Good morning, everyone. This is CJ Muse with Evercore ISI. Very pleased to be hosting Wolfspeed as part of our AutoTech & AI Forum, co-hosted with our Automotive Team. We're honored to have Wolfspeed CTO, Elif Balkas, with us today. She's been with the company for nearly two decades, and earlier this year took over the CTO reins following on her instrumental role as Vice President of Wolfspeed's Material and R&D business. Welcome, Elif. Great to have you here.
Thank you, CJ. Thank you, everyone, and welcome, everyone. It's actually very exciting for me to be with you. Greetings from Spain. I'm here for a conference. We will be talking tomorrow about the Silicon Carbide for future, sustainable future for the energy efficiency. We'll talk about, I think, technology today. Hi, everyone.
Perfect. Thank you. There's a chat box, so if anyone in the audience would like me to pose a question for you, please do so. I guess I'll kickstart things with, you know, maybe probably the biggest question coming from earnings report a few weeks back would be, you know, what did you mean by more methodical approach to the substrate capacity build over the next kind of into the next year versus what you kind of thought about, you know, six months ago? Can you kind of walk through what has changed, you know, since that October Analyst Day?
In terms of our approach to the technology ramp and the process ramp, nothing really has changed compared to six months ago. We're gonna apply the same principles. For us that if you think about the, our existing facility, we have this for us relatively big building on the one side of the road that what we call as like the combined building 158, that cluster, that actually produces the majority of the Silicon Carbide volume globally. What we are trying to expand that step-by-step. There is that across the road that what we call the building 10 by number, that we're kind of we converted to crystal growth facility.
There's the first step for us, and then the bigger ramp is under the works that is the John Palmour facility out in the Siler City. Compared to six months ago, really that, we've kind of like the had, some, you know, the, challenges with the supply of the some of the components, into the building. Specifically, yes, the, you know, the all the permits or all the Infrastructure, it, it took time. There was a bottleneck in terms of the critical component that we didn't wanna take the risk and jeopardize the safety and the performance of the reactors. From there on that, the last quarter we already started the ramp-up activities. That problem is behind us already.
We're kind of like the hitting the same, you know, the ramp. When, when if I, if I talk about the method of where, you know, the ramping is so for us that is specifically for 200 mm. For us, the 200 mm technology is new. The fundamentals are nothing different, but the diameter and the process and the dimensions and then the reactor is new. We've been exercising those technologies in building one five eight, like existing, you know, the cluster. The way we take the new facility is that nothing different than the new process and technology introduction. We take it step-by-step, so that actually forms this very, you know, the IATF approved it methodology.
Take step-by-step that qualify the one reactor at a time. Actually that before we did that, taking the first reactor qualify the whole building in terms of the all of the facilities, dialing in the power and the water and all the cooling elements of the process. After that it's basically that, you know, the reactor run, see the result, gain the confidence, and then go step-by-step. Yeah, compared to last time that we had the delays, that unexpected external influence delays. In our ramp rate is it hasn't changed really that from our initial plan.
I think one of the worries is that maybe it's a technology driven, you know, aspect.
Mm.
It sounds like that's not the case. Maybe it's a bit of conservatism. Is that fair? Or is there kind of something else that's changed?
Right. In terms of the crystal growth process ramp, you're right, CJ, that we like to approach it conservatively. That part hasn't changed. We're not gonna change, we're not gonna push the, to, you know, to catch up that timeline to, you know, to accelerate the qualification. Because if we did that from past experience that we know that if things go wrong, by the time we figure things out, there's a risk of creation of like too much, you know, the waste material and too much, you know, the issues down the line. With every step that we check for the quality, we check for the yield.
Actually the good news, I'm happy to report actually that we are actually maybe getting to the quarter or so of the first phase of the building and getting results, and getting really good quality and yield results from the building. It's just gonna be the matter of time from here on, taking those careful steps.
Perfect. And thinking out as you scale out capacity, you know, how do you think about, you know, what obstacles that you've seen in the past, you know?
Mm-hmm
T hat you might need to deal with in the future, and how are you kind of preparing for that?
Yeah. When we look at it from the technology, and I think I've talked about this in the past that a lot of the folks that heard me saying that about the difficulty of the technology. If we can actually re-emphasize that, if we imagine that the temperature aspect of it's 2,500 degrees, and then the probabilities of actually 200 and more different polytypes, possibility to form. At those temperature levels, reactor-to-reactor repeatability at a precision that you wanna always produce the same quality, the same polytype that we care for, the power electronics, that creates actually the biggest, you know, challenge, also the risk. That actually requires us to go into every, you know, step, calculate it, and then check, then check.
