Message Font: Serif | Sans-Serif
 
No. of Recommendations: 33
Found these highlights in the latest 10K and thought to share it here for those who have not had a chance to read it yet:

In October 1999, Cree introduced a larger three-inch wafer to production for research purposes and demonstrated a four-inch prototype wafer. In October 1999, Cree released a low-cost two-inch wafer targeted as an alternative to sapphire substrates used by many researchers in the optoelectronics field. Beginning in fiscal 2001, Cree plans to begin shifting LED production from two-inch wafers to three-inch wafers. They state that they must first qualify their production processes on systems designed to accommodate the larger wafer size, and some of their existing production equipment must be refitted for the larger wafer size.

RF AND MICROWAVE TRANSISTORS Cree now has new product initiatives for RF and microwave transistors and recently began shipping limited quantities of these devices. They believe that these products may prove useful in a variety of applications, including power amplifiers for wireless infrastructure, home-based multi-channel multi-point subscriber units, digital broadcast applications and solid state radar. .......they are continuing development of additional RF and microwave devices for use in wireless infrastructure and other commercial and defense-related applications.

LED PRODUCTS Cree believe that LEDs made from SiC substrates offer important benefits over those made from the sapphire substrates presently used by their competition, including:
o an industry standard vertical chip structure requiring a single wire bond that permits faster LED assembly and reduced cost;
o a small chip size (Cree believes that the industry standard size of their chip affords their customers more flexibility in gaining design wins and that their smaller chip size enables their product to be offered for a lower cost per chip in comparison to sapphire-based products currently available.;
o improved resistance to electrostatic discharge, or ESD, which reduces the cost, engineering effort and time to qualify LEDs at customer production sites; and
o a lower-priced outdoor-capable product.

HIGH POWER, HIGH VOLTAGE OPERATION. Cree is developing SiC power diodes and switches that are able to operate at higher power densities than currently used semiconductor materials because of the much higher breakdown electric field of SiC. In addition, they believe that their SiC power devices will be able to operate with lower resistive losses and lower switching losses than those made with silicon or GaAs.

BLUE AND NEAR ULTRAVIOLET LASER DIODES Cree is continuing to focus on the development of blue and near ultraviolet laser diodes. SiC's inherent attributes, including its natural cleavability and high thermal conductivity, make it an excellent substrate material for development of such short wavelength laser diodes.

PATENTS At June 25, 2000 Cree owned or held exclusive rights licensed under a total of 70 issued U.S. patents, subject in some cases to nonexclusive license rights held by third parties. Included in the patent licenses we hold is an exclusive license granted by North Carolina State University, or N.C. State, to 10 U.S. patents, and to corresponding foreign patents and applications, that relate to SiC materials and device technology, including a process to grow single crystal SiC. Cree has been notified from time to time of assertions that their products or processes may be infringing patents or other intellectual property rights of others. They state that they have investigated such claims and determined the assertions were without merit or have taken steps to obtain a license or avoid the infringement.

Some risks that Cree wants us to look out for (I feel I would be misleading you if I did not include this):
WE FACE SIGNIFICANT CHALLENGES MANAGING OUR GROWTH.
THE MARKETS IN WHICH WE OPERATE ARE HIGHLY COMPETITIVE.
WE FACE CHALLENGES RELATING TO EXPANSION OF OUR PRODUCTION AND MANUFACTURING FACILITY.
OUR OPERATING RESULTS COULD BE ADVERSELY AFFECTED IF WE ENCOUNTER PROBLEMS TRANSITIONING LED PRODUCTION TO A LARGER WAFER SIZE.
OUR OPERATIONS COULD INFRINGE UPON THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS.
IF AN ADVERSE JUDGEMENT IS ENTERED IN THE PENDING PATENT LITIGATION, OUR BUSINESS MAY SUFFER.

