Cree and Lextar in €63 million LED deal

Cree is making a $83 million (€63 million) investment in Taiwanese LED company Lextar, as part of a deal whereby Lextar will supply mid-power LEDs to Cree.

The deal, under which Cree will own approximately 13 per cent of Lextar, means the US company can focus efforts on the high-power LEDs that it specialises in.

The companies said they will enter a ‘long-term LED chip supply agreement, as well as an agreement for certain Cree LED chip and component intellectual property’, making Cree ‘Lextar’s strategic customer’ in the lighting market.

‘We are excited to be strengthening our relationship with Lextar to enable growth in LEDs and lighting,’ said Chuck Swoboda, Cree’s chairman and CEO. ‘Working with Lextar to supply high quality mid-power LED chips enables Cree to focus its resources on the high performance, high-power LED chips that differentiate Cree LEDs in the market. This approach provides the operational and financial flexibility to help Cree achieve the best return on our people and invested capital.’

‘Lextar has established a strong technology position and customer base in the mid- and low-power backlighting and lighting LED segments, while Cree has had outstanding performance in the high-power LED component and lighting markets,’ said David Su, chairman and CEO of Lextar.‘The cross licence of LED chip and component intellectual property will afford both Cree and Lextar the benefits from our product and technology development, thereby strengthening our mutual competitiveness in the global LED industry.’

The deal is still to be approved by Lextar’s shareholders and the Taiwan Investment Committee, but is expected to close by the end of September.

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