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To: unclewest who wrote (13319)	12/26/1999 9:48:00 AM
From: Mike Buckley	Read Replies (2) \| Respond to of 54805

unclewest, Is there a market to which which CREE can sell their crystals to be used in products made by other manufacturers? If so, is a value chain rallying around CREE's SiC? If there is no such market, is there a potential that it might form? What are the obstacles that must be overcome for that market to form? Who will remove those obstacles and when might that happen? --Mike Buckley

To: unclewest who wrote (13319)	12/27/1999 7:15:00 AM
From: Hanney Yin	Respond to of 54805

"Does CREE have some architecture that everybody must accept and build around? imo yes. silcon carbide. cree is the only company to demonstrate the ability to mass produce high quality SiC crystals. the process is of course covered by a broad patent portfolio." "In my experience, devices sooner or later can be copied". See www.lerc.nasa.gov/WWW/SiC/SiC.html, it indicates that "(Sic electronics in these specific applications are slowly becoming a reality (crossed chasm). SiC's immature crystal growth and device fabrication tech are being developed, but they are not yet sufficiently developed to the degree required for reliable system incorporation. Developing and maturing SiC tech to the point that it is ready for widespread system insertion (tonato)is the focus of increasingly intense research efforts at labs around the world..." Does it indicate that CREE might not have a mature and reliable architecture. What if there is a disruptive technology coming along? Since there is no mature archtecture, the switching cost will be low, and the value chain could shrink very fast. However, CREE's gross margin improvement from 1998's 15% to 1999's 35% is significant enough to alert me something positive has taken place in the company.