The two companies have also entered into a cross-license agreement covering certain patent rights relating to white LED technologies.
Seoul Semiconductor, an existing Cree LED chip customer, has committed to purchase at least $40 million of LED products during the first five quarters of the supply agreement. Purchase commitments for subsequent periods will be negotiated annually.
The agreement extends through Cree's fiscal year ending June 2011 and may be extended up to five additional years if certain sales conditions are met.
Cree and Seoul have cross-licensed certain white LED patents and say that they will cooperate in defending these rights. The license granted by Cree to Seoul includes US patent no. 6,600,175 and is one of several Cree has granted to its strategic partners under the '175 patent.
"We are pleased to announce these agreements with Seoul Semiconductor, which are the results of several years of strong cooperation between our two companies to win market share for white LEDs," said Chuck Swoboda, Cree's chairman and CEO. "Our success to date has been mostly focused on design wins in the Korean market and we look to further expand this success on a worldwide scale over the next several years."
"As our business continues to grow, it is important to align with other industry leaders," said Chung Lee, Seoul Semiconductor's president. "Reaching this long-term supply agreement with Cree provides access to leading LED technology. Our partnering on wider technologies paves the way for added success in future applications. With the Cree technology, Seoul Semiconductor is positioned for further expansion of our business."
