The $64,000 question is, "does CREE SiC LEDs have a competitive advantage over their Al2O3 LED competitors? The above numbers tell me the answer is NO since CREE LED chip sales were up a measly 3% yoy!
Here's the crazy thing, the new mandate for efficient light bulbs replacing the old style incandescent bulbs is barely getting under way. As people use up their stash of old bulbs they will be faced with the stark reality - LED or nothing. And CREE has done the 35% growth thing with only a 7mm increase in expenses. That's remarkable in and of itself. With Ads, R&D, and ramping transportation costs, it seems reasonable that they would start out pricing the bulbs on the high side, then adjust downward as the true market breadth and depth presents itself. A whole lot easier to increase scale and sales using lowering of prices than raising them- dontcha think?
Indeed that is the beauty of this firm. Pure play vertically integrated LED play. Internal supply of chips explains how they manage to maintain flat consolidated gross margins even with lighting gross margins dropping.
Good point quantum.. Most people don't realize that Cree is THE manufacturing choice for the LED transistor and the substrate of SiC that goes into other manufacturers lighting products. So thet get to keep the high margin business all along the way. Te short sell going on right now is a terrific buying opportunity, IMO