High-brightness sales boost Cree margin
US-based chip maker Cree reported revenue of $96.7 million for the third fiscal quarter of 2005, down $0.8 million sequentially, but up $19.5 million year-on-year.
Profit in the quarter was $20.7 million, a fall of $4.7 million over the prior quarter, but $5.7 million higher than the equivalent period last year. Gross margin for the quarter improved 3% sequentially to 53%.
According to Cree CEO Chuck Swoboda, gross margin improved through strong growth in high-brightness LED sales that offset softness in the company's mid-brightness category and shifted the product mix towards the higher end. Cree has also increased the proportion of material produced on 3-inch substrates to one-third.
Shipments of high-brightness LEDs, which are used for cell-phone applications such as backlighting and camera flash, increased from 52% to 66% of sales.
On the development front, Cree is also progressing its short-wavelength laser technology. "We're now working on devices made on GaN substrates that are being produced at Cree using technology acquired from ATMI," said Swoboda.
Cree said revenue in the next quarter would be up slightly at $98 million - $102 million, with the increase driven by growth in cell phone applications. Profit for the quarter is expected to be in the range $19 million - $21 million.
