As part of the agreement, Cree will invest approximately $83 million to purchase 83 million Lextar shares at a price of NT$30 per share. Lextar and Cree will also enter into a long-term LED chip supply agreement, as well as an agreement for certain Cree LED chip and component intellectual property. Upon closing of the investment, Cree will own approximately 13% of Lextar, becoming Lextar’s strategic customer in lighting market.

“Lextar has established a strong technology position and customer base in the mid- and low-power backlighting and lighting LED segments, while Cree has had outstanding performance in the high-power LED component and lighting markets,” said Dr. David Su, Chairman and CEO of Lextar.

“We are very excited about this new cooperation with Cree. We strongly believe this new collaboration will increase the competitiveness of our products and technology, enabling both companies continued growth in the LED lighting market. Furthermore, the cross license of LED chip and component intellectual property will afford both Cree and Lextar the benefits from our product and technology development, thereby strengthening our mutual competitiveness in the global LED industry.”

“We are excited to be strengthening our relationship with Lextar to enable growth in LEDs and Lighting,” stated Chuck Swoboda, Cree Chairman and CEO.

“Working with Lextar to supply high quality mid-power LED chips enables Cree to focus its resources on the high performance, high-power LED chips that differentiate Cree LEDs in the market. This approach provides the operational and financial flexibility to help Cree achieve the best return on our people and invested capital.”

The agreement has been approved by the boards of directors of both companies, and is targeted to close by the end of fiscal year 2014, subject to the approval of Lextar’s shareholders and the Taiwan Investment Committee, and other customary closing conditions.