Great. Welcome back, everyone. I'm Joe Moore from Morgan Stanley Semiconductor team. Very happy to have Neill Reynolds and Tyler Gronbeck, CFO and IR respectively from Wolfspeed. Just quick safe harbor. For important disclosures, please see the Morgan Stanley Research Disclosure website at morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. Welcome, guys. I think most people probably know you up to a point, but maybe just a couple minute intro into the silicon carbide market and Wolfspeed's enablement of that market.
Yeah. The silicon carbide market, I mean, what we're seeing right now is a pretty dramatic change, historic change in high power semiconductors, and it's really driven by the advent of electric vehicles, the adoption of electric vehicles, where silicon carbide plays a really important role in terms of that efficiency. This is something we've been doing for a long time, over 30 years, but now it's really finding its home in driving efficiency in electric vehicles.
What that's doing is it's providing a volume basis and capability here over time that'll drive a lot of efficiency, a lot of volume, eventually bring costs down and really proliferate that technology, you know, across the power semiconductor landscape, including areas then outside of electric vehicles as well, which actually make up about, you know, 30% of our sales pipeline on top of electric vehicles. Just a huge opportunity here. We play in both the materials, so the crystal growth of actually growing silicon carbide crystals, but we're very much focused on the, you know, the bleeding-edge technology at 200mm for the device as well. That's really the role that we play.
We're kind of in the heartbeat of that drivetrain of the electric vehicle, and that's really opening up a lot of different applications.
Great. Yeah, maybe we'll talk a little bit about the market size and then talk a little bit about your role.
Yeah.
A s sort of a dual supplier of supplies.
Yeah.
A nd devices. In terms of the market, you know, it's very clear that this is an accelerating trend that everyone's moving to get more EVs to market, more battery-powered vehicles to market. It's also still kind of a gold rush feeling from a device standpoint. T here's so much activity, and you know, we can add just the top five device manufacturers, including yourselves, we get to $3 billion this year.
Yeah.
Which is kind of a heady number. You know, can you talk to how you get comfortable within that kind of gold rush type of market that you're shipping to in demand? You guys have talked about this being potentially sold out for another six or seven years. You know, how do you think about that?
Well, I think it's one of these cases, Joe, where, and Tyler maybe you can comment to the market size, you know, as well, where all boats kind of rise with the tide. I think what we're seeing is this adoption rate in electric vehicles is happening so quickly, and we're starting to see this just state over time in terms of what these ramps are gonna look like, that it creates a tremendous opportunity. When you look at the sales pipeline, that we've generated, I think we started out at $9 billion or something.
Yeah.
W hen we started measuring this three or four years ago.
Sure.
It's now well over $40 billion. That's not just on what we compete on. That's what we compete with other people on. In that same timeframe, we've done over, you know, $16 billion of design-ins. As you said, right now we are supply constrained, yeah, both in the short term and even as we look out into the long term, and we see that across the industry. If you look over time, you know, the market's gonna grow at a roughly a 40% CAGR. We see that potentially out to 2027, and even out to the end of the decade where, you know, today it's a much smaller market, but we could see it being $18 billion or $20 billion over, you know, as you get to the end of the decade at a higher adoption rate of vehicles.
I think, you know, to build on what Neill just said, you know, we're at this inflection point, and Joe, you know this 'cause you've been covering us for a little bit now. You know, we've talked about capability and scale, and we're on the verge of kind of turning that on. We said on our last call, we're at an inflection point as we bring on the world's first 200mm device fab. Last September, we announced we're gonna build the world's largest, you know, materials factory in Siler City, North Carolina. For where we sit, it's what Neill just said. It's this opportunity pipeline that's rapidly growing. At the same time, we're trying to scale capacity to meet market demand, it's still very early stage.
Yep.
I mean, it's kind of unique to me, you know, I haven't covered you guys for that long, but I've covered automotive semiconductors for a long time in various forms. You know, it'll take sometimes several years to qualify.
Mm-hmm.
A $2 analog part.
Mm-hmm.
Now you're in this position where every automaker is rushing to market on the highest valued component of the car, relatively quickly, and I think there's a certain amount of uncertainty about the whole supply chain, you know? You know, have you guys? Does it seem like to you that the pace is as frenetic as maybe it seems to us? You know, do you think there's a risk of, you know, that we're double ordering along the way as people look at, "Hey, I'm uncertain about these supply chains?"
