DURHAM, N.C. 10 August 2005. Cree Inc. has won a $19.7 million Air Force contract to develop semiconductor chips for advanced military radar and commercial purposes.
Under terms of the five-year deal, Cree and the military will share the costs of developing the technology. Cree will contribute $4.7 million and get $15 million in revenue from the government, said John Palmour, Cree's executive vice president for advanced devices.
Cree, which employs about 1,300 in the Triangle, grows silicon carbide wafers in a secret process. Once the wafers are formed, Cree layers other compounds to get features needed for its chips.
The military contract aims to increase the size of the initial wafers from 3 inches in diameter to 4 inches. It's a change that will increase the number of chips available and lower costs.
That matters because the military wants "to buy a radar with a lot more capability without a lot more money," Palmour said.
With Cree's chips, defense contractors such as Boeing, Lockheed Martin and Raytheon could build more powerful radars capable of taking in more information -- the equivalent of upgrading from a dial-up Internet connection to cable-modem broadband.
Most people probably are familiar with radar in movies or weather maps. A spinning line swings around and shows moving objects inching closer with each pass. But if an object is flying at high speeds, the first time it is seen on radar could be too late. By the time an older radar system makes a second pass, the object could be too close for a significant response.
The military wants radar that can monitor all directions simultaneously, see farther and give more accurate information.
Cree is the only supplier of the chip that could increase power and signal range, Palmour said. It has been selling a version of it to defense contractors, stemming from earlier work for the Navy.
In the commercial sector, the chip also is used for applications such as WiMax, an emerging wireless Internet technology with a longer range than Wi-Fi services now found at coffee shops and in homes. WiMax can broadcast an Internet service over a few miles, instead of a few hundred feet.
This Air Force contract follows a joint contract awarded in April to Raytheon and Cree for work on similar devices using different technology. That three-year agreement could generate as much as $24.5 million for Cree, if all options are exercised.
The deal is among Cree's largest-ever defense contracts, and expands on work it has done for the Navy. Cree is far less dependent on government contracts than in its formative years. The bulk of sales are for light-emitting diodes -- LEDs -- that the company manufactures in Durham to illuminate mobile-phone keypads, traffic lights and auto dashboards.
Even so, the Air Force contract could enhance other business lines � it could lead to improved radar that could detect threats more quickly. "This is a great program for Cree because it gets the military what it wants, but also helps the commercial business," he said. For more information, see www.cree.com.
By Jonathan B. Cox
The News & Observer, Raleigh, N.C.
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