Cree Acquires Infineon RF Power Business

DURHAM, N.C. & MUNICH & MORGAN HILL, Calif.–(BUSINESS WIRE)–Cree, Inc. (NASDAQ: CREE) has acquired assets of Infineon Technologies
AG (FSE: IFX)(OTCQX: IFNNY) Radio Frequency (RF) Power Business for
approximately € 345 million. The transaction expands the Cree Wolfspeed
business unit’s wireless market opportunity. Infineon continues to drive
key growth areas such as electro-mobility, autonomous driving,
renewables and technologies for a connected world. The transaction has
closed and is effective today.

“The acquisition strengthens Wolfspeed’s leadership position in RF
GaN-on-SiC technologies, as well as provides access to additional
markets, customers and packaging expertise,” said Cree CEO Gregg Lowe.
“This is a key element of Cree’s growth strategy and positions Wolfspeed
to enable faster 4G networks and the revolutionary transition to 5G.”

“Cree is a strong new owner for this portion of our RF business and has
an excellent reputation in the industry,” said Reinhard Ploss, CEO of
Infineon. “We are excited about the business rationale and the prospects
for the combined businesses. At the same time, we will be able to focus
our resources more effectively on Infineon’s strategic growth areas and
will retain a strong technology portfolio for the wireless market.”

Infineon and Cree have a long-standing history of technology leadership,
collaboration and shared business interests. The acquired Infineon RF
Power team and capabilities will complement Wolfspeed’s existing
offerings and expertise with additional technology, design, packaging,
manufacturing, and customer support. This business holds a leading
market position offering transistors and MMICs (Monolithic Microwave
Integrated Circuits) for wireless infrastructure radio frequency power
amplifiers based on both LDMOS and Gallium Nitride on Silicon Carbide
(GaN-on-SiC) technologies. The transaction includes:

• The main facility in Morgan Hill (CA) which includes packaging and
  test operations for LDMOS and GaN-on-SiC;
• Well-established customer relationships with leading manufacturers of
  wireless infrastructure equipment, including field support personnel
  on site;
• Approximately 260 employees in the US locations, Morgan Hill and
  Chandler (AZ), as well as in Finland, Sweden, China and South Korea;
  and
• A transition service agreement to ensure business continuity and a
  smooth transition under which Infineon will perform substantially all
  business operations for approximately the next 90 days.

Infineon will support the transaction with a long-term supply agreement
for LDMOS wafers and related components out of its fab in Regensburg,
Germany, and will also supply assembly and test services out of its
facility in Melaka, Malaysia.

“We are looking forward to combining our strengths with Cree,” said
Gerhard Wolf, Vice President and General Manager, RF Power Products at
Infineon. “With our highly skilled and dedicated team, advanced
technologies and commitment to business excellence, we look forward to
serving our customers seamlessly as the 5G mobile standard ramps up.”

Background of the transaction

The transaction comprises Infineon’s RF Power operations for wireless
infrastructure in Morgan Hill (CA) and Chandler (AZ) in the U.S., as
well as locations in China, Sweden, Finland and Korea. The
state-of-the-art backend manufacturing in Morgan Hill, as well as a
leading intellectual property (IP) and technology portfolio are also
part of the transaction. The transaction does not include the Infineon
Chip Card & Security (CCS) operations in Morgan Hill that will remain at
the site and continue to operate as part of Infineon.

Cree funded the Euro 345 million from cash and borrowings on its
revolving line of credit. The Infineon RF Power business will become
part of Cree’s Wolfspeed operating segment and is targeted to increase
annual revenues by approximately $115 million in the first twelve months
post acquisition. Additionally, the acquisition is targeted to be
accretive to Cree’s non-GAAP earnings per share in its first full
quarter of operations with Cree (which will be Cree’s fiscal fourth
quarter ending June 24, 2018). Targeted non-GAAP earnings per share
exclude expenses related to the amortization of acquired intangibles,
stock based compensation expense and one-time acquisition related
expenses.

