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To: pompsander who wrote (1791)	2/4/2000 4:53:00 AM
From: unclewest	Respond to of 10713

pomp, i believe the shiny pebble metaphor may be replaced by something with a little more hair. unclewest CREE....B of A report details... highlights and paraphrased. while reading this, to appreciate the enormous growth opportunity, keep in mind that CREE's current sales are less than $100 million per year. cree is the world's leading provider of blue LEDs. booming demand for blue and green LEDs cree dominates worldwide SiC production 90+ % marketshare 61 patents cree is a unique competitor in all its target market because it controls production end to end cree addresses a market opp we see in excess of $10 billion cree's white light conversion product win into nokia's 8850 handset portends an awesome market opp. the total available market to cree is nothing short of awesome. we estimate the total world market (TAM) for all LEDs is currently over $2 billion. this does nothing to take into consideration the implications of the blue green and white light revolution underway, nor the explosive growth in wireless handsets and PDAs. a typical cell phone can use up to 10 or LEDs for LCD and keypad lighting. the nokia win uses 16 cree LEDs per handset. next several years cree?s LED TAM increases by $2.5 billion the market opp for rf transistors is $8 billion by 2003. we can add to this rf opportunities, laser opportunities, and general white light opportunities that add $billions more to the mix. cree is addressing a market opportunity greater than $10 billion. because of the awesome magnitude of cree's earnings generating potential in its target markets and its stellar record of execution, we have initiated coverage with a strong buy and price target of $200. we believe the company could easily exceed $2 in earnings in 2001. cree's SiC is nothing short of revolutionary current uses include wireless handsets, auto instrumentation, LCD backlighting, indicator lamps, full-color indoor and outdoor displays, other lighting applications, gemstone products, laser diodes, microwave power amplifiers, power devices, wireless base station, radar system, other commercial and military applications. the companies new product initiatives based on SiC marketing opportunities we measure to be in the tens of billions of dollars. competing technologies have significant limitations CREE's SiC overcome other compound semi-conductor shortcomings blue and white light conversion are the key driver for 2000. most common apps: auto instrument panel, indoor and outdoor display, traffic lights, under counter case lighting, indicator lights on PCs, printers and other equip. advantages: longer life, lower replacement and maintenance cost, lower energy consumption, smaller space requirements. a groundswell of demand is mushrooming for cree's high brightness blue and white light conversion LEDs. cree's product portfolio will diversify rapidly in coming years. we believe cree's substrate improvements are driving SiC device development improvements, strengthening the economic advantages of SiC in target applications and distancing CREE as the world's overwhelmingly dominant supplier of SiC. CREE's end to end manufacturing approach is unparalleled. not even intel holds as much end to end control over the production of its microprocessors as CREE does in the production of its devices. cree's competitive advantage across all product lines is obtained through a highly advanced technology chain that is rich in IP property. the competitive threats to cree are modest. nichia and toyoda gosei produce higher brightness products but charge a premium. CREE has made significant progress in the brightness of its products and its market share leadership position attests that its price to performance value has hit the sweet spot of the market. other competition includes agilent and emcore/uniroyal. both have been plagued by quality and performance shortcomings. they do have strong partners..phillips and GE.