News: LEDs
1 March 2021
Cree completes sale of LED business to SMART Global Holdings
Cree Inc of Durham, NC, USA, which provides silicon carbide (SiC) technology through its Wolfspeed business, has completed the sale of its LED Products business unit (Cree LED) to SMART Global Holdings Inc. SMART will now license and incorporate the Cree LED brand name into the SMART portfolio of businesses, and Cree will change its corporate name to Wolfspeed later this year.
Under the terms of the transaction, Cree will receive up to $300m, consisting of a $50m cash payment at close and a $125m seller note issued by SMART to Cree (to be paid upon maturity in 2023). Cree also has the potential to receive an earn-out payment of up to $125m based on the revenue and gross profit performance of Cree LED in the first full four quarters after the transaction’s completion, also payable in the form of a three-year seller note.
The sale of the LED Products business unit follows Cree’s sale in May 2019 of its Lighting Products business unit (Cree Lighting, including the LED lighting fixtures, lamps and corporate lighting solutions business for commercial, industrial and consumer applications) to Ideal Industries Inc of Sycamore, IL, USA.
Cree LED’s product families include blue and green LED chips, high-brightness LEDs and lighting-class power LEDs targeted for indoor and outdoor lighting, video displays, transportation and specialty lighting applications.
Having specialized in specialty memory, storage and high-performance computing solutions serving the electronics industry for over 30 years, SMART reckons that Cree LED will be able to leverage its diverse customer base and global operations.
“The completed sale of Cree LED represents a major milestone in our transformational journey, establishing the company as a pure-play global semiconductor powerhouse, well positioned to lead the industry transition from silicon to silicon carbide,” believes Cree’s CEO Gregg Lowe. “As industries across the globe look to increase efficiency and performance with smaller, more scalable power systems, this evolution sharpens our focus and strengthens our continued investments to capitalize on multi-decade growth opportunities for Wolfspeed silicon carbide and gallium nitride (GaN) solutions across electric vehicles (EVs), 5G and industrial applications,” he adds.
Cree’s ongoing capacity expansion plans include its materials factory at its North Carolina headquarters and its Mohawk Valley Fab construction in Marcy, NY which, upon completion, will be the world’s largest silicon carbide manufacturing facility, as well as the first 200mm silicon carbide fabrication facility, with production expected to begin in 2022.
Cree’s Wolfspeed quarterly revenue grows by 5%
Cree selling LED business to SMART for up to $300m