Cree Conference Call

Cree will host a conference call at 4:30 p.m. Eastern time today to
discuss this announcement. The conference call will be available to the
public through a live audio web broadcast via the internet. For webcast
details, visit Cree's website at investor.cree.com/events.cfm.

In connection with the transaction, Wells Fargo Securities, LLC served
as financial advisor to Cree and BofA Merrill Lynch to Infineon.

About Cree, Inc:

Cree is an innovator of Wolfspeed™ power and radio frequency (RF)
semiconductors, lighting class LEDs and lighting products. Cree’s
product families include SiC materials, power-switching devices and RF
devices targeted for applications such as electric vehicles, fast
charging, invertors, power supplies, telecom and mil/areo. Cree’s LED
product families include blue and green LED chips, high-brightness LEDs
and lighting-class power LEDs targeted for indoor and outdoor lighting,
video displays, transportation and electronic signs and signals. Cree’s
LED lighting systems and lamps serve indoor and outdoor applications.

For additional product and Company information, please refer to www.cree.com.

About Infineon’s RF Power operations for wireless infrastructure

Infineon has a leading market position in creating RF Power products.
The product focus is on RF discrete Transistors and MMICs for Power
Amplifiers (RF PAs) for wireless infrastructure using LDMOS and GaN-on
SiC technologies.

About Infineon

Infineon Technologies AG is a world leader in semiconductor solutions
that make life easier, safer and greener. Microelectronics from Infineon
is the key to a better future. In the 2017 fiscal year (ending 30
September), the Company reported sales of around €7.1 billion with about
37,500 employees worldwide. Infineon is listed on the Frankfurt Stock
Exchange (ticker symbol: IFX) and in the USA on the over-the-counter
market OTCQX International Premier (ticker symbol: IFNNY).

Further information is available at www.infineon.com

This press release is available online at www.infineon.com/press

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Forward Looking Statements

This press release contains forward-looking statements involving risks
and uncertainties, both known and unknown, that may cause Cree’s actual
results to differ materially from those indicated in the forward-looking
statements. Forward-looking statements by their nature address matters
that are, to different degrees, uncertain, such as statements about the
anticipated benefits of the transaction, including future financial and
operating results. Actual results, including with respect to our targets
and prospects, could differ materially due to a number of factors,
including the possibility that anticipated benefits of the proposed
transaction will not be realized; the risk that we may not obtain
sufficient orders to achieve our targeted revenues; price competition in
key markets; the risk that our results will suffer if we are unable to
balance fluctuations in customer demand and capacity; the risk that we
are not able to enter into contractual arrangements with the customers
of the acquired business; risks associated with acquisitions generally;
the risk that we are not able to develop and expand customer bases and
accurately anticipate demand from end customers, which can result in
increased inventory and reduced orders as we experience wide
fluctuations in supply and demand; our ability to lower costs; product
mix; risks associated with our ability to complete development and
commercialization of products under development; risks associated with
the ramp-up of production of new products and our entry into new
business channels; the rapid development of new technology and competing
products that may impair demand or render our products obsolete; the
potential lack of customer acceptance for our products; and other
factors discussed in our filings with the Securities and Exchange
Commission (SEC), including our report on Form 10-K for the fiscal year
ended June 25, 2017, and subsequent reports filed with the SEC. These
forward-looking statements represent Cree's judgment as of the date of
this release. Except as required under the U.S. federal securities laws
and the rules and regulations of the SEC, Cree disclaims any intent or
obligation to update any forward-looking statements after the date of
this release, whether as a result of new information, future events,
developments, changes in assumptions or otherwise.

Cree® is a registered trademark and Wolfspeed™ is
a trademark of Cree, Inc.

Contacts

Cree, Inc.
Claire Simmons, 919-407-7844
Corporate Marketing
[email protected]
or
Infineon
Technologies AG
Bernd Hops, +49 89 234 23888
[email protected]
or
Infineon
Technologies Americas Corp.
Sian Cummings, +1-310-252-7148
[email protected]