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Cree pumps cash into XLamp development

Cree is promoting the switch to solid state lighting through increased sales of its XLamps.

Cree posted a growth in quarterly LED revenue resulting from increased sales of its high-brightness XLamps that can be used for various outdoor lighting applications.

"With the growing demand for XLamps we could be capacity limited in Q3," remarked Cree's CEO, Chuck Swoboda, during the company's second fiscal quarter 2006 conference call.

However, Swoboda added that Cree is in the process of increasing the manufacturing capacity for its XLamps, and is qualifying capacity at a manufacturing partner.

The company is aiming for the XLamps to deliver 10% of its LED sales by the end of this calendar year.

Development of the XLamps and other high-brightness (HB) LED chips has increased R&D quarterly spending to $14.8 million, a rise of $2.0 million sequentially and up $4.5 million year-on-year.

The increase has contributed to a fall in quarterly profit to $17.7 million, despite a record revenue of $109.0 million that included $3.3 million from the company's recently discontinued silicon microwave business in Sunnyvale, CA.

Cree expects that third quarter revenue will be between $105 million and $110 million. It says that any seasonal decline in LED shipments to handset makers will be offset by increased sales of XLamps, HB LEDs for gaming applications such as the Japanese Pachinko machine, and SiC Schottky barrier diodes for electrical power systems.

Third quarter profits are predicted to be in the range $19.2 million to $20.8 million, while R&D spending is expected to be between $14.7 million and $16.5 million.

As well as funding improvements to LED chip performance, R&D spending will be directed at increasing the lifetime of its GaN lasers that are being developed for next-generation DVD players.

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