Yeah, I don't see, I don't see the. I mean, there's obviously the, always the potential that people are double ordering because you're supply constrained, okay? That's pretty normal in semiconductors. What I don't see, though, is if you look over time, if you look at the automotive customers, for most companies, this is, you know, somewhat of a life or death situation. They're taking their R&D budgets for internal combustion engines, and they're really targeting that towards electric vehicles. There really isn't something else they can go to, 'cause they're gonna take their platforms, they're gonna change them over and move them over to electric vehicles and not really have something else to sell for the most part as you get out in time.
That's what I think is really driving, at the end of the day, the freneticism, as you call it, Joe.
Mm-hmm.
It is because they really need to know they need to be successful on a number of vectors in a very new supply chain that's coming online. I remember sitting here last year with you, and I think the takeaway was this industry needs capable supply over time, and I don't think that's changed at all. Investment and supply is what's going to be needed, 'cause you're dealing with the largest, you know, automotive customers in the world who are gonna wanna transition from their internal combustion engine vehicles over to electric vehicles, where silicon carbide plays, a, you know, an important role. Now, silicon carbide is a difficult thing to bring online.
The way that we're attacking that is by going to the, as you know, to, from 150mm wafers to 200mm wafers, we can bring more supply. That's 70% more surface area for everything we deliver, at a 40% lower cost. It really solves two market issues in a very short amount of time by bringing more supply to the market, but also driving some cost efficiencies over time as you start to think about bringing on more and more volume. Yes, I think if you look at the OEMs, the Tier 1, as they're all managing through this transition, I think capable supply, steady supply is something that's gonna be needed.
That's obviously why we're, you know, investing heavily in this area to bring on that type of capability, and we feel that's gonna be needed across the industry.
Joe, if I could just add on. You know, I think going through the pandemic and the stock out that we saw on silicon products, I think is what's driving a little bit of this pace of play by OEMs and Tier 1 to where assurance of supply is really one of the primary drivers of conversations when we talk to customers. You've probably, you know, many of the people here in the room know about the deal that we did with BorgWarner, which provided a capacity corridor of up to $650 million annually in devices. We've struck a partnership with ZF, and there have been other things along the way. I would say that, you know, we're coming out of this period where, you know, automotive manufacturers weren't able to make cars.
I think now where we sit is, as they look at silicon carbide as a critical element of the drivetrain, they just wanna be able to have assurance that they're gonna be able to make the cars that they plan to do.
Great. I wonder if you could talk a little bit up to the content per vehicle that you guys see, and I'll follow up. I know Tesla raised some questions about this last week.
Mm-hmm.
I'll give you a chance to respond to that. Can you talk, you know, before we get to that, just what do you kind of see as the general content for the traction inverter and other silicon carbide?
Our TAM model, you know, as I said earlier, gets us to about $18 billion-$20 billion of market size for silicon carbide devices out in that kinda 2030 timeframe. That's at about a 40%, you know, EV adoption rate. What we look at is about $300-$500 or $600 per vehicle in terms of silicon carbide content opportunity, that's in there, as you look over time. That's basically what we use to kinda come up with what that market size is. When you dig into that a little further, I think the interesting point is that, when you break down that, you know, the market per vehicle, you know, 85%-90% of that is in the drivetrain.
It's in the module and in the inverter, and that's really important because that's really where silicon carbide plays the biggest role in the more high power part of the engine. We're really focused on the area that's, you know, that high, the highest part of the content, you know, also being the area where silicon carbide drives most of the efficiency.
You know, coming to the Tesla comment from last week, they talked about a reduction.
Yeah.
Of 75%. I think they were talking about on future vehicles, not every vehicle.
Yep.
Maybe you could just talk to that and you know, I don't know if you wanna go too specific into any one customer, but do you see that content changing over time as people become more budget conscious and bring these into, to lower priced vehicles?
Well, clearly people are very focused on the drivetrain and they made some comments last week, and there's a lot of speculation around that. You know, people are speculating that, you know, we could be talking about a very kind of low cost, a low power vehicle at maybe a 400 voltage, 400 V architecture. What that means for us is that it probably strengthens our TAM, and I'll explain, you know, why in a second.
The reason for that is when you talk about that $18 billion-$20 billion I mentioned, if you look out in time at a 40% EV adoption rate, if you double-click on that and look at what that, you know, bifurcation of that market is, we assume that about 60%-65% of that market is silicon carbide EVs, and the rest, the other 35%-40%, would be silicon-based. What that means is if you're talking about the very low-end power part of the market, which you could say is that, you know, is silicon carbide gonna be used at really low power because it's known for really great efficiency at the higher power, we're probably expanding the TAM for the silicon carbide penetration part of that. It probably strengthens the TAM over time.
