Solid State Lighting Revolution January 2010 Jovani Torres.

Solid State Lighting Revolution

January 2010Jovani Torres

Copyright © 2009 Cree, Inc. pg. 2

Disclosure: Forward-Looking Statements

This presentation includes forward-looking statements about Cree’s business outlook, future financial results, product markets, plans and objectives for future operations, and product development programs and goals. These statements are subject to risks and uncertainties, both known and unknown, that may cause actual results to differ materially, as discussed in our most recent annual and quarterly reports filed with the SEC.

Important factors that could cause actual results to differ materially include current uncertainty in global market conditions that could negatively affect product demand, collectability of receivables and other related matters; our ability to successfully develop new products; our ability to lower costs; increasing price competition; the complexity of our manufacturing processes and the risk of production delays and higher than expected costs; risks associated with the ramp-up of production for new and existing products; the rapid pace of technology development that could affect demand; and the difficulty of estimating future market demand for our products.

The forward-looking statements in this presentation were based on management’s analysis of information available at the time the presentation was prepared and on assumptions deemed reasonable by management. Our industry and business are constantly evolving, and Cree assumes no duty to update such forward-looking statements to reflect subsequent developments.


Founded in 1987

•Public since 1993 (Nasdaq: CREE)•Headquartered in Durham, NC

Cree

Global Reach

•11 Major Locations•3,200 Employees•Fiscal 2009 Revenues $567M

Cree LED Businesses

LED Lighting • Lead the market &

accelerate adoption• Create demand/pull for

LED lighting

LED Components• Drive Revenue• Enable the market

with “lighting-class” LEDs

LED Chips• Technology to enable

components

Market Opportunity

LED Lighting

Materials

LED Components

LED Chips

pg. 4


Cree Mission

Lead the LED Lighting Revolution and obsolete energy-inefficient

light bulbs

pg. 5


It’s Happening Faster Than You May Think…

LED Lighting

Conventional Lighting

Global General Illumination Market**R

evenue

(Bill

ions)

** Source: Philips Lighting


…A Brief History of Lighting

1879Edison Light

Bulb

U.S. 223,898

1901Fluorescent

Tube 1919Sodium

Vapor Lamp

1970sFirst Red

LED

~1990“High Brightness”

Red, Orange, Yellow, & Green LEDs

1995“High Brightness”Blue, Green LEDs

2000White LED Lamp

demonstratesIncandescent

Efficacy (17 lm/W)2005White LED Lamp

demonstratesFluorescent

Efficacy (70 lm/W)

2009Production White

LED LampExceeds 100 lm/W

• Current lighting technology is over 120 years old

• LEDs began as just indicators, but are now poised to become the most efficient light source ever created

Calculators and Indicators

Monochrome signs

Full Color Signs

Solid State Lighting


Brief History of LEDs

• 1955 – RCA reports IR emission using GaAs• 1961 – TI gets patent for IR LED• 1962 – GE develops first visible LED• 1968 – Monsanto develops first commercially available LEDs for HP35 calculator• 1970’s - GaP-based red, green and yellow• 1980’s – AlGaAs/AlInGaP red and amber LEDs• 1990’s – InGaN LEDs and YaG phosphor• 2000’s – White LEDs for SSL


Basic Advantages of LED Light

•LEDs are…very energy efficient >100LPW (near-term roadmap to >150LPW…)

•Are directional No wasted light, any pattern possible

•Have very long lifetime >50,000 hours to 70% Lumen Maintenance (L70)

•Are inherently rugged No filament to break

•Start instantly nanoseconds vs. > 10 min re-strike (HID)

•Are environmentally sound no Hg, Pb, heavy metals

•Are infinitely dimmable, controllable New lighting features, power savings

•Love cold temperatures No cold starting issues


One teaspoon of mercury can

contaminate a 20 acre lake. .

Effects of Mercury on the Environment

* www.lightbulbrecycling.com

Forever.*

Each year, an estimated 600 million fluorescent lamps are disposed of in U.S. landfills amounting to 30,000

pounds of mercury waste.*

The mercury from one fluorescent bulb can pollute 6,000 gallons of

water beyond safe drinking levels.*


LED Chip

• Determines raw brightness and efficacy

Phosphor system

• Determines color point and color point stability

Package

• Protects the chip and phosphor

• Helps with light and heat extraction

• Primary in determining LED lifetime

LED Technology

LED Chip

Package

Phosphor

LED Chip

Package

Phosphor


Current LED Lighting Applications

•Lumens•LPW•Lumens/$


Why LED Lighting?

The widespread use of LEDs over the next 10 years can:

• Save energy (Good)

• Save money

• Help protect the environment (Green)

LED lighting can reduce electricity needs for lighting by more than 60%


Why LED Lighting?

LED lighting can reduce electricity needs for lighting by more than 60%

US Electricity Consumption

Lighting22%

Commercial 59%

Industrial 14%

Residential 27%


0

50

100

150

200

2004 2006 2008 2010 2012 2014 2016 2018 2020

Year

Eff

icac

y (lm

/W)

Laboratory Projection - Cool White

Commercial Product Projection - Cool White

Commercial Product Projection - Warm White

Laboratory - Cool White

Commercial Product - Cool White

Commercial Product - Warm White

Maximum Efficacy - Warm White

Maximum Efficacy - Cool White

DOE Roadmap

US Department of Energy 2009 Multi-Year Plan for SSL

Cree cool white production

Cree warm white production


Haitz’s Law


How the Roadmap Really Works: Chip Improvement

• Major leaps forward on LF depends on major chip improvements

• Incremental chip improvements, phosphor efficiency, and learning curve historically improves 1-2 LF bins as well

Time

LF @

35

0m

A (

lum

ens)

Current Generation

Last Generation50

100

150Next Generation


LED Performance Continues To Increase

0

20

40

60

80

100

120

140

160

180

200

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Light Source Efficiency Trends

CW

Lu

men

s/w

att

Incandescent

CFL

Linear Fluorescent

HID

LED

3 yrs

~2 yrs

? yrs186 LPW

161 LPW

131 LPW

R&D Announcement

XP-GXP-E

High Volume Production

XR-E

XR-E

pg. 18

Solid State Lighting Revolution January 2010 Jovani Torres.

Documents

led lighting led components

led lighting revolution

red led

ir led

visible led

environment green led

philips lighting slide

production white led