This pretty much sums up the lawsuit involving Nichia:

Our distributor in Japan is currently a party to patent litigation in Japan, brought by Nichia, in which Nichia claims that our LED products infringe two Japanese patents it owns. The complaints in the proceedings seek injunctive relief that would prohibit our distributor from further sales of our LED products in Japan. A result adverse to the distributor in these cases would impair our ability to sell both our standard brightness and high brightness LED products in Japan. Subject to contractual limitations, we have an obligation to indemnify our distributor for certain patent infringement claims.

As for the new construction:

They state that during the 2nd Q of fiscal 2000 they completed a 42,00 sq. ft expansion of the current facility ( in case you are wondering, the current facility consists of a 139,000 sq. ft production facility along with an additional 33,000 sq. ft of office space). During Q3 of Fiscal 2000 they purchased a 120,000 sq. ft (near the current production facility) that they plan to use as administrative offices and an employee services center. In addition they are currently constructing a 250,000 sq. ft expansion of the main facility which will be used for increased production and future product lines. They are targeting primary phases of this project to be finished in fiscal 2001, with the balance targeted for completion in fiscal 2002.

For the serious investors and to check my accuracy I recommend reading the entire 10K Annual Report:

http://www.sec.gov/Archives/edgar/data/895419/0000895419-00-000012-0001.txt

I also found these highlights from the 14A just released recently to be of interest:

In April 2000, the Company purchased shares of common stock of World Theatre, Inc., a North Carolina corporation ("World Theatre"), for a purchase price of $5 million. The shares represent less than 10% of World Theatre's outstanding shares and were purchased in a private placement transaction in which World Theatre raised approximately $19 million.

The Board of Directors on July 31, 2000 adopted resolutions approving an amendment of the Company's Articles of Incorporation to increase the authorized shares of Common Stock from 60,000,000 shares to 100,000,000 shares ….. Currently Cree has 60,000,000 authorized shares with 35,443,306 issued and outstanding. The rest of the current outstanding shares are used for things such as employee stock options and acquisitions (such as Nitres).

Here is the link to the 14A (not as interesting reading as the 10K):

http://www.sec.gov/Archives/edgar/data/895419/0000895419-00-000015-0001.txt

Harvest (from the Yahoo board) consolidated some upcoming conferences we should keep our eyes and ears open for:

http://messages.yahoo.com/bbs?.mm=FN&action=m&board=4687828&tid=cree&sid=4687828&mid=34287

1) European conference on SiC in Nuremberg Germany just ended and we may get to hear of some technical accomplishments from Cree. Because the mater is highly technical this will not likely cause any bump up in price.

2) Bank of America conference Sept. 18th.Last year Cree got a very nice bump up in price from this conference.

3) Stephen conference on Oct 3rd.This is new to Cree and I believe the emphasis will be on power devices. This conference will also include Gilder who may at this time start coverage of Cree. If this happens Cree will get a real big bump up in price.

4) Earnings are released on the 12th of Oct. The anticipation and beating the estimates will bump up the price.

5) CC where Cree will strongly wax on all fronts energizing the shareholders. This will certainly give a strong bump up in price.

6) Shareholders meeting on the 31st of October. This will be one big love feast rivaling Woodstock.
The new administrative building and plant expansion will be most impressive and Hunter will show off many exciting displays, so that we all will want to double up on our holdings. This will give a nice bump up in price.

7) Prudential conference on the 1st of Nov. This is a well attended and will give a bump up in price.

8) AEA Financial conference on the 5th of Nov. This is the biggest conference that Cree participates in and one that Neil Hunter attends. Last year this gave Cree a very nice bump up in price and certainly should repeat as the Cree story only gets better.


9) Wit Soundview conference on the 13th of Nov.

10) 2000 Material Research Society (MRS) Again a highly technical conference and probably too much for Wall Street analysts, but not our nerds on this board. Cree may again release papers showing their superior accomplishments.

- Gavone



Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.