When we work with our customers, excuse me, when we work with our customers, we are generally seeing from our point of view, is really a transition and to a more either multiple power but an 800V architecture. The reason we can only use silicon carbide, and the reason for that is you get the benefits of silicon carbide at the higher voltage levels. Regardless of where people go, if this is the way that, you know, this starts to head or whatever it might be, regardless of what that is, it's probably good for silicon carbide because there's gonna be more of it.
Brings us back to we probably need more supply, the industry needs more supply, and we need to, you know, really support what this transition to electric vehicles is gonna look like.
Okay. Great. You know, you talked about the content in the car. Can you talk about the content sort of beyond the car when you think about charging infrastructure and things like that? Also your guys' capability to serve that market with, in areas like GaN and other technologies.
Yeah. Let me get started. Maybe Tyler, you've got a couple of comments. You know, I started off with this. You know, what's really interesting is, you know, silicon carbide's been around for quite a long time. You know, we've kind of pioneered this technology over many, many years. But it had to find its home from a high power perspective when volumes for electric vehicles came online. What that's done though now with these higher volumes is it's created an opportunity to create a lot of volume, and that volume will obviously take down cost as you start to expand this capability. As you look at this over time, that's now opened up a number of opportunities for different platforms and different applications that you can use outside of electric vehicles, which have been terrific.
Maybe Tyler, you wanna talk to?
Yeah.
What some of those might be?
Yeah. I mean, as Joe points out, you know, the charging infrastructure, you know, in a vehicle it's $300-$600 worth of content. In a supercharger that charges an electric vehicle, it's about $1,000 of silicon carbide content. You know, charging infrastructure is gonna be an important part of our strategy as we go forward. As Neill points out, what's happened, automotive has driven the cost down of devices, and what that's done is it.
What it's done is open the aperture for industrial and energy for things like vertical takeoff and landing vehicles, train and traction, e-mobility. We're, you know, we're seeing things like concepts like green taxiing, where they wanna take existing aircraft fleet and convert it into a hybrid structure for battery-operated taxiing to and from the gate. We see as the cost comes down on devices, the opportunity across a wide spectrum of sectors is really an opportunity for us too.
Great. You know, in terms of customer announcements on the device side, you know, you guys have spoken to General Motors and Jaguar Land Rover.
Mm-hmm.
On the OEM side, you've talked about Tier 1 relationships with BorgWarner and ZF. You know, I guess it's hard for us to analyze from the outside what that market share looks like.
Yep.
When you talk about it by customer. How do you think about those wins? How exclusive are they? You know, obviously, there are customers that aren't announcing wins, like, you know, how much of this is, you know, you pushing people to make announcements versus you people, you know, not necessarily wanting those announcements? Just how do you guys think about that?
Well, I'll let Tyler talk to it. He deals with this, you know, almost every day. Clearly we're working with a number of large OEMs, Tier 1s, as you mentioned. We've been working with General Motors for several years, we've announced that. Great partnership with Jaguar Land Rover, and most recently Mercedes, who we've talked about as well, not to mention some of the Tier 1s. We work with these, you know, various customers on announcements when it makes sense for them. At the end of the day, you know, we're really a supplier to them working on trying to solve solutions. Where it makes sense, we'll, you know, we'll obviously engage with them in terms of what those partnerships look like.
Yeah. I think, you know, we're a newer entrant into the market and, you know, we're just a pure silicon carbide play. You know, for us, we are opportunistic and try to announce whenever we can, but we also know that, you know, there's some element of, you know, customers are not comfortable maybe making a pronouncement with us, and we're okay with that. I would say this, you know, we've had over $16 billion of design-ins over the last four years. You should think about 60%-70% of that is in the automotive space, and what that probably tells you, we're probably punching above our weight a little bit.
Yeah.
In terms of automotive. We feel, you know, even though we'd love to be able to disclose more, we're very happy with kind of how we're trending in automotive.
In terms of those customer wins, you know, how do you think about the capabilities that you guys have? You know, I think from our perspective, you're so clearly the strongest provider of supplies o f wafers.
Yeah.
That, you know, the vertical integration is a very powerful message. You know, if we talk to your competitors, one of whom's gonna be down the hall in 20 minutes, you know, they'll talk about.
Yeah.
