Cree and Sumitomo sign $160m LED contract
Chuck Swoboda, Cree s president and CEO stated, “This new agreement is the largest purchase commitment in Cree s history and highlights the strength of our partnership with Sumitomo and our Japanese customers.”
Last year, Sumitomo, which sells Cree’s LED chips to packaging companies in Japan, made a commitment to buy $100 million of chips during Cree’s 2004 fiscal year (see Sumitomo to buy $100 million of Cree LED chips (April 2003)).
To put this into perspective, if Cree meets its sales targets for the current quarter, its total revenue for the 2004 fiscal year will reach $300 million.
The latest deal is subject to end-customer demand and other terms and conditions. As part of the agreement, Cree and Sumitomo also announced the extension of the current distributorship relationship through Cree s fiscal year ending June 2007.
“We believe the growth in Japan is representative of the strong worldwide demand for our LEDs,” said Swoboda. “New products are driving end-customer demand and helping us expand our relationships with the major LED packagers.”
Koichiro Kusano, general manager of Sumitomo s Electronic Materials & Equipment division stated, “We expect shipments to Japanese customers during the twelve months ending June 2004 to exceed our contract commitment, and end-customer demand continues to grow. The technology being delivered by Cree, combined with the strong market demand for high-brightness blue, green and white LEDs in Japan, continues to be a winning formula for success in the market.”
Both companies anticipate that the purchases will cover Cree s full line of LED products representing its standard brightness, mid-brightness and high brightness devices, including MegaBright, XBright and XThin LEDs.
