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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: LindyBill who wrote (14672)1/9/2000 5:50:00 AM
From: unclewest  Read Replies (3) of 54805
 
I just took a fast look at CREE, because of the posts. My first reaction is:

1) It's a Fab House

2) Just at 2 Billion Market Cap

3) Any time a Fab House gets this kind of margin on an item, you can bet your sweet ass that 50 guys in Taiwan are ramping up to compete with them. And they laugh at patients on a commodity like this.

How ironic and/or serendipitous that your current description of CREE fits QCOM like a glove, a year ago.

It is important to understand that CREE has the only known method to produce large volumes of high quality SiC patented. It may be more important to understand that CREE has patents on the SiC based products too.
CREE is paid research fees by others to develop products. CREE then patents the products. sweet deal!
CREE concentrates their efforts at development and production on the most profitable products. Smart!

If the 50 guys in Taiwan succeed where Westinghouse, Siemens, and GE have failed, they can then buy licenses and pay royalties to CREE for the rights to produce the high demand, high profit SiC based products/devices that CREE has patented. That should increase CREE's margins.

I believe we will see some significant partnerships and/or licensing arrangements this year.
unclewest

In the words of a famous thread spokesman...."your turn!"
:o)

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