One of the things that we're very careful that, yes, the external dependence on the reactor components or the building components, those happen, and then we tackle them as they arise. Some of the things that, like in the case that got us delayed with the Building 10 that we didn't know, and then we didn't get informed until it happened, and it was a very minor component which created a big, actually, the delays for us. Those are, I see them, you know, they're not technology problems, they are timing problems, but that created, you know, enough headache for us.
But at the same time, what we're actually more careful is as we ramp, actually, that how are, you know, the seed quality is progressing, or how are, you know, the process stability is, you know, progressing as we add the volume. Those are more of the, you know, the critical areas that we on the technology side that we look after, and then we're trying to be careful. It's not gonna end. I think, you know, the, you hear Greg probably talk about that too, of we will be in this ramp mode for the next, you know, the way we look at the materials itself, like, a good five years, and then the supplying the fabs and the supplying, you know, the continuous supply, the external as needed.
That's not gonna change. We will be going through the issues and fine-tune the technologies, fine-tune the, you know, the processes to adapt to the changes.
You're gonna be a very busy woman indeed.
Yeah. Yes. Keeps us busy.
Yeah. As we think about the Siler City ramp, which will require to take Mohawk, you know, above the 20%-25% utilization level, how are you now envisioning the current cadence under this methodical approach?
Mm-hmm
W ill the slower Building 10 ramp enable a more accelerated Siler City ramp?
Mm-hmm
O r are there kind of obstacles that the company will have to overcome given the new location and, you know, required support infrastructure, build of the fab?
Right. Right. Great questions and great, you know, the concerns that we talk about it actually on a daily basis internally, both with the, you know, our facilities teams, operations teams, and then with the R&D and technologies presence, CJ, that I kind of actually call it like we had a lucky scenario that having this Building 10 instead of going, this existing building that we actually did develop the technology for more than 30, 35 years, and then going from there to going to 10X capacity in one step, instead that the Building 10 was so much learning opportunity for us. You know, at least from the learning of that, what could go wrong, you know, we've always focused on the technology to qualify and expand and ramp the technology.
It's actually that created more of a, you know, the documentation and then the understanding of the dealing with the external, dealing with the facilities. It's interesting actually that I also sort of joke internally that I'm learning also the facilities side of things as well, that the things like even the, you know, the permits that you need to adhere to, and then how long actually it could take time, especially when you talk about this, you know, the massive, that the first in the world, that type of a factory. The vicinity-wise, actually that we feel really good about the new factory location. It's really not that far, you know, for us, you know, in the RTP area, that is a very spread out area.
That is actually the folks are driving actually, anywhere, maybe that it's not uncommon for them to drive 40 miles or so to come into the commute to the work. This facility is about 40 miles, 50 miles from our Durham facility. It's far enough to take the, you know, the power from a different grid, and then far enough to, you know, to reduce some of the risk to have everything together. It's also close that our technologists can commute for a day, and they wouldn't mind actually going and checking things there, helping the processes to come together. It's a good actually situation that we have there.
Perfect.
Mm-hmm.
You spoke earlier about, you know, building a new 200 mm facility, obviously every kind of machine is new.
Mm-hmm
A nd needs to be enhanced. Maybe you can talk about the transition from 150 to 200. You know, a lot of competitors have been talking about adoption. Can you kind of walk us through, you know, what it, what has brought, you know, Wolfspeed to where it is today, in terms?
Mm-hmm
Of your 200 mm technological lead?
Right
A nd, you know, what are the focus areas of continued development, you know, that you're focused on, you know, to maintain your leadership, at that wafer size?
Mm-hmm. Mm-hmm. It's, it's for us is really the diameter expansion is a journey. you know, when we started material science and then materials, actually the Silicon Carbide activities at Wolfspeed prior to Cree, 30-plus years ago, we were at maybe less than two centimeter diameter. All we did, and I have actually that the curve and the history is fascinating that to go to the, you know, the less than an inch, and then the three-inch, and then four-inch, six-inch, and 200 mm. When I joined Cree at that time, we were just transitioning from three-inch to 100 mm, four-inch. It's fascinating. Yes, the diameters get bigger, challenges at the volume that the uniformity and the-
Mm-hmm
C ontrols, they get difficult. We've been accumulating the technology understanding. Every time is a learning opportunity for us. That doesn't change. What actually that gave us that, accumulate every diameter expansion, accumulate the knowledge from the previous to the next one, what goes wrong and what.
