Cree, Inc., the global leader in silicon carbide technology through its Wolfspeed business, completed the sale of its LED Products business unit to SMART Global Holdings, Inc. SMART will now license and incorporate the Cree LED brand name into the SMART portfolio of businesses, and Cree will change its corporate name to Wolfspeed later this year. Under the transaction terms, Cree will receive up to $300 million, which consists of a $50 million cash payment at close and a $125 million seller note to be paid upon maturity in 2023. Cree also has the potential to receive an earn-out payment of up to $125 million based on the revenue and gross profit performance of Cree LED in the first full four quarters post-transaction close, also payable in the form of a three-year seller note.
Gregg Lowe, CEO, Cree, said: “The completed sale of Cree LED represents a major milestone in our transformational journey, establishing the company as a pure-play global semiconductor powerhouse, well-positioned to lead the industry transition from silicon to silicon carbide. As industries across the globe look to increase efficiency and performance with smaller, more scalable power systems, this evolution sharpens our focus and strengthens our continued investments to capitalize on multi-decade growth opportunities for Wolfspeed silicon carbide and GaN solutions across EV, 5G and industrial applications.”
Cree continues to drive the industry transition from silicon to silicon carbide forward with its ongoing capacity expansion plans and technology leadership, including its materials factory at its North Carolina headquarters and its Mohawk Valley Fab construction in Marcy, N.Y., which upon completion will be the world’s largest silicon carbide manufacturing facility, as well as the world’s first 200-millimeter silicon carbide fabrication facility, with production expected to begin in 2022.
