Cree’s Wolfspeed segment grew revenue 30 percent year-over-year during the second quarter of fiscal 2018, to $70.6 million, which reflected strong demand for the company’s SiC devices for electric vehicles. The better-than-expected revenue was limited by production capacity, as Cree’s capital investment to double Wolfspeed’s capacity won’t be fully online until the end of calendar 2018.
Wolfspeed’s gross profit for the quarter was $34.1 million, a gross margin of 48.4 percent and a year-over-year increase of 0.6 point in gross margin.
Cree’s new CEO Gregg Lowe, who joined the company on September 27, 2017 and served as CEO of Freescale before it was acquired by NXP, is reviewing Cree’s businesses. During the earnings call on 23 January, Lowe said that the strategic review will determine “which areas gives us the best opportunities for growth in both revenue and profitability.” He indicated the assessment is almost complete and will likely be announced during the current quarter.
During the call, Lowe shared his initial impressions of Cree’s businesses. He said Wolfspeed has strong technology — SiC and GaN — to support the demand for electric vehicles (EV) and 5G infrastructure. Listen to his comments:
Gregg Lowe, Cree CEO
During the Q&A portion of the earnings call, Harsh Kumar, a financial analyst with Piper Jaffrey, asked about Wolfspeed’s participation in 5G. Lowe responded that Wolfspeed is a “top player in supplying those chips [GaN] to customers.” He said GaN outperforms LDMOS in the frequency bands targeted for 5G, i.e., 3.3 to 6 GHz. Listen to his exchange with Harsh Kumar:
Harsh Kumar, Piper Jaffrey, and Gregg Lowe, Cree CEO