Mm
W hat to be mindful of. One of the biggest advantages for us that, yes, hindsight looking is actually the fun. In going through all those challenges, it's, there was a lot of, you know, just like what we're doing today. Get together, solve the problems, look for the better ways. That also allowed us to refine and improve our reactor capabilities. At the beginning of 200 millimeters program, we did another one that when it comes to the reactor that we evaluated and looked, you know, at the history, what are the things that we want to have in the reactor for far better performance? We put all those together for our reactor design.
That having that type of, you know, the control over and the understanding is very powerful for us. When you look at CJ Muse historically, that as we improve, as we expand the diameter, you also see the quality getting better. If you look at, for example, the micropipe densities, every time we introduce a new diameter, you actually see it introduce at a lower micropipe density. Actually, that the 200 millimeter was kind of like the, as the record that it was at the introduction for ourselves. At the demonstration, it was already really, you know, the wafer that you can actually take it to fab and get good quality out of it, good yield out of it. Then specific to 200 millimeter journey for us that it's still, I mean, it takes time.
Silicon Carbide is the learning cycles are, cycle times are long, and learning is slow. We demonstrated 200 mm back in 2015. Since then we focused on the seed quality, seed, you know, the inventory, reactor refinement, and then the process. It wasn't the, you know, the day effort. Within the last, I believe four years ago or so with Greg's leadership that we said, "Okay, that, let's run an evaluation, and then where we are, and then accelerate." Within the last three to four years with, you know, the increased effort that today we're here, and then we're looking at a really good quality and consistency.
Will we ever see 300 mm wafer for Silicon Carbide?
For us, you know, for us that, yes, of course, you know, doing the technology. We just need to, yes, technology-wise, why not? We don't see a limitation. We don't see a, hey, 200 mm hits the limit. It's something that I called it's the timing. You know, does it make sense? With 200 mm, we see a great, you know, the potential in terms of the fab benefit. That's the motivation, and it's the threshold, you know, the how much does it take to create the material and how much gain. There's still a lot of gain, obviously. We're gonna go through the same exercise for 300 mm and just, we'll evaluate. From technology perspective, why not? Yeah. It might be expensive, but yeah.
I'm Tyler Gronbach, VP of Investor Relations. I got stuck in the waiting room. I think for now, though, we're very focused on ramping 200.
Of course.
The priority right now is we've got to get capacity at building 10, producing more wafers to feed Mohawk Valley. Yeah, I think that as Elif kind of said, long term, there's opportunity probably to continue to innovate on Silicon Carbide, but immediately for us is the focus on getting those two facilities up to scale.
Mm-hmm.
Yeah, no, of course. I was just trying to, trying to ask a more provocative question-
Of course.
T hinking what's longer term?
You know, you will always.
I may have asked 450 mm.
Yeah.
If there's enough demand for EVs- ... you know, does that cause the industry to go there? I'll leave that for another day.
You will always get why not as an answer from me for that. Speaking technology, and of course that we need to be very mindful, like Tyler said, that we have a big task in front of us, all hands that we're focused on the ramp-up technologies, yeah.
Another technical question.
Mm-hmm.
The transition to longer boules, you know, has been a challenge over the last few quarters. Could you help us think through the quantification of the inherent benefits of the longer boules?
Mm-hmm.
At what point do you expect these benefits to begin showing up on your P&L, and what is driving, I guess, the company's confidence that this dynamic will not be a headwind?
Mm-hmm
In the 200 mm scale out?
Right, right. That so same idea applies there going from 150 to 200 mm that we kind of learning that we implement already in 200 mm as well. That problem that we faced was more with the 150 mm Diameter Crystals. It was, it had an, you know, the external dependence, not in the way of the, you know, the supply issue, but the back end of the processing, you know, the challenges. You know, there's always a, you know, the pros and cons that having in home, you know, the built equipment versus a, you know, the working with the external ready equipment. This was one of those, we had to go back and solve those issues, and so that's behind us.
