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Mike McDevitt -- Chief Financial Officer

Thank you, Gregg. I'll be providing commentary on our financial statements on the non-GAAP basis, which is consistent with how management measures Cree's results internally. However, non-GAAP results are not in accordance with GAAP and may not be comparable to non-GAAP information provided by other companies. Non-GAAP information should be considered a supplement to and not a substitute for financial statements prepared in accordance with GAAP. A reconciliation of the non-GAAP information to the corresponding GAAP measures for all periods mentioned on this call is posted on our website or provided in our press release along with a historical summary of other key metrics.

For fiscal 2018, revenue was 1.5 billion and non-GAAP earnings were 19 million or $0.19 per share. Non-GAAP earnings were above first call consensus estimates due to our strong Q4 performance. Non-GAAP earnings excluded 300 million of expense net of tax or $3.00 per share from the lighting segment goodwill impairment charge in Q3, non-cash stock-based compensation acquired intangibles amortization, the Infineon RF Power acquisition transaction, and integration cost and our lighting segment rightsizing cost, and other items that are outlined in our earnings press release.

Fiscal 2018 revenue and non-GAAP gross profit for our reportable segments were as follows. Wolfspeed revenue grew 49% year-over-year to 329 million and gross profit was 158 million for 48.2% gross margin, which is a 140 basis point increase year-over-year. Organic growth was 35% year-over-year with strong growth in materials and devices. The additional growth was related to the RF Power acquisition, which is included in our segment results for the last four months of the year. Gross profit grew in all product lines due to higher overall sales and gross margins increased due primarily to changes in product mix and successfully managing our factory execution while we were significantly increasing our production capacity.

LED products revenue grew 8% year-over-year to 596 million and gross profit was 158 million for a 26.5% gross margin, which is 110 basis point decreases year-over-year. Revenue increased due to strong demand in our high-powered general lighting, video screen, and specialty lighting applications, along with the addition of the mid-power product JV sales. Gross profit increased year-over-year due to higher sales, while gross margin was lower primarily due to shift in product mix, including the mid-power JV sales, which generally have lower gross margin. Lighting products revenue declined 19% to 569 million and gross profit was $109 million for a 19.2% gross margin, which is an 880 basis point decrease year-over-year.

Lighting revenue was down due to softness in the North America commercial lighting market. The impact of prior product quality issues, the fight settlement received in fiscal 2017 that did not reoccur in fiscal 2018, and lower consumer product sales as we shifted emphasis to the premium lamp category. Gross profit and margins were down primarily due to non-recurrence of the fight settlement, higher warranty-related cost, and lower sales reducing factory utilization. Non-allocated cost totaled 5 million for fiscal 2018 and are included to reconcile to 420 million non-GAAP gross profit for a 28.1% gross margin. For the fourth quarter of fiscal 2018, revenue increased 15% sequentially and increased 14% year-over-year to 409 million, which was at the upper end of our targeted range and above first call consensus.

Non-GAAP earnings were 12 million for $0.11 per share, which exceeded our targeted range and first call consensus. Our non-GAAP earnings exclude 45 million of expense net of tax or $0.44 per diluted share from non-cash stock-based compensation, acquired intangibles amortization, the RF Power acquisition transaction and integration cost, and lighting rightsizing cost and other items. Fiscal 2018 fourth-quarter revenue and non-GAAP gross profit for our reportable segments were as follows: Wolfspeed revenue grew 34% sequentially and 81% year-over-year to 110 million and was above our targeted range. We continue to have strong organic growth, in addition, the RF Power business results for the full quarter. Gross profit grew 34% sequentially and 90% year-over-year to 53 million for a 47.9% gross margin, which was above our target range. The team continued to do a great job executing in the factory, which enabled the gross margin expansion.

Additionally, the acquired business results exceeded our targets and were slightly accreted to Q4 non-GAAP earnings. LED products revenue increased 9% sequentially and year-over-year to 156 million, which was at the upper end of our targeted range due to strong demand and high-powered general lighting, video screen, and specialty lighting applications. Gross profit was up 13% sequentially and up 15% year-over-year to 43 million for a 27.4% gross margin, which was above our target range. The gross profit margin increase was due primarily to strong demand for our products, improved factory execution, and a more favorable product mix. Lighting products revenue was up 10% sequentially 143 million, which was in line with our targeted range.

