Cree Inc. at Thomas Weisel Partners 2007 Technology Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Jason Pflaum - Thomas Weisel Partners - Analyst : I'll kick it off with a couple of questions and then hopefully get some participation from the audience. Maybe to start off you could talk a little bit more about the handset business. It's been somewhat of a challenging space here recently. Can you just give us an update as far as some of the dynamics going on in that market today?

Question: Jason Pflaum - Thomas Weisel Partners - Analyst : How are you impacted by a general market shift towards lower end handsets? Does that impact the number of LEDs per device? Maybe you can talk generally about that trend and how it's impacting you guys as well.

Question: Jason Pflaum - Thomas Weisel Partners - Analyst : Can you talk a little bit about the gross margin guidance, 34% I believe, which I think if you look historically, that's towards the lower end of where you've been. If you look out, maybe you can talk about the major levers you have to boost gross margin and what do you think the longer-term sustainable level should be?

Question: Jason Pflaum - Thomas Weisel Partners - Analyst : Where, roughly, is utilization today?

Question: Jason Pflaum - Thomas Weisel Partners - Analyst : You mentioned that you're ramping the 4-inch wafers. What kind of cost benefit will that drive and kind of the timing of that rollout? Obviously you need certain volumes before you get those benefits, but maybe you can talk about how that plays into the model?

Question: Jason Pflaum - Thomas Weisel Partners - Analyst : And just for comparison, are the competitors today mostly on 3-inch?

Question: Jason Pflaum - Thomas Weisel Partners - Analyst : Maybe I'll sneak one last question in. If you look at 2007, it sounds like some of the TVs of larger screen size applications may be a little bit further out, maybe early '08. What do you see as the biggest incremental new drivers in 2007, outside of the traditional handset space?

Question: Jason Pflaum - Thomas Weisel Partners - Analyst : Great. I think we're out of time. But John, we really appreciate it. Thank you.