Even at the time that we had, of course, the 200 mm in mind, we kind of solved the problem there. That's not to say, you know, CJ, I believe that we will have, you know, similar or different technical, not technology, problems. What we wanna do is actually that to be mindful of the timeline effect. We have such a strong technology team at Wolfspeed that is, I really, you know, they're relying on their, you know, the experience and the depth of knowledge that there are few things that the technical that we think we can't solve, maybe none, but the time is important.
For us, we wanna be, you know, to stay on our timelines, keep, you know, to maintain our ramp rate. For those, though, that I feel comfortable about you know, handling the taller crystals for 200 mm as well.
Perfect. Maybe a bigger picture question. As you think through your Silicon Carbide roadmap over the next, you know, call it 5-10 years.
Yeah
You know, what are you primarily focused on? What gets you excited? Where might there be, you know, innovations across materials, devices, packaging? You know, where do you think you can, you know, maybe increase Wolfspeed's competitive mode? Then as part of that, are there other solutions, you know, perhaps around just, you know, traditional silicon that, you know, keep you up at night as you think through kind of the moving dynamics, you know, in the coming decade?
Yeah, yeah. Yes, yes. These are very rich questions, and it might take me a while to, you know, to hit all of them. Specific to Silicon Carbide, I'm very excited, and the team I know they are very excited that for us that the, you know, the 10 years or more, actually that up to 20 years, there's a lot of, you know, the technological improvements that ahead of us, for 200 mm. Those improvements are about, you know, the delivering better products out to the market at the die level. Then that's looking at it from the crystal's perspective, whether that's, you know, the quality of the material and then cost of the material.
Then with our vertical integration at the, not only in the, you know, the supply perspective, but also looking at the technology as well, having that feedback and then creating, you know, the better learning loop, we already see, you know, the very clear roadmap ahead of us, within the next, you know, half to 1 decade, in terms of the quality and the cost of the products. When we look at the dies themselves that as you appreciate as well, there's so much to do, you know, that we will always go after the reducing the RDS on and then getting more amps out of the dies per design.
When we take it also that there's the advanced packaging and the modules, it's all about, you know, the unlocking the potential, true potential of Silicon Carbide. We have this, you know, the amazing material, really solid, reliable, device designs, and then to getting the best out of those designs through the module designs. Those are our on our roadmaps. Of course, it is we get more closer to the applications that we're also excited to work with our customers closely to understand their needs and their roadmaps and of course that the aligning to them, and then lift actually the altogether the Silicon Carbide application and the performance. There is that.
Coming back to the crystal growth of things, I see that we already have in our roadmap that really cool things that we are working on. Those will be implemented over the next decade, I will say. Specific to when you ask about the silicon that has been a very mature technology. I don't even talk about the material side of things with the device and the device packaging and then the manufacturing side of things, very mature. It hit the limits, right?
That we know like the, it's actually that the applications that we are talking about today for using the energy more efficiently, they are, we know that it's the past theoretical kind of like the calculations of the what silicon can deliver. Yes, the keeping me awake at night when I see a news on the, you know, the, if I read it in the evening, it gets me thinking, and that keeps me awake, but it's, I don't see it as a, I mean, I, it's not a concern.
I think, CJ, it's also important to go back to technologically on 200. You know, there was some confusion in the market a couple of weeks ago, you know. Were we trying to do something with the material on the boules height, the thickness of the wafer? No. The plan that Elif and the team had worked on is exactly what we're focused on. I think what she just kind of mentioned is, over time, there's innovation that can be done where we can probably maybe grow a taller 200-millimeter boules or thin the wafer, but that had nothing to do with, you know, the methodical approach to what you guys were talking about at the top of the call.
I think what you just heard from Elif speaks to the innovation that, you know, we've been through diameter changes, and there's a process that one has to follow as you introduce a new diameter size to the market.
Helpful. you touched on it briefly, and I, and I had it in my kind of prepared questions, I'll ask the question. A, a way to drive thinner, or greater, you know, number of wafers, you know, per boules if you think about kind of Cold Split at Infineon and Smart Cut at Soitec. You know, is there something that you're working on here that, you know, could help margins over the near, medium term that we should be cognizant of as investors?
Yes to your question, CJ, that at any given time that we have our own efforts as well as that we are on a constant, you know, the lookout, and then try and test what's available in the market. We're doing both things. We as a culture as well that we're fairly paranoid and then also very curious, so that drives actually a lot of those activities. When we talk about the margin, though, at the end of the day that we're very mindful of the fab performance in two categories. One is the how the fab line runs from the, you know, that we may introduce a materials change, and we may introduce a material saving so to say. What does it mean for the fab line?
