Cree says revenue up in quarter as Marcy work continues

Posted

Cree Inc., the company building a semiconductor fabrication facility expected to eventually employ more than 600 people in Marcy, reported a 5% increase in revenue in its just concluded quarter over the previous period.

The company on Wednesday said revenue was down 11% in the first quarter of fiscal 2021 compared to the first quarter of 2020, before the COVID-19 pandemic took hold.

Company executives said construction of its fabrication facility in Marcy near SUNY Polytechnic Institute remains on schedule, with ramp-up of production still expected in 2022. The company has begun hiring and has previously said it expects to employ more than 600 people there by 2029 to make silicon carbide semiconductor devices for industrial, automotive, power control and communications applications. Chief Financial Officer Neill Reynolds told financial analysts that global demand is soft mainly because of the COVID-19 pandemic, according to a transcript by the investment website The Motley Fool.

Wolfspeed, the division involving Marcy, had quarterly revenue of $116 million.

Reynolds said the company’s capital investment plan will peak in fiscal 2021, and said the Mohawk Valley fab facility, along with a facility in North Carolina, will allow Cree to scale up.

Some of its financial results will depend on the timing of reimbursement from New York state, which has pledged a half-billion dollars in various forms of incentives, along with local aid, including improving an access road and electrical connection and tax abatements at the town, school, fire district and county level.

Chief Executive Officer Gregg Lowe said the company got some $700 million in design business for the Wolfspeed line, up from $600 million in the previous quarter, and, with a new distribution affiliate company at work, new opportunities have been found in 43 countries for one particular line. Meanwhile, Lowe added, auto makers are increasing plans for electric vehicles using Cree’s power line of business as European governments seek to reduce emissions.

Production in Marcy is expected to ramp up in 2022 but not be a substantial part of production volume until 2024 as automotive customers come online, Lowe added.

“We are seeing a tremendous traction in automotive, which represents approximately half of our device pipeline. We are encouraged by the continued regulatory momentum for electric vehicles. More than 20 countries have plans to begin phasing out sales of new gasoline-powered vehicles over the next two decades,” Lowe said.

The company announced recently it has a deal to sell its LED business, on which it was founded by North Carolina State University researchers.

For the period that ended Sept. 27, the company reported a quarterly loss, as it expected as it invests in production capacity. The net loss under standard accounting rules attributed to controlling stock in the first quarter was $184 million, or $1.68 per diluted share, versus $37.8 million or 35 cents per diluted share, for the corresponding quarter a year earlier.

Comments

No comments on this story | Please log in to comment by clicking here
Please log in or register to add your comment