Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Wolf speed -- Ignore unavailable to you. Want to Upgrade?

To: unclewest who wrote (5261)	4/3/2001 9:30:07 PM
From: r.edwards	Read Replies (1) \| Respond to of 10714

NEW DainRauscher Institutional CREE REPORT, 7days old, Dated 3-23-01 .Strong Buy-Speculative Objective: Growth Price Target: $38 Advanced Semiconductors 52-Week Range: $91-$15 Year End: June Fiscal Yr. EPS P/E 2000A $0.43 34.7x 2001E $0.68 21.9x 2002E $0.62 24.1x ROE: 10.2% Book Value: $6.50 Est. 3-Year EPS: 30% Shares Outs.: 75.2 million Market Cap.: $1.12 billion James H. Moeller (612) 313-1216 jmoeller@dainrauscher.com Harold J. Mellen, III (612) 313-1293 jmellen@dainrauscher.com March 23, 2001 Cree, Inc. Nasdaq: CREE Investment Highlights ¨> World Leader In Silicon Carbide Technology: Cree, Inc. is the world leader in Silicon Carbide (SiC) technology, and has a significant intellectual property position in the use of this novel semiconducting material. ¨> Silicon Carbide Makes Great Power Amplifiers: SiC-based devices can operate between 30 megahertz (MHz) and 4 gigahertz (GHz), at power levels exceeding 50 watts. They operate in this range very efficiently and, due to the excellent thermal conductivity of the material, dissipate heat efficiently. Therefore, SiC power amplifiers do not require the same cooling as Silicon (Si) or Gallium Arsenide (GaN) devices. Cree is targeting its novel devices for wireless infrastructure equipment, such as 3G wireless power amplifiers. ¨> UltraRF Acquisition Positions Cree In the Power Amp Business Today: Aside from being an exceptionally complimentary technology to Cree™s existing technologies, the acquisition of UltraRF provided developed, saleable laterally diffused metal-oxide semiconductor (LDMOS) and Silicon bipolar products into the power amplifier market. We believe the relationships Cree can build using the LDMOS product line produced at UltraRF will enable it to leverage next-generation technologies based in SiC and GaN. ¨> Blue Lasers Enable Increases In Optical Data Density: The blue and near-ultraviolet laser diode market potential could provide significant upside to forward revenue estimates. Blue and ultraviolet light is approximately one-half the wavelength of red or infrared light. In optical storage devices, this means more data can be packed into a smaller area. International Data Corporation (IDC) estimates that the market for optical storage devices should grow to more than 300 million units in 2004 from approximately 130 million units in 2000. ¨> SiC Provides an Alternative to Incandescent Lighting: An attractive property of blue LEDs is the ability to convert the blue light to white light by passing it through a phosphor or other polymeric material. This provides a real alternative to white incandescent lighting. Currently, every traditional lighting manufacturer is working with a solid-state partner on alternatives to incandescent lighting. Cree has relationships with Osram Opto Semiconductors GMBH and GelCore, a joint venture between General Electric Lighting and EMCORE Corporation. ¨> SiC-Based Power Devices Are Very Efficient: SiC-based power devices have the potential to handle significantly higher power densities than existing Si-based devices. They can also operate at considerably higher temperatures and voltages with superior switching capabilities. This results in power savings and higher efficiencies. In 1999, the company entered into a three-year project agreement with Kansai Electric Power Company for the development of SiC-based power devices. Cree recently demonstrated a 12 kV high-efficiency SiC rectifier for use in electric power switching. ¨> Significant Growth Potential In Cree™s Total Available Market: The total available market for Cree products is expected to increase at a compound annual growth rate of approximately 28% between calendar year 2001 and 2005. In dollar terms, the market should grow to $2.2 billion from approximately $840 million. ¨> Strong Buy-Speculative Rating and $38 Price Target: Going forward, we believe Cree can trade conservatively at a forward 12-month P/E ratio of approximately 66x earnings or approximately 56x calendar year 2001 earnings. This is a significant discount to its historical average forward 12-month P/E ratio of 82x and a slight discount to the mean 2001 P/E ratio of its peer group of 59x. We rate Cree Strong Buy-Speculative with a price target of $38 per share.