This our number one consideration, because margin for us at the end of the day is like the how well the, you know, the wafer reaches the wafer line yield. Immediate, of course, the parallel consideration that the, on those wafers, how well the die is, the die yield, and the die performance. Those are our, of course, the top of our priority is that creating high quality and highly reliable products. The rest is of course this basically calculation and then the running the DOE and then doing that, you know, the experimentation within the reasons to get the visibility. Does something, you know, that is viable, does it bring something, you know, the cost beneficial when it comes to the margins?
Does it?
Our priority stays with the, yes, the of course the margins is our, you know, the top priority.
A question on the competitive landscape.
Yeah
Y ou know, Infineon's recently signed agreements with not Wolfspeed.
Mm-hmm.
there's internal ramps at others.
Mm
K ind of China. How are you thinking about, you know, your competitive positioning? Has anything changed in the last six months?
You know, I think that, few years back that when we started to, you know, to explain and when we became more of a semiconductor pure play, from my perspective I think we were pretty open in what we were about what we were seeing in the market, that you see today that the, a lot of the, the power electronics companies that they, announce and they try to create their own vertical integration, and then in a way to create, you know, the solutions to the materials availability. From that perspective it's nothing, you know, the surprising for us, so we kind of, you know, anticipate that and plan for it.
In China, obviously of course, the big, you know, the force, and they dedicate a lot of resources. What we think about it, you know, in terms of China, that China is itself is a huge market. From my experience, not necessarily, you know, buying Silicon Carbide wafers but, you know, other technology fields that the quality is been from my experience is questionable.
When we actually that as a part of my job is the conferences and the technical shows that, when I ask and get the feedback is the, today the Silicon Carbide field is the similar scenario that, maybe not necessarily a most fit type of quality, but then what the quality level is seen is it more of a smaller dies, maybe on the Schottky type of, you know, the dies that they're out. It's I think, you know, that it's normal that, you know, the unlocking the what Silicon Carbide can deliver. It's not a surprise. We're focused on the, you know, the what we can do with our technology. We consider that our technology is significantly ahead of the, you know, the competitive field.
we're focused on the executing, you know, the plan that based on our technology.
CJ, I think the way to another way to also think about this dimension is we're changing diameter sizes, right? Which gives us 1.7 times more space on the wafer to make die. That is naturally gonna give us a cost position that's about 30%-40% less on the device itself. If you're thinking, and if you think about China right now, they're making the transition from four-inch wafers to six-inch. What you're gonna be doing if you're using substrate, you know, out of China, you're gonna be chasing a cost curve on eight-inch.
You're gonna have to not only be able to, you know, just beat the basic economics that I talked about on the device cost, but you're gonna have to really get down to high quality, super high yields at a price point that is gonna be able to beat eight-inch, uh, device or devices off of an eight-inch wafer. That's where it's gonna be. We're paying lots of attention, as Elif said, out of what's happening in China. Just on the cost economics, it's gonna be interesting to watch, 'cause the legacy technology is 150, where the game is really gonna be played is on 200.
Mm-hmm.
Perfect. Last kind of two questions on the materials side. You know, it's a challenge making this stuff, and you guys are the leader. Things are a bit delayed. You had talked about it at the prior Analyst Day, you know, roughly $700 million material revenues by fiscal 2027, roughly doubling from today's level. Is that still an attainable target? You know, that's question one. Then two, considering the challenge, what impact does kind of this near-term, you know, issues have on actual overall supply of Silicon Carbide wafers? How might that kind of impact the ramp of EVs?
Let me maybe start, you know, giving my input, and then maybe Tyler that you can cap that. Our plan is that we're the largest supplier of the, in the 150 diameter level. How we're approaching to that is that we work with our, you know, the long-term customers through the agreements. So that gives us a good visibility and then the commitment to their needs. While we do that, we're committed to deliver to those, you know, the agreements. Our next ramp in building 10, we're ramping it as 200 mm. With the idea that the material that will be coming out of there that is going to support our Mohawk Valley fab.
In the meantime, we are actively working to build our The JP facility. Actually inside even the phase one, that will already satisfy the Mohawk Valley fab. That will also open up the opportunities for us to supply the market. At that time, we will see probably will continue to heavy on the 150 mm as the demand or, you know, as it makes sense. In time that we will also, you know, to evaluate the 200 mm capability, supplying external.
