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To: unclewest who wrote (1968)	2/10/2000 9:07:00 AM
From: Matrix_Man	Read Replies (1) \| Respond to of 10713

i believe if you add up all of the $$$ spent by GE, westinghouse, nichia, siemens and everyone else who have "failed" to develop/produce a high quality SiC crystal, you will find that so far the switching costs for them have been impossibly high. Uncle, when you get right down to it, this is the real reason for my investment in them. They have accomplished something that a number of deep pocket companies couldn't do with all their money. That tells me one thing: these are some smart guys, from the technology side of things. But, that is a necessary but not sufficient cause for investment dollars. It becomes sufficient when they display business savvy. In 1999, they did so. The timing of the earnings report, the SPO and release of hard news items is nothing short of superb, in my book. I don't yet fully understand all the nuances of gg, but I like it so far. In my opinion, the above combination will have an excellent chance of producing a gorilla, or at least the highest form of royalty.

To: unclewest who wrote (1968)	2/10/2000 10:52:00 AM
From: wildhart	Respond to of 10713

Uncle West, I totally agree that no other competitor has been able to manufacture Sic with near the efficiency of Cree and therefore is unable to compete with Cree at a pricepoint of delivery, yet I would not construe this as creating "high switching costs" as I understand how the term is used in the GG. It is my understanding that high switching costs are generated when an intrinsic architectural design necessary to utilize the Gorilla's product is embedded into the systems of the end user of the product.Thus, a competitors product, even when sold at a lower price, would create switching costs unacceptable expensive to the end user. That wouldn't seem to be the case here. It is Cree's costs of production which are lower than the its competitors that enable Cree to sell its led at lower prices than competitors. One could even argue at this time that Cree has no viable competitor in the arena of high bright blue leds. Nonetheless, there is nothing, it seems to me, that creates high switching costs to the end user if such a competitor should emerge. Moore likes to play his GG in the arena of application or enabling software where the costs of production is equal between competitors such that software design of one companies precludes it competitor's product from being effectively integrated into the end users products because of incompatibilities. I do not think that would present with leds. So, it would seem to me that Cree is more of king in a world where there are no princes. Wildhart

To: unclewest who wrote (1968)	2/10/2000 11:38:00 AM
From: mauser96	Respond to of 10713

Unclewest, all gorillas are born in a tornado (but not all tornados give rise to a gorilla) At this point in time it does not appear that sales increases for Cree are sufficient to call it a tornado. Thus Cree isn't a gorilla at this point in time. It's a potential gorilla. IMHO, it's best shot at being a gorilla comes later when SiC can be used as a complete semiconductor rather than just a substrate as is the case in LED. In the case of LED any gorilla status would be based on one corner of the market (Blue and white) and I think is entirely dependent on Cree being able to make a product that is so much cheaper than competitors products that it will have a huge CAP and GAP. Considering what I'm able to learn about the advantages of SiC as the LED substrate, this may be possible. Cree may also develop or purchase (they have the cash) superior technology in the GaN semiconductor technology. That would widen the lead further.

To: unclewest who wrote (1968)	2/10/2000 5:14:00 PM
From: John Walliker	Read Replies (2) \| Respond to of 10713

Mike, At this point I do not see Cree as a Gorilla. It seems to lack the proprietary technology with high switching costs. i have a different view.... Switching costs for blue LEDs and lasers may not be huge. However, when SiC is designed into high voltage switchgear and high-power microwave transistors it will be possible to dispense with expensive cooling systems. Any return to conventional technology would then require a total re-engineering of such systems, greatly increasing their size back to current dimensions (space which will by then have been used for other things) and hence giving rise to substantial switching costs. John