LED lighting specialist Cree, Inc. has announced an investment of $83 million in Lextar Electronics Corporation. The two companies will enter into a supply agreement for sapphire-based LED chips with Cree investing approximately $83 million to purchase 83 million Lextar shares, equivalent to 13% of Lextar. Lextar and Cree will also enter into a long-term LED chip supply agreement, as well as a royalty-bearing license agreement for certain Cree LED chip and component intellectual property.
Cree Chairman and CEO Chuck Swoboda commented that the agreement will strengthen their relationship with Lextar to enable growth in LEDs and lighting, explaining that working with Lextar to supply high quality mid-power LED chips will enable Cree to focus its resources on the high performance, high-power LED chips that differentiate Cree LEDs in the market.
Dr David Su, Chairman and CEO of Lextar said that Lextar has established a strong technology position and customer base in the mid-power backlighting LED segment, while Cree has outstanding performance in the high-power LED component and lighting markets. Lextar believes the new collaboration will increase the competitiveness of their products and technology, enabling continued growth for both companies in the LED lighting market.
He added that the cross license of LED chip and component intellectual property will afford both Cree and Lextar the benefits from their product and technology development, strengthening their mutual competitiveness in the global LED industry.