Cree is restructuring its LED Products business, saying that it’s due in part to “recent LED market trends that have resulted in higher LED average selling price erosion than previously forecast and the continued under-utilization of Cree’s LED factory.”
Cree has decided to restructure its LED Products business to reduce excess capacity and overhead to improve its cost structure moving forward. Additionally, the company is increasing LED reserves to reflect the more aggressive pricing environment experienced in the current quarter, and to factor in a more conservative pricing outlook for fiscal year 2016.
The restructuring charges are targeted to be about $85 million.
Lighting Products revenue is targeted to increase slightly sequentially, as strong growth in commercial lighting is expected to more than offset a greater-than-targeted seasonal slowdown in consumer bulb sales.