The capabilities they have within modules, the fact that they're already in the silicon IGBT market, they've done all the automotive certifications and things like that.
Yeah.
The customers seem to care about both of those things. How would you assess your capabilities at this time? You mentioned.
Yeah.
Sort of seeing yourselves as a new entrant. you know, how are you going about building out those capabilities?
I think customers look at a lot of things when they look at a new opportunity. I think some of the things you mentioned are valid, by the way, Joe, and certainly when we look at our rivals in the sector, there's, you know, very good, you know, very good companies out there who have been working in automotive for quite a long time. When you look at us, you know, you're looking at a, you know, a technology that's ramping for the first time for something that's very, very difficult to do, starting with the substrates. I think that we have very, very deep domain kinda expertise in those areas.
When you look at the device side, you don't need to look at the, I don't think there's any real question as it relates to us regarding the, you know, materials capability and the substrate and crystal growth capability. The question comes back to devices. You know, we've been a fully integrated device manufacturer for more than 10 years, all the way going from crystal growth all the way through module, and we've been doing this for a long time. In fact, we came out with the first silicon carbide MOSFET back in 2012. I think maybe one other company, I think it was ROHM, and maybe right around that same time period.
Same time.
Not only do we have deep domain expertise in the crystal growth and the material side, but I would also argue, you know, very deep and capable domain expertise in the device side as well. I think our devices are highly capable and always score very, very highly from a performance perspective when they're tested by, when they're tested by customers. We feel very good about our technology capability from crystal growth to MOSFET chips, and even through modules where we've been also engaged for more than 10 years. We've had this and I think we were the first fully integrated, you know, supplier, you know, in the industry all the way from crystal growth through the module.
I think when customers look at us now, the question is not so much around technology capability, I think we always score pretty high there, the question is scaling it.
Yes.
Bringing this to market at scale. What we've done there is a couple of different things. One is we've brought in a lot of people who have capability around.
Mm-hmm.
Automotive semiconductors who are working with us. You know, our Head of Quality, you know, Lisa Fritz, she's got, you know, many years of experience in automotive quality at another company. When they see her at the, you know, at the table, they feel very confident in it. The second thing is that we're bringing on more capacity than anyone in the industry. You know, we've just gone through a silicon supply shortage for a long period of time, and we're going to grab the largest silicon carbide manufacturing footprint in the world, and we're gonna do that at the bleeding edge technology at 200mm. When a lot of people talk about being able to deliver and being able to invest, we're actually doing it.
They can go to Mohawk Valley, they can see a new fab. They can see we're starting wafers at 200mm and bringing that to market and bringing on capacity in a big way to be able to support them as we get out into the second half of this decade. I think those are the pros and cons, and I think when they look at us having deep domain expertise and really a significant amount of capacity at the bleeding edge technology, that's what they're really looking at when they're looking at us.
Hey, Joe, one more point on this. I think the way that we look at the industry, we're still so early stage in silicon carbide. We know that some of you might say competitors, we look at them as rivals, right? We wanna continue to see everyone win in the marketplace with silicon carbide. As Neill pointed out, you know, we're a supplier to our rivals on the wafer side, and then we're competing for, you know, a device business. As we sit here today, we kinda know that there's not enough capacity coming online. That's why we've talked about the investment, you know, of over $6.5 billion over the next four years to build out capability.
For those of you that have looked at our Investor Day, that only gets us to about $5 billion of revenue on a TAM that we think is about $18 billion-$20 billion. I think, Joe, there is a lot of business to go around, but there's also a lot of capacity that still needs to come online.
Absolutely.
You mentioned Mohawk Valley. I think maybe you could talk about that a little. You know, you're going from a sub-margin facility in Durham.
Right.
S ort of built for LEDs, migrating to the world's only 200mm silicon carbide facility. You know, how is that going? Can you just give us an update on how you're ramping that fab? You know, can you talk about how that impacts your economics over time?
Sure. First of all, the transition from 150mm, kind of legacy to technology, over to 200mm is a big shift. This is something we've been working on for a number of years, and it's something where, you know, the team is really excited about to be at this point. And where we're at is, we're bringing up a couple of things right now. One is we're bringing the Mohawk Valley Fab online. The data coming out of the Fab for the testing we've done looks very good. At the same time, we're also bringing up 200mm crystal growth in volume. Now, we've tested this over a number of years. We've built many 200mm wafers.
