Cree Cuts Prices on LED Streetlights (CREE, AIXG, VECO, LEDS, RBCN)

LED lighting maker Cree Inc. (NASDAQ: CREE) has succeeded in making an LED streetlight that sells for less than $200 when purchased in volume. Provided the company can actually make a profit on the light, we could be seeing the start of a price war in LEDs reminiscent of the price battles we’ve already seen in solar PV panels.

Shares in Cree and competitors Aixtron SE (NASDAQ: AIXG), Veeco Instruments Inc. (NASDAQ: VECO), SemiLEDS Corp. (NASDAQ: LEDS), and Rubicon Technology Inc. (NASDAQ: RBCN) have been making a comeback since the beginning of the year, though for the past 12 months shares are down anywhere from -35% (Cree) to -71% (SemiLEDS). Since the beginning of the year, however, Cree, Veeco, and Aixtron are all up around 30%.

A report in The Wall Street Journal notes that 25% of all outdoor lighting in the US is streetlighting and that the market for LED streetlight should blossom at the sub-$200 price point. Both Aixtron and Veeco were upgraded to ‘buy’ by one analyst last month, and most of these companies expect the first quarter of this year to be their toughest.

Cree claims that its latest technology, which uses fewer and cheaper LEDs per light has led to the lower pricing. Whether or not cash-strapped municipalities will buy even cheap lighting is the last remaining question.

Paul Ausick