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To: FLSTF97 who wrote (17240)	2/5/2000 10:54:00 AM
From: Robert Jacobs	Read Replies (3) \| Respond to of 54805

FLSTF97 re Cree has provided some very valuable info and links. There is however an understandable error in the deductive conclusion obtained from the info as expressed by his statement "The situation is indeed confusing since CREE often competes with with some of it's customers" Cree actually does not compete with its customers. It allows some of the companies doing research to produce SiC wafers and look the other way as to potential patent infringement on that production. Cree owns the IP on certain production processes that allow Sic wafers to be produced in commercial grades and quantities. They will continue to look the other way as long as none of these companies or research labs have nil economic impact on Cree's business. At the AGM last November, John Palmour characterized the Sic wafer offerings of the other participants as "where we were 5 -6 years ago with our lead widening". Cree needs the co-operation of companies such as Grumman who have joint contracts with the Navy. They need researches to feel encouraged to produce research that can lead to products and markets for Cree's enabling technology solutions and production. So far, no one has been able to come close to producing commercial grades in quantity of SiC wafer or chips. They are watching Sterling closely though. Siemens has a license to produce SiC wafers from Cree...the prime reason being to satisfy car manufacturer's requirement to have more than one source. Cree's value chain is close to exploding now that there is a critical mass of companies and applications who have figured out how to use Cree's SiC enabling technology at an affordable cost. Don't forget it takes years to "design in" new technology and those design wins are showing up now (auto displays, cell phone lighting, traffic lights, consumer electronic lighting etc) These design wins will accelerate as other companies take the knowledge and apply it. (And it is also true that Cree has just gotten their production technology refined sufficiently and their products to a cost/performance point that allows companies to place orders which can be fulfilled). The new products (MESFETS, power transistors and blue laser) will take less time from enabling prototype to mass market product...but will each spawn a tornado). So the value chain for Cree's enabling technology is quite clear: Consumer "using" continuous technolgy (screen/handset display, light bulb, etc), manufacturer (car maker, cell phone maker, consumer electronics maker incorporating discontinuous innovation of SiC LED (lower power, smaller size, less power consumption, less cost) provided by SiC chip packager (Osram...etc) and then of course SiC supplier (Cree). Cree has an unparalleled competitive position in that they are the only company that can produce SiC wafers and chips in quanitity. The barrier to entry for commercial quantities of commercial quality SiC wafers has proven insurmountable to date (either from a technological or legal perspective) and the value chain is forming around a tornado of new products and markets. Sapphire is not a competitive threat due to its inherent properties which put it at a cost and size disadvantage to SiC. Cree's SiC production ramp will take care of that. The sapphire makers and Cree may all now all appear as equal gorilla condidates because for the next year or so they share a market but Cree will emerge as the gorilla due to the inherent limitations of sapphire. (Look at some of Cree's slide presentations which explain why sapphire is larger in size and cost...mostly due to the non conductive nature of Sapphire compared to SiC...and the non=standard packaging that results in greater cost...2x that of Cree's Sic...also when it comes to blue lasers, SiC creates a natural cleave plane...sapphire requires an eteched one which again presents a structural limitation) Cree is a gorilla in a market that is about ready to see a level 5 tornado touch down in a matter of months. think Intel in the early 70's with one important exception: Intel did not have either patent protection, defining technological superiority, defining head start or significant barriers to entry protection of the fabrication of the Si wafers themselves. Cree has that and it will serve to solidify and maintain it's CAP for a good long time!

To: FLSTF97 who wrote (17240)	2/5/2000 12:29:00 PM
From: mauser96	Read Replies (1) \| Respond to of 54805

The situation is indeed confusing ... It's a conundrum that corundum based LED compete with carborundum based LED... Meanwhile illigitimus non carborundum <<gg>>

To: FLSTF97 who wrote (17240)	2/5/2000 1:22:00 PM
From: Guy Gordon	Respond to of 54805

RE American Xtal Technology I notice that AXTI jumped from 15 to 40 this week. axt.com I've seen references to them announcing last year having grown their first SiC crystals, but there is nothing about it on the web site other than the comment buried in this news release: axt.com They also claim to be involved in the blue led market by supplying GaN and SiC substrates.

To: FLSTF97 who wrote (17240)	2/5/2000 5:49:00 PM
From: unclewest	Read Replies (1) \| Respond to of 54805

WOW!!! fatboy, prodigious effort on cree. thanks. it will take a while to get all the way through that. i will though. just a coupla quick comments in the interim. siemens has been licensed by cree for production. i do not know the details. i agree that japanese efforts bear close watching...as do all others. some feel sterling's efforts are further along than the japanese. cree officials have stated they are all about 6 years behind and the gap is widening. two very recent announcements have put me much at ease re. japanese efforts. both matsushita(panasonic et al) and sony have awarded new product design wins to cree in the last few weeks. the head of japanese company nichia's SiC research team resigned last month and moved to santa barbara, california. after all of that effort, it would be helpful to know if you have a position in cree or not. unclewest