Vertical Divider
Cree to Exit LED Business
Cree, one of the companies most closely associated with the development of high-brightness LEDs now widely used in solid-state lighting will exit the LED business.
The Durham, North Carolina, firm, which along with the likes of Nichia, Osram, and Lumileds was instrumental in pioneering photonics technology now ubiquitous in homes, streetlamps, and cars, has agreed to sell its “LED Products” division in a deal worth up to $300 million to SMART Global Holdings (SGH). Cree will focus on silicon carbide and gallium nitride materials and devices for applications in wireless communications and electric vehicles. SGH plans to retain the "Cree LED" brand, which has been associated with high-quality LED chips and products for more than two decades. With LED lighting now widely commoditized, profit margins in faster-growing areas targeted by Cree’s “Wolfspeed” division - notably 5G infrastructure - are much larger. The company’s most recent financial results clearly reflect that trend: for the 12 months ending June 28, 2020, Cree’s LED Products division posted sales of $433 million, compared with Wolfspeed’s $471 million, but the gross margin for the LED business was approximately half that of the Wolfspeed division.
In 2014, Cree’s annual sales attributed to the LED Products business unit peaked at $834 million. Since then those revenues have fallen steadily and profit margins have halved.
Cree, one of the companies most closely associated with the development of high-brightness LEDs now widely used in solid-state lighting will exit the LED business.
The Durham, North Carolina, firm, which along with the likes of Nichia, Osram, and Lumileds was instrumental in pioneering photonics technology now ubiquitous in homes, streetlamps, and cars, has agreed to sell its “LED Products” division in a deal worth up to $300 million to SMART Global Holdings (SGH). Cree will focus on silicon carbide and gallium nitride materials and devices for applications in wireless communications and electric vehicles. SGH plans to retain the "Cree LED" brand, which has been associated with high-quality LED chips and products for more than two decades. With LED lighting now widely commoditized, profit margins in faster-growing areas targeted by Cree’s “Wolfspeed” division - notably 5G infrastructure - are much larger. The company’s most recent financial results clearly reflect that trend: for the 12 months ending June 28, 2020, Cree’s LED Products division posted sales of $433 million, compared with Wolfspeed’s $471 million, but the gross margin for the LED business was approximately half that of the Wolfspeed division.
In 2014, Cree’s annual sales attributed to the LED Products business unit peaked at $834 million. Since then those revenues have fallen steadily and profit margins have halved.
|
Contact Us
|
Barry Young
|