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

To: Mike Buckley who wrote (17625)	2/10/2000 4:12:00 AM
From: LindyBill	Read Replies (1) \| Respond to of 54805

Damn, this is exciting! Yeah, but we really ought to get some sleep! :0) Mike, I have felt that Gemstar had a way to go to really be in the Tornado, and your analysis confirmed that to me. But, I bought some anyway last week. I have been out of the loop all day. ( been ordering all the utilities for my Penthouse. Damn, I can't get cable internet, have to go IDSN) In your opinion, Did the report play positive or negative on the news and to the street. As you well know, we had a good report out of Q last month, and got creamed anyway. any WAG on how this one will play?

To: Mike Buckley who wrote (17625)	2/10/2000 8:50:00 AM
From: Robert Jacobs	Read Replies (2) \| Respond to of 54805

Lucas and Mike: First Lucas: Thanks for pointing out that I had neglected adding SiC to my statement "There is no other company producing commercial grade LEDs...whould have been "There is no other company producing commercial grade SiC LEDs" As to Mikes question for Gorilla status: Q: Are there high switching costs? A: Yes...for SiC packagers when the limited manufacturing capability which will be eased in the next year or so. Since SiC leds are 1/2 the cost, 1/2 the size of sapphire and use a standard LED package, the industry will standardize and form a value chain around SiC in lieu of sapphire. At that point, Cree will be a gorilla in an earnings tornado. To dislodge the gorilla at that point will require either a new technology or another process that can make SiC wafers, epitaxil coatings and chips without violating Cree's IP. In my opinion, the game is over albeit a little earlier than we are accustomed. The other LED mfgrs that use sapphire for blue (not red...a commoidity) are chimps to become monkeys. Beware UTCI...a seductive trap. Will be ok until Cree's manufacturing can handle their customers...

To: Mike Buckley who wrote (17625)	2/10/2000 9:13:00 AM
From: 100cfm	Read Replies (1) \| Respond to of 54805

Mike thanks for getting involved it cleared up alot of things for me also. One question I have for you when you wake up. Are you buying cree now or still watching for the tornado. 100

To: Mike Buckley who wrote (17625)	2/10/2000 9:45:00 AM
From: DownSouth	Respond to of 54805

Well done, Merlin and Fatboy. Well done, indeed. Thank you.

To: Mike Buckley who wrote (17625)	2/10/2000 10:26:00 AM
From: FLSTF97	Read Replies (1) \| Respond to of 54805

CREE Value Chain May I expound on this point a little? Q: Has the value chain formed? A: Probably not. It appears to be coming together in the product of blue LEDs more than other products. When is a value chain formation complete? Probably never, but at some point you reach dimensioning growth rates in that chain as you saturate the applications. I think we can say that CREE's value chain is forming and growing. In addition to the users of the LEDs one should also include the various universities and government agencies not to mention other purchasers of substrates like Nitres and ABB and Charles and Covad (even if it is a non semiconductor app. they do constitute 10% of the revenue). I'm not sure how to value elements of the value chain that ultimately could be competitors, but I know I'd rather be the one controlling their raw material costs if I compete with them in the device arena. The value of the gov. is not so much product revenue, but rather their help in launching products and developing technology. They are willing not only to fund the R&D partially but also will buy the product while it is still at a high price point due to low volume. The universities help train the talent that CREE needs to grow (okay the competitors benefit too, but if you are the biggest it shouldn't be hard to select and pay for the best and brightest.) They also legitimize the technology. Every little bit of the value chain helps. FATBOY

To: Mike Buckley who wrote (17625)	2/10/2000 4:10:00 PM
From: freeus	Respond to of 54805

Thank you Mike! I understood! Hip hip hooray! Freeus

To: Mike Buckley who wrote (17625)	2/10/2000 6:52:00 PM
From: Eric Jacobson	Read Replies (1) \| Respond to of 54805

Re: Cree Q: What's going to eliminate that constraint? A: Increased manufacturing capability. Q: Why will manufacturing capability increase? A: Factories are being built. Licensing the manufacturing technology may add more capacity. Mike, if I understand correctly, there is one other factor that may relieve manufacturing capacity constraints: they are transitioning from 2" wafers to 3" and possibly 4" wafers. According to the company's website: Theoretically, 3 inch SiC wafers can more than double the number of chips per wafer over existing 2 inch technology. This is expected to significantly reduce the cost of devices made from SiC and has the potential to enable the company to increase volume to meet the high demand for its products.