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Non-Tech : Secret Squirrels hit! -- Ignore unavailable to you. Want to Upgrade?

To: Trumptown who wrote (871)	9/11/1998 7:32:00 PM
From: Tom Swift	Read Replies (2) \| Respond to of 12872

SR, This is long and rambling, but I have been watching these guys for many years and it's kind of complicated. CREE - looks interesting...I agree with Wayne...should be able to get it closer to $10...latest release probably fueled the share price...should settle down. Looks like a great long term buy... Yes, I agree. I would like to get some at $10 or below as a long-term hold. I had some at $5, years ago but sold too early, before it ran up to ~$60 and split. Now that it is getting cheap again, I would like to try again. Also note that there was a shareholders lawsuit involving the runup which was dismissed. Pros: - Recent insider purchases - License agreement with Siemens - Earnings growth relative to revenue growth looks great - looks like a nice niche (is their technology protected/patented?) - small/better transistors - If they can pull off the Real color moving LED's they'll rock - nice web page Cons: - Is this technology protected? - "However, the Company is presently evaluating alternatives for financing the development of new applications of its technology, including its blue laser technology." - " For the year, cash on hand has also increased by $2,911,000 as a result of stock option and warrant exercises." ___________________________________ "Cree Research is the world leader in the development and manufacture of silicon carbide (SiC), which is a base material used in the fabrication of the Company's blue light emitting diodes (LEDs), wafers and gemstone materials. The company was formed in 1987 by a group of researchers from North Carolina State University, who were pioneers in the development of single crystal silicon carbide" Funny, CREE sounds alot like what Rhombic is trying to do with the Diamond doping...hope NUKE becomes as successful as CREE All in all the technology looks cool...any clues on what the next earnings will look like? If they can keep those going the stock should do great...on my watch list...thanks Some history: CREE was started by a small group of grad students from NC State that studied under Bob Davis (who is very famous). They hooked up with the Hunters early on. The Hunter brothers were probably VCs or angels at first but now run the company. Cree started out specializing in silicon carbide. They developed wafer growth and device processing capabilities and were focussed on developing and marketing SiC blue LEDs and SiC power transistors for switching large electrical loads (utility-scale) and Radar applications. The advantages of SiC are high blocking voltages, high thermal conduction (to dissipate heat) and high mobilities (for high-speed devices). The disadvantages of SiC are that it is very hard to work with (etching, doping, contacts . . .), there is a problem with interface states at the oxide-SiC interface, and there are holes -- called micropipes -- in the wafers which make large devices such as power transistors very hard to make. Before Cree was founded, Westinghouse was the only company seriously working on SiC. Cree basically kicked their butts technologically and started selling wafers to the public (at very high prices), did R&D on the devices they wanted to market, and started selling Blue SiC LEDs (which at the time were an order of magnitude brighter than the GaN MIS LEDs which were being sold by Sanyo). The Westinghouse SiC work was moved to Northrop-Grumman where they are still working on in-house Radar devices. This is the history till about 1993. In '92,'93, a group of people at APA-Optics developed a method of doping GaN both p- and n-type and made some detectors and transistors. This was a revolutionary development -- I will not explain it in detail, but the Al-In-Ga-N system has a lot of advantages compared to SiC and there was serious discussion about abandoning SiC (in Govt. funding) to concentrate on the III-N compounds. Shortly thereafter, a group at Nichia developed a GaN blue LED which is way brighter than a SiC LED. To see a SiC LED, you really need to be in a dim room. The new GaN LEDs dazzled your eyes and made you see after images. Now, these new LEDs (and the Lasers that followed) were grown on sapphire substrates which are non-conductive. This makes it hard to make the LEDs since you need to use all top contacts. Also the heat dissipation is not that good, which is important in devices that have high current densities. What Cree did at this point was follow the pack into GaN devices which they grew on SiC substrates. Silicon carbide has a small enough lattice constant that good quality III-N compounds can be grown on it, is conductive, and has excellent heat dissipation. Nowadays, most of the GaN devices are grown on SiC and Cree has an important advantage in that they can make their own substrates. There are only four companies that I know of that sell SiC substrates: one is a Russian group that is selling small Lely platelets, the second is ATMI, the third is Cree, and the fourth is an American company (that I can't remember the name of) that licensed the technology from Northrop-G just recently. There are probably a few companies in Japan that are making substrates, but I have not heard of any selling them. Most people are buying from Cree, as far as I know, but this may change as competition increases and these new companies prove themselves. Cree currently sells SiC substrates and GaN/SiC LEDs. They have worked on full-color LED displays and signs. At one time, they owned an off-shore LED display company (which, I believe they acquired for non-payment on deliveries), but may have sold this off. They have demonstrated a CW-blue laser, but are behind Nichia. They are working with Siemens on the laser and apparently selling them a lot of LEDs. Blue lasers have a huge potential market if they can be brought down to the <$10 range. The transistors seem to have been demphasized, but if they have a breakthrough in that area there is a huge market. There is also this Moissinite stuff. Last year the Hunters did an IPO for a company called C3. This company plans to cut SiC boules into gemstones and sell them as diamond substitutes. You need to look at how this IPO money has been moved around. C3 stock has dropped consistently since the IPO but the Hunters claim that all is going ahead as planned and they are now selling small amounts of gemstones. Anyway, at $10 CREE looks very tasty for a long-term hold -- they are a real company and have a lot of potential. At $12, they go on my close watch list. I would not touch C3 at all right now, but if it starts to trend up for a while I may get on for a short-term ride. Regards, Tom