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To: FLSTF97 who wrote (12582)	12/11/1999 11:57:00 AM
From: unclewest	Respond to of 54805

I think that there are right reasons to reduce the price, but it was not apparent to me they had it. Unclewest proposed that they dropped the price only on raw wafers and for a strategic reason. Now that is smart thinking, assuming he's correct. here is the original news release on the price cut. Cree Research Breaks $500 Price Barrier with New SiC Wafer Products 4H and 6H n-type, On-Axis, 2 Inch Wafers DURHAM, N.C., Oct. 7 /PRNewswire/ -- Cree Research, Inc. (Nasdaq: CREE - news), today introduced new, low cost 4H and 6H n-type, on axis, 2 inch silicon carbide (SiC) wafers for use in optoelectronic applications. These products will be offered at a sales price of $495 per wafer, making them an attractive alternative to sapphire substrates currently used by many researchers in the optoelectronics field. This significant price breakthrough is possible due to improved manufacturing efficiencies and higher production volumes that have dramatically lowered the cost structure. Chuck Swoboda, president and chief operating officer, stated, ``We've achieved a price point that Cree has been striving to meet which we anticipate will significantly open new application opportunities for SiC and expand the breadth of our product offerings. This is an impressive accomplishment that further extends our position as the leader in SiC products.' These new wafers have key advantages over competing substrate materials for gallium nitride-based optoelectronic devices including a single vertical structure for light emitting diodes (LEDs), and a closer match in lattice constant and thermal expansion coefficient, as well as a natural cleave plane for laser devices. Rob Glass, general manager of Cree's materials business unit, said, ``Our goal is to broaden our customer base with an affordable, low cost SiC wafer. This will enable scientists to conduct further optoelectronic research at a price point where they can adopt SiC as the material of choice for future applications. We expect these low cost wafers will create demand for SiC that was not possible at previous price levels.' North Carolina based Cree Research, Inc. is the world leader in developing and manufacturing semiconductor materials and electronic devices made from silicon carbide. The company uses proprietary technology to make enabling compound semiconductors such as blue and green LEDs, microwave transistors for use in wireless base stations and radar, SiC crystals used in the production of unique gemstones and SiC wafers that are sold for research. Cree has new product initiatives based on its expertise in SiC, including blue laser diodes for optical storage applications and high power devices for power conditioning and switching. For more information on Cree visit cree.com . This press release contains forward-looking statements that are subject to various risks and uncertainties, including potential lack of customer acceptance and uncertain demand for the new products, the possibility other substrate suppliers will compete on prices or introduce new competing products, and other factors discussed in our report on Form 10-K for the year ended June 27, 1999 filed with the Securities and Exchange Commission. Such factors could cause actual results could differ materially from the forward- looking statements.