DURHAM -- Cree Research's silicon-carbide wafers received a vote of confidence from industrial giant Asea Brown Boveri, which has agreed to buy $2.4 million in wafers through the end of the year.

The deal, Cree's largest wafer contract, provides further validation of the wafers' promise -- and could be a sign that Asea Brown is close to launching a semiconductor based on silicon carbide, said Herbert Jackson, an analyst with Renaissance Research Group in Richmond, Va.

Several giant companies, including Motorola, Honeywell, Westinghouse Electric and Philips Electronics, have been developing silicon-carbide-based transistors and chips. Silicon-carbide wafers operate at higher temperatures and higher voltages than the silicon-only wafers used for transistors and computer chips. That makes silicon-carbide wafers ideal for electric motor controls and devices in cars, wireless communications and space and military equipment.

Cree, based in Durham, is best-known for its blue light-emitting diodes used as indicator lights and in electronic signs, and for being a leading participant in an international race to develop a blue laser that would allow more information to be put onto a computer disk. Both products are silicon-carbide-based.

Asea Brown's wafer contract "is more impressive than anything Cree could say about this technology," said Chuck Swoboda, Cree's chief operating officer.

Asea Brown, a conglomerate whose products include a wide range of industrial machinery and power-plant equipment, has purchased Cree's wafers for several years, but the new contract establishes a long-term relationship and will help smooth Cree's revenue stream, Swoboda said.

Cree is the only company capable of producing commercial quantities of silicon-carbide wafers, although the market is potentially so large that competition is inevitable, Jackson said.

Cree's revenue from silicon-carbide sales has been running in excess of $2 million per quarter, said Jackson, who noted that the market for silicon-carbide wafers ultimately could exceed $2 billion.

"If they [Cree] share the market with two or three players, so be it," Jackson said. "It's huge."

Jackson calls silicon-carbide-based semiconductors the Humvee of semiconductors.

"It's a more robust semiconductor material that can handle a lot more power," he said.



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