|II-VI model is very different. They will sell at all levels of supply chain. Wafer, chip, module. Regularly state their goal is to provide competitors a low enough price that they don't even try to develop their own capabilities. If Cree isn't interested they will take it.|
Every single customer of Cree wants a viable second supplier. II-VI will have a fairly easy path as a merchant supplier if they can bring 200mm wafers to market in volume with decent yields.
The question for Cree is whether they can establish themselves as a first tier component/module suppliers to the auto companies. I think that a vertically integrated supplier is more likely to be a defensible long-term business model than remaining a merchant supplier of wafers. This is obviously going to cause friction with wafer customers but they will likely be forced to deal with Cree through the next 3-5 years.
If they execute, the transition to 200mm will give Cree an enormous advantage. They should use it to increase their odds of successfully becoming a first tier component supplier.