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Innovation

Cree CEO Chuck Swoboda: 'LED lighting revolution gained momentum' in 2010

The LED lighting revolution is gaining momentum thanks to strong growth in outdoor lighting and LED bulbs, Cree CEO Chuck Swoboda says.
Written by Andrew Nusca, Contributor on

The LED lighting revolution is gaining momentum thanks to strong growth in outdoor lighting and LED bulbs, Cree chief executive Chuck Swoboda said Tuesday.

Speaking on a post-earnings conference call, Swoboda said the Durham, N.C.-based semiconductor- and LED-maker saw record earnings in 2010, jumping 53 percent to $867 million.

"Fiscal 2010 was a record year for Cree, as the LED lighting revolution gained momentum," Swoboda said, adding that the company's profits exceeded targets. "We remain in a strong position to continue to invest in our business, and lead the adoption of LED lighting."

Swoboda said Cree saw strong Q4 growth in its XLamp LED component sales for outdoor lighting (such as street lamps) and LED bulbs, as well as incremental growth in LED lighting products for indoor commercial applications and power sales for solar inverters.

Swoboda outlined four objectives the company fulfilled in 2010:

  1. Grow its LED lighting components business more than 100 percent year-over-year. (Q4 LED product revenues: $240 million.)
  2. Establish leadership in LED lighting and disrupt the market with customer wins. (One win: Walmart.)
  3. Turn power and RF into a profitable and growing product line. (Q4 revenues: $24.5 million.)
  4. Increase non-GAAP operating profit. (244 percent year over year, in fact.)

But the key takeaway here is that the LED business is beginning to boom. Cree is already tracking ahead of last quarter's level, Swoboda said.

"Demand for lighting-related products is targeted to grow double digits sequentially, driven by the U.S. and Asia, while European demand is seasonally slow," he said. "LED chip demand is down due to weakness in consumer related backlighting applications. We see this as a short-term correction, and still believe the long term trend to LED backlit TVs will continue."

Swoboda also outlined the company's plans for 2011.

Goals include:

  1. Continue to "challenge people's addiction to old, energy-wasting technologies" by developing better products.
  2. Enable lighting fixture companies to develop and introduce their own LED system products to drive demand for LED components.
  3. Stay at the forefront of the technology curve by investing in capacity expansion to drive scale and accelerate the transition to 150-millimeter wafer production.
  4. Develop a silicon carbide power product line in response to growing demand for energy-efficient power switching technology.

There are two applications driving the LED industry: LED-backlit televisions and general lighting. The latter's more complex, Swoboda said.

In terms of general lighting, we remain confident that we are in the early stages of broad adoption to LED lighting over the next 10 to 15 years. This is a regional business that is not one application, but the combination of many different lighting applications, which each require unique solutions to specific lighting problems. Our focus is to be the company that enables this market.

Still, LED lighting remains a very small percentage of the market. In terms of applications, the prospective markets are, in order of importance:

  1. General lighting (best segments: outdoor, vault)
  2. Automotive/transportation
  3. Video screen market
  4. Mobile
  5. LCD backlighting

Swoboda closed by noting that there is "tremendous opportunity" in the general lighting market, calling Cree and Japanese rival Nichia top-tier manufacturers and Osram [Sylvania] and Philips "fast followers" for lumen efficacy.

"I think if you look at what we target for adoption, I think when you're in a small percentage of the market, we can continue to drive significant growth," he said. "The exact timing of that is, as you know, pretty tricky because we're trying to take very large industry segments and one by one, show people LED lighting works."

Photos: CEO Chuck Swoboda; Cree's XLamp 7090 16-lumen LED. (Cree)

This post was originally published on Smartplanet.com

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