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Disappointed in Cree
Board: Cree, Inc.

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By Imshaken
June 14, 2007

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I am disappointed with Cree, here's why.

For years Cree worked on developing a commercially viable blue laser diode. Who knows how much Cree invested in that effort? For years Swoboda repeatedly claimed Cree would be there with the device when the market was there. As James Allen's post regarding some 52 million laser diodes will be sold this year indicates, the market is here. If Cree could have had blue laser diodes, the revenue growth for Cree in this area would be enormous and immensely profitable. Also, importantly, it would indicate Cree is at the leading edge of GaN technology.

So where is Cree in GaN technology? Swoboda really hasn't been upfront about why Cree wasn't able to develop a blue laser diode. Was it a lack of talent, or the lack of funds? Ultimately, it must come down to lack of funds, because if Cree lacked talent, additional funds could have purchased the talent.

The bottom line is Cree couldn't compete with the big boys in the blue laser market which is very unfortunate. Will this be an event in history that will be repeated, perhaps in the power LED market at some future point?

I had been waiting to purchase both a new computer, and new TV. Last year Swoboda targeted that Cree would have won a design win for a commercially available TV. Rumors abounded that it would be Apple. How cool would that be?! I waited for both, or either. Neither would come to pass. Two days ago I went to load some new tunes into an IPOD so I could have them on a bike ride. My wife's computer took 20 minutes to load the program which is both ridiculous and shocking. Apparently this is fairly normal for her computer. No exaggeration. So yesterday, with no Cree LEDs backlighting any monitors in the marketplace I broke down and went out and bought her a new computer and monitor.

I'll give the TV till Christmas. After that I'll buy what I want. As much as I would prefer and enjoy having Cree lighting the display for me, I won't wait any longer than that.

On the lighting end of the world, with the purchase of Cotco, and after the development of XLamp, Cree is further entering the fixture end of the market. Since Cree has not acquired and maintained a lead in brightness in LED lighting, finding distribution channels for its products in what will become the largest LED market in the world is a very logical move.

I have somewhat higher hopes for the power switching and RF devices for Cree. Dr. Palmour still runs that end of the world and he's proven to be very competent.

Still, I wonder if Cree's relative small size coupled with the vicious competitiveness of the semiconductor marketplace will ultimately limit Cree's growth even in the power and RF markets. Thinking about it, Cree has purchased other startup companies that have developed better technology than Cree. Perhaps there's brain drain at Cree, or perhaps it's been bad luck, but I'm starting to wonder if Cree hasn't lost half a step somewhere along the way.

I look forward to feedback, and hopefully being shown I've overlooked or forgotten certain things.


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