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American Capital Agency Corp. Message Board

  • Cree makes LED (light emitting diodes) and some other semiconductor products which utilize the semiconductor material Silicon Carbide. Cree makes the most efficient LEDs on the market. Cree also has a lighting division which uses their LEDs to make down lights (recessed lighting) and the like, and LED street lights. China is a huge customer of their street lights because China has trouble generating enough electricity to keep up with demand so they have turned to methods of using less electricity. LED street lights are one such method and to this end China offers incentives for using LED street lights over other street lights. This has created a very large demand for Crees’s LEDs and their LED street light products.

    I personally have installed Cree's LR6-DR1000 recessed lighting in my kitchen and reduced my consumption from 300 watts to 75 watts. Also the LEDs can be dimmed. I plan to install their new LR6-10L in the living room which has an incredible 91 lumens per watt efficiency (actually called luminous efficacy because it accounts for the response of the human eye). This is record breaking. Thus for a 1000 lumen recessed light you burn 11 watts. A 60 watt bulb emits 800 lumens. 4 of these in the living room would be enough and you would likely have them dimmed so that your TV is easier to see. So you are talking about 44 watts for your living room lighting for the equivalent of about 300 watts of light which is normally where most of your light energy is expended. I have LED bulbs in all my lamps but because the lamps are not optimally positioned I have to expend more energy to get the same effect. They light up too much of the edge of the room and not enough of the center. I plan to correct this problem in the future. I will probably install them in the dining room as well so I can get rid of the light fixture than hangs above the table when is too busy looking for my taste.

    If you look at Cree’s stock price it jumped from $33 and change to over $42 dollars since their last quarterly report a few days ago. I’m not recommending them as a buy because their PEG is pretty lofty right now. But if you do want to buy it I suggest you listen to their last conference call first. It is on their web page. I currently do not own it but I am contemplating it. I need more time to figure out if this is a trend or a glitch and if higher growth rates in the future will cause the PEG to decline.

    China has a huge electricity problem. This not something they can afford to be fickled about. For them it is not about green house gasses. They simply don’t have enough electricity generating capacity to supply all the demand and the demand keeps increasing. Also the Chinese aren’t that good at making high efficiency LEDs. They can make them cheaper but then you pay for it in electricity in the long run. So they buy from Cree and some other suppliers outside of China. It turns out that high efficiency LEDs are hard to make and the secret sauce is highly guarded. The main players are in Japan, the US, Germany, and Korea. Because Cree has the best performance they have the highest margins. Right now the industry is in the process of converting from 4 inch wafers to 6 inch wafers which is driving down prices which in turn is driving up adoption.

    The Japanese (Nichia) were actually the original innovators of these LEDs but they #$%$ off the lead scientist (Shuji Nakamura) who was making all the innovations and he moved to the University of Santa Barbara to head their efforts on Gallium Nitride research, which is the material that is used to produce the blue light that is used to excite the phosphors used in the while light LEDs. Cree is the only company that grows a layer of Gallium Nitride on Silicon Carbide which has superior thermal properties. Everyone else uses sapphire because it is easier. It turns out the LEDs put out less light when they get warmer and Cree’s LEDs run cooler because of their lower thermal impedance. Cree has used the brain trust at University of Santa Barbara extensively to tweak their process which is why they excel. Nichia shuns them because of the bad blood that exists between them and as a result they are falling behind. If you leave a Japanese company you have made and enemy for life.

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    • I just noticed CREE was (is?) in the top ten holdings of FSPTX. Yikes tho +80x times earnings.

    • They(LED) are our future, like it or not. The energy foot print is impressive. They are a unidirectional light source and I personally do not like their color temperature nor brightness for general room lighting. Before you go on a didactic rampage about phosphorous filters or RGB filters or combinations, STOP. I know you can get different bulbs attempting a match to white light. I still like the color and the beam width advantage of incandescent lighting with neodymium filters.(Eg Phillips "Reveal").

