When Cree LED owner SGH presented its first quarter financial results last month, CEO Mark Adams alluded to three high-power LED chips that the company had introduced during the three months. That took some observers by surprise. Try to find a press release on these. You won’t.
While it’s probably a stretch to call the announcements “stealth,” it’s fair to say that Cree LED, once a fixture in the industry spotlight, is keeping a low profile in the general public these days.
It’s a characterization that Adams does not dispute, some two-and-a-half years after he stepped into the SGH helm, and a little over two years after Milpitas, CA-based SGH agreed to acquire Durham, NC-based Cree in a transaction that closed in March 2021.
“We’re going to fly under the radar,” Adams told LEDs Magazine in a crisp, wide-ranging interview that also touched on an emerging interest in lasers and Cree’s shift to outsourcing. Adams described the quiet, measured approach as part of “the culture I’m trying to establish at SGH.”
Not that Cree isn’t spreading the word about its LEDs. Someone told somebody something that led to $112 million in LED sales for the quarter ended Nov. 26, 2021 — an amount which Adams described during a recent earnings call with analysts as “up substantially” from the same quarter a year earlier, when Cree still belonged to its previous owners Cree Inc., now called Wolfspeed Inc.
But rather than going for what Adams said can often be the “hype” of public announcements, the company has been focusing on communicating with systems integrators and engineering outfits that build Cree’s specialty LEDs into their end products. Adams explained that Cree builds to spec for customers in the architectural, stadium, video display, and emergency vehicle sectors, among others.
“The opposite of that would be making commodity products for consumer goods that are industry standard and creating low-margin, high-volume production,” he told LEDs. “We’re working in an engineering-focused model and designing our products specifically for customer needs. It’s a classic-make-to-order rather than make-to-stock.”
The “custom” approach, in fact, marks the common thread across SGH’s three business areas, which in addition to LEDs include high-performance computing services and products, and memory modules, Adams noted. The synergies between the LED division and the disparate computing operations are not in products per se but in the business model.
Adams does not see Cree deviating from the specialty route. More custom chips are coming this year that will allow architectural, entertainment, horticultural, and medical systems developers to more easily mix colors.
In fact, “specialty” will be the basis upon which Cree will eventually enter the Li-Fi market, from which it has thus far refrained.
Li-Fi, which transmits data via visible light or nonvisible light spectra rather than via the radio waves of Wi-Fi or cellular, is something that Adams perceives as “very custom in nature around the design and form factor and management of devices.”
Cree is in no rush to enter the Li-Fi world; it continues for now to focus on integrating its existing business into SGH, which took ownership 11 months ago.
But when it does turn on the Li-Fi switch, it will deploy laser chips, rather than LEDs, Adams said. As LEDs has been pointing out, Li-Fi has been sluggish in market takeoff, and its use might not really accelerate until the technology shifts away from LEDs and to faster laser chips.
“LED Li-Fi has been slow in adoption,” Adams agreed. “My experience is all these new great technologies get launched well ahead of the market requirements and needs. My sense is there’s a much bigger opportunity with lasers.”
So will Cree move to lasers for other applications as well, not just Li-Fi?
“Yes, I think so,” Adams told LEDs. “It’s got to be part of our solutions set. We’ll invest accordingly.”
Those investments will likely take the form of an acquisition, he indicated.
Adams also reflected on the state of overcapacity in global LED production, on Cree’s shift from silicon carbide materials to sapphire, on LED costs, on his move to SGH from chipmaker Lumileds where he had been boss, on guitars, and other subjects. Watch for part 2 of this interview story.
MARK HALPER is a contributing editor for LEDs Magazine, and an energy, technology, and business journalist ([email protected]).
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