Back then, it was extremely hard to get your hands on one; now, Cree LEDs have changed hands again.

Industry Insights

From Taiwanese packaging plants to LEDVANCE acquisition negotiations, I’ve encountered Cree in various capacities.

By Lin Jiliang

On that business trip, I received a call from Osram at the airport. I was representing MLS in the LEDVANCE acquisition, and the call concerned Cree’s patent licensing.

After Osram spun off its general lighting business, how could the new company continue to use licenses originally signed with Cree? Before that, when dealing with Cree, my primary concern was always when the chips would be delivered.

On November 4, 2026, Penguin Solutions announced it had signed an agreement with Transom Capital Group to sell Cree LED in an all-cash transaction. The deal is expected to close in the first quarter of 2027.〔1〕

01 Demand for Currency-Checking Lamps Suddenly Soared

Around the year 2000, I worked at Taiwan’s LED packaging plant Dongbei Optoelectronics. At that time, counterfeit currency was rampant, and demand for UV currency-checking lamps surged. It was during this period that I first came into contact with Cree.

Anyone who has done procurement probably remembers the feeling of stockouts. Normally, you can negotiate prices and payment terms, but when goods are urgently needed, you must first hear from suppliers about their delivery dates. Only those able to deliver have bargaining power. That was my earliest impression of Cree.

02 A Few Years Later, Goods Reached My Hands

Around 2005, I started my own business and resold several batches of Cree’s blue and green LED chips. In the markets I served at the time, these two types of chips were in short supply. Back when I worked at the packaging plant, I was the buyer seeking supplies. In those transactions, I found myself on the supplier side.

Cree’s announcements from that era included a much larger order. In 2003, Osram Opto Semiconductors signed a contract with Cree to purchase at least 500 million LED chips over 21 months.〔2〕

Cree began with silicon carbide research at North Carolina State University and brought its silicon carbide blue LED to market in 1989. After launching the XLamp XR-E high-power lighting-grade package in 2006, its products could directly enter luminaire manufacturers’ selection lists.〔3、4〕

03 One Light Bulb Sold for $9.97

Between 2011 and 2014, I encountered some light bulbs and luminaires developed through Cree’s collaborations with supply chain partners. When evaluating new products, I would use them as benchmarks. Anyone who has made light bulbs knows how difficult it is to pack optics, drivers, and thermal management into a familiar consumer form factor while keeping costs at a level acceptable to retail shelves.

In 2011, Cree acquired Ruud Lighting. Two years later, it launched a warm-white bulb at Home Depot in the U.S., 6W, 450 lumens, $9.97, intended to replace 40W incandescent bulbs in homes. Competitors seeing this price tag understood what they were up against.〔5、6〕

At the time, industry peers often mentioned another figure: 60 lm/W. Cree’s U.S. patents US8596819B2 and US8628214B2 both contained claims requiring a luminous efficacy of at least 60 lm/W based on input electrical power. The first patent’s claim 1 was very broad, while the second’s claim 1 further limited solid-state emitters connected in multiple series strings. When determining whether a particular lamp required a license, one had to compare the product item by item against locally valid patent claims and consider the scope of existing authorizations.〔7、8〕

These two patents later appeared in the U.S. International Trade Commission’s Investigation No. 337-TA-947. After Cree reached settlement and licensing agreements with Feit Electric and other parties, the commission terminated the investigation in 2017.〔9、10〕

Over the years, I also interacted extensively with several Cree executives, including then-Chairman and CEO Chuck Swoboda, as well as Drs. Tang Guoqing and Shao Jiaping, who had previously worked in the Chinese market.〔11、12〕

04 The Company Split Off—How Would Licenses Be Handled?

From 2015 to 2017, I represented MLS in the acquisition of LEDVANCE. Osram and Cree had already signed cross-licensing agreements back in 2011, covering LED chips, luminaires, and electronic controls. Following the spin-off of the general lighting business, it was necessary to clarify which patents the new company could use and under what conditions.〔13、14〕

During that phone call at the airport, I spoke with then-Osram CEO Olaf Berlien and Thomas Fruth, who was involved in the transaction. There were still disagreements among the parties regarding the terms of the new license, so we discussed where adjustments could still be made. Eventually, the parties compromised on certain conditions and reached a licensing agreement.

During M&A, product lines and (Sales) channels can be listed on the asset inventory. After taking over, it is essential to clarify item by item which licenses existing products depend on in order to continue production and sales under appropriate conditions.

The LEDVANCE acquisition was completed on March 3, 2017. Cree Lighting’s license list also recorded Cree’s cross-licensing agreement with LEDVANCE for LED bulbs and luminaires on the same day.〔14、10〕

05 Will Next-Generation Luminaires Still Use Cree?

When discussing Cree today, we must first distinguish which segment was spun off back then.

Cree Lighting

The finished-products business for bulbs and luminaires was sold to IDEAL Industries in 2019.〔15〕

Cree LED

The chip and packaging business was contracted in 2020 and transferred to SMART Global Holdings in 2021; the latter renamed itself Penguin Solutions in 2024. This division was sold to Transom in the current transaction.〔16、17、18、1〕

Wolfspeed

The original Cree, Inc. adopted this name in 2021, focusing on silicon carbide materials and power devices.〔19〕

In Penguin’s fiscal year 2026, the department housing Cree LED recorded US$249 million in net sales and approximately US$17.71 million in segment operating profit. According to Penguin’s reaffirmed FY2027 outlook at the time of announcing the transaction, the group’s median net sales guidance stands at US$2.43 billion, with roughly 10% coming from Cree LED’s projected full-year contribution.〔20、21、22〕

Penguin aims to concentrate investments on AI data center infrastructure and memory businesses. Transom stated that after closing, it plans to allow Cree LED to operate independently.〔22〕

For luminaire manufacturers, changing owners still means returning to everyday concerns. Can sample data translate into actual production capacity? For the same part number, will color points vary in the next batch? If engineers change drivers or modify thermal management, is there someone to troubleshoot issues together?

I will keep an eye on the next round of luminaire manufacturers making selections. Will they still list Cree part numbers in their new product bill of materials?