We've run them through our pilot line that we had running up in Upstate New York for a number of years. We have really good, you know, confidence in the technology that we're bringing up. The next step for us, is to now start to bring this to fruition, start to bring this volume on, bring this capacity on at volume. That's really the next step of what we're working on right now. The way I tell people is we're, you know, the Durham fab you mentioned, from a device perspective, that does about $400 million of revenue per year. It's probably capped right now at about $100 million a quarter. What we need to do now is transition over to Mohawk Valley.
We should see maybe single-digit millions of revenue as we get to the June quarter here. That all looks good. It's gonna be a question between now and the end of the calendar year, that first kind of tranche of millions of dollars of capacity for a $2 billion facility, you know, there could be a little bit of bumpiness as you start to bring all of this together at the same time. I do anticipate that could happen between now and, you know, the rest of the calendar year. I think as we start to bring the utilization up in the fab, we get more cycles of learning, and we get more cycles of practice at bringing up this capacity, we'll see that come on in a big way.
That's, you know, people ask about revenue growth and margin. I think I said on the last call, you know, all roads lead to Mohawk Valley, and I think that's really the question. I think we'll start to see a ramp-up for Mohawk Valley. We'll get the cost benefits of the 200mm substrate. We'll also see a big spike up in revenue as we start to see it come online. We'll see how it plays out here as we start to bring up the, you know, the initial lots of utilization.
Can you talk about gross margins and maturity in that facility?
Yeah. As you look over time, you know, obviously our target model is between 50%-54%. We'll obviously be using that for maybe, you know, the Mohawk Valley facility for our most advanced technology with our, you know, our biggest customers over time. I would anticipate that there's a big differential in not just cost, but yield and cycle times and whatnot as you get into the facility. You could see the, you know, the margins coming out, you know, north of 50% for sure in line with our target model over time as you start to think about that. I think that's worthy of maybe stepping back and really thinking about that for a second. Mohawk Valley cost us about $2 billion to build.
We got $500 million back in our deal with the State of New York, so about one and a half billion dollars net. This is a facility that will generate $2 billion annually in revenue with north of 50% gross margin and about a 60% cash fall through. The economics on it, you know, are really terrific, and I think it really plays a role for us in a number of ways. One, it creates a really high quality capable factory to serve automotive customers. From an investor perspective, it creates this really wonderful cash generation vehicle that'll really serve us for many, many years.
The 200mm aspect of it, you know, could you characterize the margin improvement just from that? 'Cause some people have talked about, you know, some of your competitors said 200mm wafers can be quite a bit more expensive 'cause they have to be thicker and things like that. Like, you know, obviously you're doing it because you see a cost advantage in doing so.
Oh, there's no question. We can just talk about basic semiconductor math. A 150mm wafer going to 200mm, that is good. Okay. Let's just make that simple statement right there. Now, over time, it'll take volume to get cost out of the substrate. That's just natural. The first substrates will cost more than the ones when we have a lot more volume. I do anticipate over time, we'll get the cost per centimeter squared on an equivalent basis over time. The unique advantage we have is that we'll be putting it into a fab. The way that you get benefit from going from 150 mm to 200mm is driving the benefit through the fab.
You get 70% more surface area for every mask level that you run through the fab, and that's the benefit that we're going to see regardless of the substrate cost being a little bit higher early on in the plant. That's all baked into our assumptions, that early on it'll be a little bit more costly. Of course, we'll get the benefit of running that internally, not paying a markup for it, and then getting the benefit as you run that run those substrates through the fab.
Okay, great. Last one more question, and then I'll open it up for the audience. You've talked about addition of two new facilities in North Carolina and Germany. Can you just talk through You know, what that means for your numbers over time and how, you know, sort of what it means for your scale down the road?
Yeah, you know, it's. We talked about it earlier, you know, we're building the largest, you know, silicon carbide manufacturing footprint in the world, and we're gonna do that at the new kind of 200mm bleeding edge, you know, technology. We're gonna do that in a couple of ways. Tyler talked about a $5 billion fab device footprint. That's what we're building. The Mohawk Valley fab could do, you know, a little over $2 billion or so of revenue at maturity.
The fab that we announced recently in Saarland can do, you know, is about 25% bigger than that, so think about $2 billion-$2.5 billion, maybe a bit north of that, and we still have the Durham fab doing, you know, $400 million. There's a lot of capacity to bring on over time to get to roughly a $5 billion device opportunity by 2030. In addition to that, and just as importantly, is the substrate capacity that needs to come on to support that. Mohawk Valley, you know, we think about it, the Durham facility can generate substrates maybe, you know, probably around half or less than half of that fab. Additional capacity is needed.
