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To: slacker711 who wrote (6600)	1/17/2003 10:31:47 AM
From: jameswallen	Read Replies (1) \| Respond to of 10714

There is also the issue of productivity. Their equipment may be idle much of the time, so better scheduling could improve capacity. Also, I don't know if their manufacturing is a 24 hour a day operation.

To: slacker711 who wrote (6600)	1/24/2003 2:08:14 PM
From: jameswallen	Read Replies (1) \| Respond to of 10714

I believe Cree will be able to cut Cost of Goods Sold by an order of magnitude over the next 3-5 years. I came to this conclusion after reading a thread on the Motley Fool boards entitled "Slicing and Dicing" (http://boards.fool.com/Message.asp?mid=18465787). This thread referenced an article in Compound Semiconductor Magazine where the authors talk about the improvements in cutting SiC and sapphire substrates using a UV laser instead of a cutter with a diamond tip (http://compoundsemiconductor.net/magazine/article/8/12/3/1). The advantages are summarized in this table compoundsemiconductor.net. The most important metrics are that wafer throughput goes up by a factor of five, operating cost per wafer drops by a factor of 40, and the process is fully automatic where as the cutting process with diamonds is heavily dependent on the skill of the operator. I wish Cree had been more explicit on their timing for improving capacity/COGS. However, they have a proven track record of improving their manufacturing process, so I am confident that they can achieve their capacity goal.