Gross profit increased 17% sequentially to 29 million for a 23.3% gross margin, a 120 basis point sequential increase. The gross profit and margin increases were primarily due to lower warranty related cost and incremental factory improvements. Non-allocated cost totaled 2 million for the fourth quarter of fiscal 2018 and are included to reconcile to our 123 million non-GAAP gross profit for a 30% gross margin that was at the upper end of our 29.7 plus or minus target. Non-GAAP operating expenses for Q4 were 108 million and slightly lower than our target due primarily to earlier realization on some of the targeted lighting right-sizing savings and lower IP litigation spending. Over time, we target reinvesting these lighting savings back into our Wolfspeed business to support its longer-range targeted growth.

Our non-GAAP operating income was 15 million, which exceeded the upper end of our target in first call consensus. Our non-GAAP tax rate was 8%, which was slightly higher than targeted due to the greater income. We ended the year with 387 million in cash and investments and had 292 million borrowed on our line of credit. During the fourth quarter, cash from operations were 42 million and capital expenditures were 59 million, which resulted in negative free cash flow of 17 million. For the year, we generated 167 million of cash from operations and spent 195 million per capital expenditures, which yielded negative free cash flow of 28 million, which was in line with our targeted range.

Additionally, we spent 429 million to acquire certain assets of the Infineon RF Power business and we received 93 million from the exercise of employee stock options during the year. Our capital allocation priorities remain focused on expanding capacity in our Wolfspeed business. For fiscal 2019, we target capital spending of 220 million plus or minus primarily driven by expanding Wolfspeed's production capacity to support forecasted long-term customer demand. Overall, we target fiscal 2019 free cash flow to be a negative 10 million plus or minus. The negative free cash flow is due to the timing of the Wolfspeed capacity investments to alleviate current constraints and support the substantial growth opportunity forecasted over the next several years.

We are slightly ahead of our target to double wafer capacity for external material customers and double our power device capacity by the end of calendar 2018 from where we exited fiscal 2017. As we continue to ramp this new capacity, we could have some variability in our initial production yields and factory utilization that may reduce our near-term Wolfspeed gross margins. Day sales outstanding decreased two days from March to 34 days at the end of June. Inventory days on hand decreased to 91 days at the end of June as we reduced inventory balances 14 million to 296 million. Five million of this decline was related to the amortization of the basis step up on the acquired RF Power inventory during Q4. With respect to the tariffs that went into effect on July 6th, the team has worked diligently to minimize the impact on Cree.

As a result, we target the July 6th tariffs will reduce Q1 earnings by approximately $0.02 per diluted share and will cost $0.03 per diluted share plus or minus per quarter starting in Q2. Any potential impact of any tariffs that go into effect on August 23rd or later are not included in our Q1 targets. However, if the upcoming August 23rd tariffs are applied the same way as the July 6th tariffs, we would anticipate the impact to be nominal. We are evaluating ways to further mitigate the impact of the July 6th tariffs and the upcoming August 23rd tariffs as well as any additional tariffs that may be enacted in the future.

We target Q1 company revenue in a range of 395 million to 415 million based on the following segment trends: Wolfspeed revenue up 13% plus or minus sequentially based on solid growth across all product lines, LED revenue down 6% plus or minus sequentially due to shifting some of the fungible capacity to Wolfspeed, and normal European market seasonality and order delays from certain customers as the industry evaluates how best to navigate the US and China tariffs. Lighting revenue down 6% plus or minus sequentially as we focus on increasing gross margins by improving the mix in our business.

Regarding ZTE, while we're encouraged that the restriction on selling to ZTE was lifted in July, we target just a small amount of revenue from them in Q1 as they rebuild their supply chain. The business could ramp steadily beyond Q1 but is too soon to say when it would be back to prior levels. We target Cree's consolidated Q1 non-GAAP gross margins to be 30.6% plus or minus net of the targeted 50 basis point reduction from the tariffs. The sequential improvement is primarily due to Wolfspeed representing a higher portion of the total revenue mix, which is partially offset by the impact of the July 6 tariffs.

Sequentially, Wolfspeed margins are targeted to be slightly lower due to mix. LED margins are targeted lower due to the tariffs but would be similar excluding tariffs. And we target incremental lighting margin improvement. We're targeting Q1 non-GAAP operating expense to be similar to Q4 plus or minus. Our operating expense target includes incremental spend related to semiconductor R&D projects, higher IP litigation cost, and CFO transition cost, which are offset by the targeted lighting right size initiatives savings. We target Q1 non-GAAP operating profit to be between 13 million to 18 million. Q1 invested cash and revolver barrings are targeted to be at similar levels to where we exited Q4 and as a result, we target net interest to be an expense of 1.5 million plus or minus.

