCE

With the sale of the RF business, Wolfspeed is now the world's only pure-play, vertically integrated silicon carbide company

By the Numbers

$201 million FY24 Q3 revenue

The JP: world's largest and only dedicated 200mm silicon carbide materials facility

Multi-billion of planned capacity investments for materials &fab

#1

Producer of

silicon carbide

materials

$25B+

ofDesign-Ins forEV and I&E

$2.8 billion Power Device Design-In Awards in FY24 Q3

Mohawk Valley Fab: world's first 200 mm silicon carbide fab

Experienced team led by

semiconductor and

silicon carbide experts

30+

OEMs represented in Wolfspeed's

1st

First commercially available fully

WolfspeedRevenue1 ($M)

220

backlog of Design-Wins

qualified silicon carbide MOSFET

200$193M

180

160

$201M

35+years

Wolfspeed has been vertically

integrated making silicon carbide

semiconductors

7+trillion

Hours of silicon carbide research,

testing and production

FY23 Q3

FY24 Q3

WOLFSPEED CONFIDENTIAL & PROPRIETARY © 2024 Wolfspeed, Inc. All rights reserved. Wolfspeed® and the Wolfstreak logo are registered trademarks and the

1) All figures represent results from continuing operations

MOHAWK VALLEY UPDATE

Mohawk Valley Fab Revenue

$40M - $50M

$28M

$12M

$4M

$1M

FY23 Q4

FY24 Q1

FY24 Q2

FY24 Q3

FY24 Q4

Key Takeaways

• FY24 Q3 revenue contribution of $28M
• FY24 Q4 targeted revenue of $45M at the midpoint
• Achieved >16% utilization in April 2024
• On track to achieve 20% utilization by June 2024
• Die costs at MVF better than equivalent produced at Durham
• Very high yield for auto-grade devices on 200mm wafers
• Completed five more product transfers, including two MOSFET die and three discrete MOSFETS

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MATERIALS UPDATE

Building 10: Durham, NC

• On track to support ~25% utilization at Mohawk

Valley

• Consistently producing high-quality,high-yielding 200mm wafers

• 200mm automotive substrates already yielding

more than 150mm at Durham and surpassing internal expectations

The JP: Siler City, NC

• Began installing furnaces and connected to power grid

• Expect to:

• Fire up initial furnaces by end of Q2 CY24

• Qualify furnaces by end of Q3 CY24

• Produce initial silicon carbide boules by end of Q4 CY24

WOLFSPEED CONFIDENTIAL & PROPRIETARY © 2024 Wolfspeed, Inc. All rights reserved. Wolfspeed® and the Wolfstreak logo are registered trademarks and the Wolfspeed logo is a trademark of Wolfspeed, Inc.

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POWER DEVICE FOOTPRINT WILL HELP CAPTURE MASSIVE MARKET OPPORTUNITY BY END OF THE DECADE

Cumulative Power Device Design-Ins ($M) 1

Key Takeaways

~$960

$25,200

~$20,300

~$13,600

~$4,700

~$2,200

• $2.8B of Power Device Design-Ins in FY24 Q3, the

2nd largest on record

• 80% of which were for EV applications

• Demand continues to outstrip supply for

Wolfspeed EV devices, despite broader market

headwinds

• $0.9B of Power Device Design-Wins in FY24 Q3,

70% of which were for EV applications

• Over the next 3-5 years, more than 125 different

car models across more than 30 OEMs will

FY2020

FY2021

FY2022

FY2023

FY2024

contain Wolfspeed devices

1. All figures represent results from continuing operations NOTE: Design-In and Design-Win definitions in appendix

WOLFSPEED CONFIDENTIAL & PROPRIETARY © 2024 Wolfspeed, Inc. All rights reserved. Wolfspeed® and the Wolfstreak logo are registered trademarks and the Wolfspeed logo is a trademark of Wolfspeed, Inc.

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STRONG CONVERSION FROM DESIGN-INS TO DESIGN-WINS SINCE FY20

EV-dominantDesign-Win pipeline capitalizes on robust EV TAM while providing greater insight into future revenue due to longer design cycles

Power DWINs since FY201

FY24 YTD Power DWINs by Application

Value of New Power DWINs (per quarter)

Count of New Power DWINs (per quarter)	~$2,900

~80% of

total for EVs

~$900

FY2020

FY2021

FY2022

FY2023

FY2024

Powertrain		OBC/DC/DC		EV Charging
Solar		Storage		Server & Data Centers
AC & DC Power Source		Other

1. All figures represent results from continuing operations NOTE: Design-In and Design-Win definitions in appendix

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FY24 Q3 FINANCIAL PERFORMANCE - REVENUE1

$193M	$203M	$197M	$209M	$201M
102	107	101	108	102

91	96	96	101	99
FY23 Q3	FY23 Q4		FY24 Q1		FY24 Q2	FY24 Q3
			Materials		Devices

Key Takeaways

• Results came in above midpoint of guidance provided in January
• Revenue up 4% Y/Y and down 4% Q/Q
• • $102M of Power revenue
  • $99M of Materials revenue, second highest quarter on record

FY24 Q3 Drivers

• $28M contribution from Mohawk Valley
• EV device revenue up 48% year over year
• Offset by weakness in Industrial & Energy end-markets, particularly across Asia

WOLFSPEED CONFIDENTIAL & PROPRIETARY © 2024 Wolfspeed, Inc. All rights reserved. Wolfspeed® and the Wolfstreak logo are registered trademarks and the Wolfspeed logo is a trademark of Wolfspeed, Inc.

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1) All figures represent results from continuing operations

FY24 Q3 FINANCIAL PERFORMANCE - EPS AND MARGINS1

Key Takeaways

•	Non-GAAP gross margin of 15% compared to 34% the year prior2			Non-GAAP EPS
	- Non-GAAP gross margin down 140 bps Q/Q
	FY23 Q3	FY23 Q4	FY24 Q1	FY24 Q2	FY24 Q3
	- FY24 Q3 includes $30.4M, or approximately 1,500 bps, of
	underutilization costs
•	Non-GAAP EPS of $(0.62) compared to $(0.34) the year prior
	- Non-GAAP EPS above the midpoint of guidance provided in
	January

• Non-GAAPEPS down 13% Q/Q

$(0.34) $(0.36)

FY24 Q3 Drivers

• Gross margin impacted by shift in mix from I&E to EV, partially offset by incremental contribution from Mohawk Valley
• FY24 Q3 includes $14.4M of factory start-up costs from JP construction and materials expansion efforts

$(0.53) $(0.55)

$(0.62)

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1) All figures represent results from continuing operations, 2) FY23 Q3 gross margin does not reflect change in accounting presentation made in August 2023

FY24 Q3 FINANCIAL PERFORMANCE - ADJ. EBITDA1

Key Takeaways

Quarterly Non-GAAP Adjusted EBITDA

FY23 Q3

FY24 Q3

• FY24 Q3 Adjusted EBITDA down 6% year over year, driven by a significant step-up in underutilization costs at Mohawk Valley and start-up costs at the JP

•	Targeting positive Adjusted EBITDA exiting FY25
	$(31)M	$(32)M
•	Current U.S. capacity expansion plans targeted to drive

>40% Adjusted EBITDA margins

Non-GAAP Adjusted EBITDA YTD

9 Months Ended FY23 Q3	9 Months Ended FY24 Q3

$(56)M

	$(88)M
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1) All figures represent results from continuing operations