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Technology Stocks : Wolf speed

WOLF 17.20

-0.8%

Nov 21 9:30 AM EST

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To: 993racer who wrote (4464)	12/6/2000 12:33:32 AM
From: slacker711	Read Replies (2) of 10713

Cree has developed a process and commited part of their valuable production capacity (which is otherwise in backlog) to Moissanite production. I think if I look at it the other way it does provide some more insight into the agreement. If moissanite sales had absolutely skyrocketed, C3 would have had a secure pipeline for their supply. This would have slowed down the production of SiC devices by at least 3-6 months (the time it would have taken for Cree to build more crystal growth machines). OTOH....since moissanite sales didnt live up to expectations, this gave Cree the perfect situation. Cree is able to devote as many resources as they need to their SiC production. If crystal growth is NOT the choke point (isnt it epitaxy?) then they are able to devote any excess crystal capacity to CTHR which had to accept the product. Hmmm....still thinking this through. One thing I havent been able to come up with is a rationale for CTHR selling the crystal growth machines for $5m in moissanite. They already had nearly 3 years worth of inventory....and they desparately needed cash. Moissanite wont pay for advertising....or for salaries. Slacker

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