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To: LindyBill who wrote (14672)	1/9/2000 4:12:00 AM
From: garyx	Read Replies (3) \| Respond to of 54805

With all due respect to the venerable LindyBill, I'd like to ask how exactly are 50 labs in Taiwan going to pump out high purity Silicon Carbide when companies like GE, Westinghouse, and Siemens have all tried and failed? There are other companies that produce SiC, but with much less capacity and in much smaller dimensions. Cree has a functional monopoly on the production of high purity SiC in terms of "only we know how to do it" and possibly a de jure monopoly if their production techniques, which are patented, turn out to be the only/best/cheapest way to do it. If Cree is six years ahead of the SiC competition -- a number which has been thrown out by management (does anyone know if this is true?) -- then I'd take six years of monopoly in an exploding industry. This is what one report had to say about Silicon Carbide: Silicon Carbide (SiC) has certain characteristics which make it a very desirable material for use in electronic components. It has a "wide bandgap", it's a very good semiconducting material, it conducts heat very rapidly, and melts at around 2300 degree's C. SiC can be glowing red hot and is still operate as a semiconductor, in fact SiC can be used as a semiconductor at temperatures approaching 700 degrees C. It's been observed that the uses for SiC in electronics is nearly limitless. Now, this is pretty impressive as it is. But with Silicon Carbide being a more heat-resistant compound than Silicon -- and with Silicon chips running into heat-related problems which is forecast to halt their string of constant doublings of speed -- won't the ENTIRE computer industry have to look around for the next Silicon? Correct me if I'm wrong (I don't think I need to add this of course). Am I mixing up something here? What if Cree is the next Silicon? By the way, I just saw the movie "Being John Malkovich" which is fantastic, and had to sit thru a few commercials. One of them was for the fake diamond "Maissonite" -- which Cree manufactures. It seems like someone is ramping up publicity on this thing. Oh, and another thing regarding Cree's production capacity and ability to execute: "Cree has only in the last year and a half turned into a production company. In that year and a half Cree has come to provide more Blue, and Green LED'S to the world market than any other company." LED's are also the product with the LOWEST profit margin that CREE will ever produce -- all the other ones in the pipeline have much higher profit margins. Am hoping for a healthy debate here. GaryX

To: LindyBill who wrote (14672)	1/9/2000 5:50:00 AM
From: unclewest	Read Replies (3) \| Respond to 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)