You have to double that, you know, the manufacturing footprint for crystal growth and substrates over that period. If you have another fab after that, you need to be able to double it again, except that fab's bigger, so it's more than double again. We're building out the JP, named after our late co-founder, John Palmour, in Siler City, North Carolina. It'll have the ability to scale to serve these multiple fabs and even fabs beyond that. It's really important for us to have all of these pieces coming together to achieve a full kind of integrated supply chain for silicon carbide as you get out into the, you know, in the second half of the decade.
Great. Let me pause there and see if we have questions from the audience.
Yeah. Two questions. The one would be on the device side, the design of the device, so planar versus trench. Can you elaborate a little bit where you stand and how important that is in order to win business? The second one, I mean, you're building a lot of capacities, others are building a lot of capacities. You're talking about $18 billion TAM. What is the risk in the industry to overbuild in terms of capacities?
On the first one, on planar versus trench, and then on to the capacity a little bit. On the. When you think about silicon carbide, it's following a similar path from silicon in that perspective, where everyone has a roadmap. What customers really care about is what I talked about before. It's they look at a myriad of different things. They look at the device cost and price, they look at the performance, they look at your ability to supply it. Whether it's, you know, a certain type of design isn't so much important as it is what is the performance and the price that goes into that, you know, that particular application, as well as your ability to serve that supply.
I think it's really a mosaic of things that come together as it relates to what customers think about, as you look out over time. From a capacity perspective, and maybe, Tyler, you've got some comments on this as well, what we see right now is a supply-demand disconnect, and we anticipate seeing this out to the end of the decade. Our view isn't so much, and my concern when I wake up in the morning isn't about, is there oversupply in the market? It's quite the opposite. Is there enough supply in the market? If you look at the amount of capacity that we're putting in place over time, you know, we really like to see that across the rest of the industry, to see more capacity come on.
Tyler talked about some of our, you know, some of the other folks being more rivals than competitors, and I think it's very early in the stage of growing this industry to really be talking about that because it's gonna take all of us to bring this, you know, capability online and supply it over time.
Yeah. I think where we sit today and you look at the practical application outside of automotive, you know, that is definitely gonna drive a lot of demand. We had a OEM executive tell us a short while ago, you know, "We're gonna claw our way to 30% penetration on EVs, right? At 30%, the cost of the internal combustion engine car goes up because of the fixed cost on things like mufflers and spark plugs." His cautionary tale to us was, at 30%, it flips and be careful because penetration rates on EVs are gonna run a lot quicker than what it took us to get to 30%.
As we sit today and kind of look at some of the industry estimates, and we also have great line of sight because we work with some incredible Tier 1 partners that have insights to all the models coming to market. This is where I think Neill and I come back to. There's, you know, the supply and demand mismatch is gonna go for the next several years.
Maybe we could just wrap up on the supplies side of the business, you know.
Sure.
You've mentioned over time that all of your customers have plans to bring up some of their own substrate capacity.
Mm-hmm.
On the other hand, you know, you've had the renewal at STMicroelectronics. You had a recent renewal, which, you know, we think is ROHM. I don't know that you said that, but.
With ROHM, yeah, we did confirm that was ROHM.
Okay. You know, people are still renewing, people are still coming to you for supplies.
Yeah.
How do you think, you know, the strategy of being vertically integrated and selling supplies to people that are your rivals, can you talk about that?
Yeah. I think that this is important. We talk about being supply-demand disconnected for a long period of time, probably for out to the end of the decade. There's two things to consider here. One is the 150mm kind of business that we're selling wafers on. Think about it as kind of the legacy 150mm technology. You know, we know a lot of people are going to try and insource that. We're a major supplier in the industry, and that's okay. We need the capacity in the industry.
If one of our, you know, one of the companies that we work with, you know, make a, make a roadmap that says they need to do 'X' percentage internal, they need to buy X% from us, we'll work with them on a long-term agreement to help supply that. We'll go and try and support the industry in terms of bringing this technology to fruition. In the meantime, then, we'll spend most, you know, our time really driving the 200mm bleeding-edge capability and, you know, continuing to focus on that, build our device capability and build that out, that capability over time. I don't think of it so much as a threat, Joe.
I think it's more about, you know, bringing this technology and advancing these to market and advancing it in such a way where it creates, you know, stable supply for the industry.
Great. Neill and Tyler, thank you so much for your time.
Thank you.
Thank you.