      These(incandescent) also help to warm our houses in the FTN(Frozen Tundra of the North), where I live. Perpetual snow for the past month or so(who's counting...maybe we'll see the grass in two more months).

      I tried to get incandescent lights for my child's dorm room light in California. I couldn't even find a bulb over 57 Watts at the stores. LED will soon be mandated, which is what it is, and I get it. I still prefer incandescent for my reasons stated. CFL was a failed experiment at energy savings. (The production of a bio-hazard to save the environment). LED is so much better than that.


      • 1 Reply to reits_r_us
      • I hear you about the cold weather. For about a month it has been getting down to the high 40s at night which is almost unheard of in the LA area. Lately I have had to wear a ski jacket to walk the dog. Even the dog has been avoiding going outside to the back yard. We leave fluffy throws on the living room couches and she usually finds one to curl up in. When I drive to work in the morning there is no heat as I'm in EV mode and thus the engine is cold. I could turn on the heater but that would cause the engine to turn on which would cause a dreaded hit to my gas mileage. I have also noticed that my EV battery seems to charge to a lower capacity when it is cold and I can't turn on the charger until after midnight when the low electricity rates kick in but it is colder then. It seems that winter is mucking everything up except for those who spend their weekends skiing up on Mammoth Mountain. They seem to be the happiest. The rest of us suffer.

    • I'm sorry, but doesn't this qualify for an OT. Interesting, but.......

    • I could look it up, but say, how much do these Cree lights cost? I imagine the last indefinately?

      • 1 Reply to herexhear
      • They last at least 50,000 hours which translates to about 20 to 25 years. There are no bulbs to replace in the down lights when they burn out. You replace the entire fixture which I assume will be even more efficient by that time. The down light fixtures are about $100 and 60 watt equivalent replacement bulbs go for about $18 but that is about half of what they went for a few years ago. The biggest problem of adoption is that most people can't do the break even calculation. But they have been putting that kind of stuff on the packaging now days like how long it takes to start saving money or how much money one saves over the life of the bulb.

        In California a kilowatt hour (KWH) cost 25 cents once you go past about $300 KWH. Ao a 60 watt bulb uses about one dollar of electricity more and an LED bulb in in 80 hours. If it is on 4 hours a day then that is 20 days. So it takes 360 days or 1 year to break even on an $18 bulb. Most people just see $18 and think it is too much. They don't realize that they will be getting light for almost free in one year.

        I replaced my refrigerator with an ultra efficient version, replaced all my light bulbs with LEDs and replaced my desk top computers with efficient notebook computers and now my electric bill isn't a significant portion of my monthly budget anymore. Previously I had compact fluorescent bulbs but they use about twice as much as LEDs and they have mercury in them which is toxic to the environment. Now I have a box full of CPF bulbs in the garage waiting to be properly disposed. My heat and hot water is gas and I have a tankless hot water heater and in California the furnace doesn't get used that much as the temperature here is pretty warm all year round. We don't have air conditioning because the cool ocean breeze makes it unnecessary. Land in California may be expensive but one's energy foot print can be pretty low if you use your common sense. I have a separate meter for my plug in Prius and it's rate is 12 cents a KWH. But it cost me so much to have the second meter installed I'm not sure I will ever break even unless I get all electric car which I probably will in the future. I don't drive my own cars on trips. I rent so if it breaks down I can walk from it. So the range issue is a non issue for me. Besides, you save money if you rent a car and drive long distances as the fuel cost per mile plus the rental cost is less than actual cost per mile for a car that you own. That is another calculation many never make. If it cost you 35 cents a mile to drive your own car and you travel 1000 miles in 5 days and pay $150 to rent and $30 on gas that is less than the $350 it cost to drive your own car. Why not drive a brand new car when you go on a trip and let your own car stay in the garage? A coworker convinced me of the logic of this. They guy who pays for your trip is the guy who buys the used car from the car rental company.

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