Charles & Colvard (NASDAQ: CTHR ) announced this week that it has entered into an amended agreement with Cree (NASDAQ: CREE ) to acquire new silicon carbide raw material used in the manufacture of its moissanite gemstones.
Silicon carbide, or SiC, is the second-hardest substance known to exist behind diamonds and is more durable than sapphires, rubies, or emeralds.
Charles & Colvard CEO Randy N. McCullough said in a prepared statement that "growth in sales, expansion into consumer-direct initiatives and accelerated demand for a number of our most popular moissanite gemstones has resulted in the need to acquire new moissanite raw material."
The amended agreement with Cree provides for the production of new silicon carbide raw material to be delivered quarterly until July 2015. Charles & Colvard 's total purchase commitment under the amendment is expected to be between $7.6 million and $18.6 million, including an initial new order of at least $4 million.
Silicon carbide is primarily used in the fabrication of high-performance semiconductor devices. Cree uses silicon carbide technology to manufacture LED lights that deliver twice the lumens-per-dollar of other LEDs while Charles & Colvard cuts it into gemstones. It then enhances them with a patented process that improves brightness and whiteness by up to four color grades through an exclusive partnership with Serenity Technologies. Charles & Colvard calls its moissanite gems "The Most Brilliant Jewel In The World."