cree collaborates with lextar to continue its growth momentum in led lighting
Cree, a leading LED manufacturer, invested $83 million and signed a sapphire supply agreement with Lextar Electronics Corporation Last week, based on LED chips. The companies have also signed a royalty license agreement for the intellectual property rights of specific Cree LED chips and components. Headquartered in Taiwan, Lextar is a vertical Integrated LED company with strong technical position and customer base in the mid-market LED segment with power backlight. On the other hand, Cree provides excellent performance in high-end areas Market for LED components and lighting. Cree believes that being a strategic customer of Lextar in the lighting market will make it possible for its continued growth in the led and lighting sectors. Corey will buy 83 million shares of Lextar at NT $30 per share. The agreement has been approved by the board of directors of the two companies and is scheduled to end in the second quarter of Corey\'s fiscal year 2015, subject to the closing conditions of other approvals and practices. At the close, Cree will become Lextar\'s second-largest institutional investor with about 13% of the company\'s shares. Strong top-level growth, combined with a strong balance sheet, has allowed Corey to be flexible in responding to new opportunities in the market. The company\'s current cash balance is $1. 2 billion no debt. As demand in the backlight market approaches saturation, the general LED lighting market is expected to be the main growth driver for the LED industry. Cree has a fully integrated vertical business model and is a market leader in LED and LED lighting products. This puts the company in a position to leverage the global LED lighting transformation. LED lighting accounted for 15- Currently 20% of the global lighting market, LED market share is expected to grow rapidly in the next decade. Cree expects strong growth in LED fixtures and LED bulbs to drive growth in its lighting space. To serve the growth in these areas, Cree\'s internal LED chip team focuses on high-performance, high-power LED chips to differentiate their LED in the market. Its LED manufacturing partners are focused on manufacturing some of the larger volumes, which allows the company to flexibly leverage its in-house plant to support new product ramps and reduce time-to-market for new technologies. Lextar will provide Cree mid- Power backlight LEDs, which will enable Corre to focus resources on high performance, highPower LED chip. The Company believes that this arrangement provides it with operational and financial flexibility to achieve the best return on employees and investment capital. We expect the LED market share of Cree to increase during our review. Our price is estimated to be $57. For Cree, 77 is much higher than the current market price. See our full analysis of Cree HereSee more in Trefis | View interactive Institutional Research ( Powered by Trefis) Get Trefis technology like our graph? Embed them into your own posts using the Trefis WordPress plugin.