Company Overview and Financial Performance
Cree Inc., the parent company of Wolfspeed, is a leading American semiconductor manufacturer headquartered in Durham, North Carolina. The company designs and manufactures silicon carbide (SiC) and gallium nitride (GaN) power and radio-frequency components. Cree's fiscal year 2018 revenue was approximately $1.03 billion, with a net loss of $302 million, reflecting significant investment in expanding its SiC substrate capacity. The company's Wolfspeed division focuses on power electronics for electric vehicles, renewable energy, and industrial applications.
Cree's stock is traded on the NASDAQ under the ticker symbol CREE. In 2018, the company faced headwinds from a global semiconductor downturn and intensifying competition in the SiC market. Despite the losses, Cree continued to invest heavily in research and development, allocating over 16% of its revenue to R&D. The company's Q4 2018 earnings report showed a decline in revenue to $250 million, a 14% decrease from the same quarter the prior year.
Product Portfolio and Technology Leadership
Cree's product portfolio is centered on silicon carbide substrates, which are critical for high-voltage, high-temperature power devices. The company's SiC substrate technology is a foundational material for next-generation power electronics, enabling more efficient energy conversion in electric vehicles and grid infrastructure. Cree's SiC wafers are sold to major power device manufacturers, who use them to produce chips for inverters and on-board chargers.
The company's SiC substrate shipments grew in the latter half of 2018, driven by demand from the automotive sector. Cree's technology roadmap includes the development of 200mm SiC substrates, a significant scale-up from the industry-standard 150mm wafers. This transition to larger wafer sizes is expected to reduce the cost per die and accelerate the adoption of SiC in mass-market electric vehicles. Cree's research into GaN-on-SiC technology also positions it for growth in 5G wireless infrastructure and radar systems.
Market Position and Strategic Developments
In the competitive landscape of wide-bandgap semiconductors, Cree holds a strong position in SiC substrates, competing with companies like STMicroelectronics and Infineon. The global SiC power device market was projected to grow significantly in the late 2010s, driven by the electrification of transportation. Cree's strategy involves leveraging its substrate expertise to become a key supplier to the power device ecosystem, rather than competing directly with chip manufacturers.
Cree's strategic developments in 2018 included partnerships and investments to expand its manufacturing footprint. The company's investment in SiC capacity was supported by the growing demand for electric vehicle powertrains. Cree's CEO at the time, Gregg Lowe, emphasized the company's role in enabling the transition to electric mobility through its advanced materials. The company's long-term viability is tied to the success of SiC in displacing traditional silicon in high-power applications, a trend that was accelerating in the automotive and industrial sectors.