“We have an opportunity to improve.”
And with that statement, Cree CEO Gregg Lowe kicked off the company’s Investor Day webcast on Monday, February 26.
Lowe and Cree focused on three areas throughout the webcast: Wolfspeed, LED, and Lighting. Each, according to Lowe, have strong signals for growth. “I have a strong excitement about the passion for innovation at this company,” Lowe told the crowd at the webcast. “Results don’t reflect innovation.”
Wolfspeed, according to Lowe, the Cree’s smallest and most profitable business sector. Lowe said it will become the largest, with a goal to quadruple revenue by 2022 as a “powerhouse in the semiconductor business.” Lowe describes Wolfspeed as a tremendous opportunity. “The objectives will be clear. Drive significant top line revenue growth with great margins and excellent bottom line performance (of Wolfspeed).
Cree used one word to describe its future in LED and lighting: focus.
“It’s all going to be about focus,” Lowe said about the LED business. “Incredible brand, great channel, great amount of intellectual property. Take those capabilities and focus them on areas where we can create more value.” Lowe added high power has been encroached by mid-power, but that hasn’t worked for Cree so far. So it will focus on areas that will create more value creation.
Dave Emerson, Executive Vice-President and General Manager of the Cree LED division, added to that idea. He said the Cree plan is to grow business from $550 million today to $793 million in 2022, and expand gross margins from 21% to 33%.
LED will also build on a growing automotive lighting industry. “All of our factories are qualified to make auto lighting. And more products coming out over the next year for automotive. We see it growing into a $100 million business for Cree.”
Craig Atwater, Senior Vice-President and General Manager of Cree’s lighting division, also commented on the need for focus.
“We have to fix the business.” With growth has brought challenger, and we are getting back to fundamentals. Focus on the channel and improving our position with key partners,” Atwater said.
Atwater said margins today for Cree’s lighting division are around 28%. He is targeting to get them to 33% by 2022, and he says he is seeing progress already that is moving Cree in that direction.
Atwater concluded by saying he is going to focus on strengthening the channel for Cree lighting. “We are focused on driving stronger relationships with our agents, and making it easier to get our products specified,” Atwater said. “We are focused on driving growth programs through channel partners. We are focused on service enhancements and we are addressing long lead times. Over the last 12 months we have made some good progress. Feedback is we are going in the right direction.”
Atwater also said Cree will go back to its core strength. “Ware going to get back to what made us great. We are going to get back to focusing on new products.”
Tagged with Craig Atwater, Cree, Gregg Lowe, lightED