There will be, of course, there are second fab that's coming online that, so the JP by design is just keep improving and then, you know, the going into the second phase of the grover farm, and then keep supplying. It's going to be, you know, the step-by-step. What it means in terms of our plan numbers that, Tyler, please speak to those that I'm usually not, you know, our planners and supply chain teams will do that. Looking at it from our plans perspective, I think we have a pretty straightforward strategy for us.
Yeah. It, Elif did a nice job, CJ Muse, of kind of outlining the strategy. I think that the $700 million is, remains intact. The reality is this, is that the industry's supply constrained. There's really no place to go find wafers at the moment. I think you've kinda heard some of our rivals talk about this as a challenge over the next couple of years. I think what will happen for us is as we move more of our business, our device business to 200 mm, that will free up some 150 mm capacity that we can use to supply the market. That's why we have that, you know, that gradual increase. I think the other thing, you know, we are assuming everybody hits their plans for vertical integration, you know, builds their internal capability.
In the event that that does not happen, you know, you can use a 200 mm furnace to grow 150 mm crystals. There's some optionality for us that if people wanna sign a long-term agreement for wafers, we can be creative about how we might do that. I think that's something that we're just gonna have to watch very closely on how things evolve.
Perfect. maybe on the device side, you know, we've kind of hit at, you know, the challenges of ramping capacity. How is that impacting how you're thinking about the ramp of Mohawk Valley? you know, I think you guided 20% utilization exiting fiscal 2024. What are kind of the key milestones thereafter that we should be looking for?
The way we approach our fab that, we're focused on our existing, you know, the processes and then the products that we know that in terms of performance, they're we're getting really good feedback. It's basically ramping those products into the fab. When we did that, we have a good, you know, the comparison. Then of course the having the automated aspects of the fab as well as the more controlled, more state of the art equipment having there. It's more data rich, and it's we're actually that, having fun with that as well. The indications that we're getting there is actually that the, when we look at the yields, because the product and the quality is that we know and then we keep it constant.
Looking at the yield performance of the line that we feel pretty good about how the material behaves in terms of mechanically and then how the products come out actually from that fab. Looking at the fab steps and the process yields, that is looking really good. If I need to repeat again, it's more like how do we execute to our plan, ramp the building ten, and then supply material, bring the Mohawk Valley to 20% levels. There we will actually to start getting to the real benefit of that fab, that will actually deliver ample amount of products to the market.
From there, bridge it to The JP and then keep supplying to the fab. Things are from the technology and the yield and the product perspective, it's looking really good. Of course that, you know, we're working with our, you know, the customer base, there on the die side to the module side that, we're being very transparent with them. We're not, you know, as soon as we have the information that we communicate with them.
A lot of our, you know, the customers that, they are, you know, as long as that they are aware of it, they're being basically patient with us, understanding that it's a, you know, brand-new technology, incredible potential and a really great indications, but it's a matter of the time. Also to Tyler's point as well that, you know, part of the understanding is that, you know, we're doing it together, that is there isn't actually many alternatives to go and supply from there. As long as they see the quality and the reliability of the product, so they're actually being patient with us.
We see that this is going to be the case for the next, you know, the 10 years we will be in the ramp-up mode. That's exciting, this, because there's a lot of room, especially in the electric EV, BEV world, but then on top that, expanding the capabilities and potential into the industrial. That's going to continue. We're prepared for it.
CJ, the way to think about this is think Building 10 today has about half the crystal growers installed, and they're up and running, okay? Think about between now and our fiscal Q3, so the March quarter of next year, the rest of the crystal growers will be installed and activated. We've actually got ones that are built. We just haven't turned them on yet. The capacity for Building 10 is in place next March, which then gives you the opportunity in the June quarter, which is our fiscal Q4, to hit that run rate of 20% utilization. It takes about a quarter and a half to get to 20%. You know, you've got to, you know, ramp up.
For investors listening in today, that's kind of the timeline of the capacity turnup that brings you to 20%. Like Elif mentioned, the next phase of capacity that comes on is Siler City, which will have enough wafers to get, you know, Mohawk Valley to full utilization.
Very helpful. you know, maybe turning to device architecture, you know, we're hearing more about Silicon Carbide and IGBT combination solutions. Curious, you know, what are your thoughts on that, potential market, and are there any other sort of changes that you might see ahead that we should be aware of?
