Yesterday (19), Cree announced that it had reached a final agreement with SMART Global Holdings, Inc. to sell the LED product division (Cree LED) to SMART. The transaction price reached US$300 million, including an advance payment of US$50 million and a deferred payment of 1.25 100 million US dollars and contingent consideration (earn-out) 125 million US dollars.
Cree said that this transaction further clarifies the company's strategic positioning. Cree will lead the industrial transformation from silicon to silicon carbide and further strengthen the company's financial position. Based on this, Cree will continue to invest in the semiconductor field and take full advantage of growth opportunities covering new energy vehicles, 5G and industrial applications.
Cree LED is one of the most powerful brands in the industry, and its product portfolio includes high-efficiency LED chips and high-performance LED components. SMART is a global leader in dedicated memory, storage and high-performance computing solutions, serving the electronics industry for more than 30 years. With SMART's diverse customer base and global operating capabilities, Cree LED will continue to provide customers with industry-leading products.
The transaction is subject to regulatory approval and meets customary closing conditions. It is expected to be completed in the first quarter of 2021. After the transaction is completed, SMART will authorize and incorporate the Cree LED brand name into the SMART business portfolio.
According to LEDinside's understanding, Cree has announced its transformation into a high-tech semiconductor company since 2018. In the past two years, Cree has continued to invest and expand production plants to lay out and develop semiconductor fields such as silicon carbide and gallium nitride. On the other hand, lighting and LED related businesses are gradually being stripped off.
In March 2019, Cree announced the sale of Cree Lighting, its lighting products business unit, to the family company IDEAL INDUSTRIES. Cree Lighting includes LED lighting, light sources and lighting solutions for commercial applications, industrial applications and consumer use.
In May 2019, the sale of Cree Lighting was officially completed, with a pre-tax price of approximately US$310 million. The proceeds from this transaction are used to accelerate the growth of Wolfspeed (core power and radio frequency business) and expand the semiconductor business.
This re-sale of the LED product division marks another critical step in Cree's transformation journey. At present, the compound semiconductor market represented by silicon carbide and gallium nitride is booming. This move by Cree will further accelerate the application of silicon carbide and demonstrate its commitment to becoming a pure global semiconductor giant. (Text: LEDinside Janice)
