Cree Plans to Fix the Lighting Business and Increase Profits

February 26

Today, in a presentation to investors in New York, Cree announced that it will fix the Lighting Business (Luminaires) and operate it within industry norms with regard to profitability.

Cree CEO Gregg Lowe stated that new product resources had been shifted to fix the business, and those resources would go back to developing new products.   He went on to say that the Lighting Business has been operating below industry norms and this will change under the new strategy.

In addition, he spoke of the LED business (components and automotive) and said it was all about focus.  He stated that the LED business is a great brand with a tremendous channel and has an enviable postion as a high performance player.  Lowe says that Cree will focus on areas in high power that are stickier, like high power automotive, that allow for more value.   High-power LED is Cree’s strength,  but it has been encroached by mid-power LED’s and Cree has reallocated some resources to mid-power which did not work out well.  Lowe emphasized the importance of the San’an Optoelectronics deal as it allows Cree to be in mid-power with low OPEX and no CAPEX.

The star of the show is Wolfspeed–their smallest, yet most profitable business, which will grow 4x by 2022 and be Cree’s largest and most profitable business.