CJ, just to clarify on that, are you talking like a hybrid package where silicon and Silicon Carbide are in the same module, or are you talking about using it in like a hybrid strategy for dual inverters, one silicon, one Silicon Carbide?
I'd say the latter today and the former later on.
Right.
Go ahead, Elif.
Yes. The way I look at it, we're playing into, you know, with Silicon Carbide, when I say we, with Silicon Carbide the potential that we're talking about getting to the power levels at a greater efficiency, and then actually that at a, you know, the better thermal management capability. When you look at it from the systems perspective, getting to enough, you know, the power densities at a lighter, smaller system and then using your battery energy much more effectively. We know that. It's, you know, the by calculations, I think there's no discussion about that. When I think about a hybrid approach, as soon as you take away Silicon Carbide and then supplement it with silicon-based devices, you start reducing your performance.
Whether it's the, you know, the battery performance, then you need to have a larger battery, then it's the cost when you look at it from the, you know, the vehicle perspective, or from the power level that the performance reduction. Something has to give there. That's not necessarily, you know, I don't see it as a concern for us, that when I started to read about, you know, the those comments and then those news that, I see it, you know, the for, from the Silicon Carbide perspective, it's only, you know, the more opportunities, you know, the for the lower, you know, the performance, lower end of the, you know, the market.
Where we're actually focused initially is that none of our actually the customer base or the, you know, where we focus on the design-ins and the design-wins, they're all about the, you know, getting to the performance at the efficiency. So I don't usually, I don't today that I don't see it as a, as a, you know, concern. But then, you know, the cities like this, today I'm in Barcelona, that I think there is room for, you know, those type of, you know, lower performance, smaller, city cars. Or when you think about on the highway, some of the, you know, transportation vehicles maybe that you don't need, you know, that much of, you know, power.
How do you go about, you know, the cost of the battery and then cost of the, you know, the all that size? That's something that of course that needs to be seen and then evaluated.
Mm-hmm. Very helpful. Just to clarify on the performance, are you talking miles driven? Are you talking lifetime of the battery and battery degradation? Or is cost, you know, play a role in kind of how you think about the evolution here?
Right. I was more thinking about the size of the battery that you will need or the miles that you can range, you can get the range that you need to charge often. Of course, there is more, like, the wear and tear about the, as you charge. When I wasn't thinking about the lifetime of the batteries, but more so the size and the weight that brings. Actually when you look at the electric vehicle, the biggest cost actually is the, is about the battery, and then the battery management, that the heat and the conditioning, that the temperature conditioning of the battery.
There's a big cost there, that actually, that, of course, that's, you know, the automotive industries that the BOM type of, you know, the consideration. I was thinking about the size and the efficiency, efficient use of the battery energy.
Very helpful.
Mm-hmm.
We got 2 minutes left. You know, I figured I'd try to end on a, like, maybe a bigger picture question. You know, in the past, supply assurance has clearly been a major advantage for Wolfspeed, and I would think it still is, but obviously this is not easy stuff to make. You know, in your discussions with your customers, you know, can you kind of give us the rank order of why you think you are continuing to win on the device side?
I think from my perspective and from my interactions that our engagement at the technology level, and then having their trust on our, you know, our problem-solving capability, these are the customers that I'm talking that we actually engage with them in their actually what they need to, what they want to, you know, to create. But at the same time, you know, our confidence on our, you know, product, I believe, and actually it's, that's the fact that we have the most field hours product. We have reliable products, and they're most field tested. In relying on those, of course, that there is a certain level of confidence on the technology. As I mentioned earlier, being transparent with them, we're not about, you know, hiding.
I think everybody who deals and works with Silicon Carbide knows and understand the challenges. It's fascinating actually, those challenges. It's not crystal growth. Every level is very difficult. They actually, the whole, like, industry chain understands and appreciates that. There's that, you know, the good cadence in terms of the communication and exchanging the information. What our strategy and what I truly believe that being upfront and transparent with them, at the same time, you know, it's also our interest and also that our, you know, the motivation, to work with them, to look at the, when the technology problems comes, whether it's designing of the system, us, you know, the collaborating with them or taking feedback and then influencing our product roadmap. That's very much fun for everyone.A I think they see that. They see the benefit of that. Mm-hmm.
Perfect. Well, Elif Balkas, thank you so much for your time. Great to host you, and thank you for spending time with us.
Thank you so much. It was fun.
Thank you. Take care.