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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: FLSTF97 who wrote (14794)	1/10/2000 8:41:00 AM
From: Robert Jacobs	Respond to of 54805

Regarding LED's replacing incandescent bulbs, the barrier to entry for SiC LED's will be the same as any SiC device: right now next to impossible as it involves getting around IP patents and the demonstrated difficulty of making large quantities of SiC chips which is the basis for an SiC LED. That leaves only the question of other substrates and so far sapphire is the only other contender and a weak one at that. Because of sapphire's non-conductivity, electrodes need to be placed on the top surface resulting in a non standard and larger package along with only half the yield from a wafer (the chip itself must be of a certain size to handle the side by side top mounting as opposed to the vertical connections of an SiC device. This results in a sapphire unit ASP that is around $.65 as opposed to the $.30-.35 per unit ASP for SiC. You also need to take into account the fact that cree has no competitors here (Uniroyal says they're going to compete but haven't as of yet...same with Emcore...while sapphire has numerous players such as HP, Nichia, Toyoda who by the way are all in a lawsuit with Nichia on the low brite LED's. The barrier to entry for cree's potential competitors is a defining competitive advantage..when it's SiC is applied to mass markets such as incandesncent bulbs, they will probably not invite competitors but will invite licensees for their technology and production process.