We target a 17% Q1 in fiscal 2019 non-GAAP effective tax rate and Q1 non-GAAP income to be between 10 million to 14 million or $0.10 to $0.14 per diluted share. Our non-GAAP EPS target already includes a $0.02 decrease from the impact of the tariffs that went into effect on July 6th. Our non-GAAP EPS target excludes acquired and tangibles amortization, non-cash stock-based compensation, lighting restructuring charges, and other items. Our GAAP and non-GAAP targets do not include the impact of any changes to the fair value of our Lextar investment. Our Q1 targets are based on several factors that could vary, including overall demand, product mix, factory execution, and competitive environment. I will now turn the discussion back to Gregg.

Gregg Lowe -- Chief Executive Officer

Thanks, Mike. In addition to the strong financial results we delivered for the quarter, excellent progress was made in other areas. We completed the successful integration of the Infineon RF Power business and delivered accretive non-GAAP results for the quarter. That was less than three months after closing the acquisition, a remarkable timeline for such a large integration that comprised of 12 sites and roughly 260 employees around the world. Turning to the businesses, Wolfspeed, which is our primary growth driver, continued to deliver on its objective of achieving high growth and strong gross margins.

Q4 revenues increased 81% year-on-year, which included the first full quarter of the Infineon RF Power business with organic revenues increasing around 40% year-on-year. Gross margins increased 240 basis points year-on-year as we successfully managed the normal challenges associated with ramping new capacity and integrating the acquired business. With the additional growth targeted for Q1, Wolfspeed's annual revenue run rate is now half a billion dollars. In early June, I had the pleasure of attending PCIM, the power electronics trade show, and was struck by the number of companies promoting silicon carbide products. Hardly a booth was present that didn't have something pertaining to silicon carbide on display.

Based on what I saw by walking the floor and meeting with customers, I believe the transition to silicon carbide continues to accelerate in the power electronics market, and Cree has been a pioneer and the leader in commercializing silicon carbide products. At the show, we introduced a third generation 1200 volt silicon carbide MOSFET family that will help foster the adoption of electric vehicles by delivering higher efficiency to increase the driving range and reduce system costs. We also recently announced the E-series, the first commercial family of silicon carbide MOSFETs and diodes to be automotive AECQ101 and PPAP capable. The roll-out of the E-series family establishes Wolfspeed as the first in the industry to launch a full suite of MOSFETs and diodes that are capable of withstanding high humidity environments while offering the reliability and system level value needed to drive the widespread adoption of silicon carbide among automakers for the next generation of EVs.

Given the enormous growth opportunity for silicon carbide and GaN RF over the next decade and beyond, we continue to expand capacity at a rapid pace to meet the growing demand. In fact, we're tracking slightly ahead of our goal of doubling capacity for power devices and external materials sales by the end of the Q2. Additionally, we aim to keep reducing the gap in costs compared to silicon by leveraging scale, executing engineering efforts to improve yield, and pushing the limits of material science to achieve the next breakthrough. We believe this combination of greater availability and lower cost will speed up and expand the adoption of silicon carbide and GaN RF technologies across a wide range of markets.

For LED products, the business is performing well against the objective of driving value through greater focus. Q4 revenues grew 9% to the highest level in almost four years, while gross margins improved 150 basis points year-on-year and 100 basis points quarter-on-quarter. Momentum is building in our focus areas like automotive lighting and application optimized solutions that are stickier and have an opportunity for us to create more value. The results should be a business that generates strong free cash flow through modest revenue growth, gross margin expansion, and lower capex.

Moving onto lighting, Q4 represented another step forward toward the objective of fixing the business. For the second quarter in a row, we improved gross margins by more than 100 basis points driven by better process controls and operational improvements. As a result of new product introductions, improved relationships with our channel partners, and continued progress on quality, we see continued gross margin improvement into Q1. As we recently announced, we're delighted that Neill Reynolds will be joining Cree as CFO on August 27th. Neill is an exceptional leader with vast experience within markets that Cree serves. We believe his semiconductor industry knowledge will help position Cree for continued success and support our growth plans.

I'd also like to thank Mike for his many years of hard work and dedication here at Cree. He's made substantial contributions to Cree over the past 16 years and we're grateful for his support during the transition. In summary, it's really exciting to see the results trending in the right direction. It's going to take a lot of work to reach our business model targeting 40% gross margin, 20% OpEx, and 20% operating margin, and there are sure to be some bumps along the way. That said, our recent results are indicative of what can be accomplished when the strategy is clear and all employees are pulling in the same direction. With that, I'd like to turn it back over to Liz so we can take any of the questions you might have.

Questions and Answers:

Operator

Ladies and gentlemen, if you'd like to ask a question at this time please press the * then the number 1 key on your touchtone telephone. In the interest of time, we ask that you limit yourself to one question and one follow-up question. Again, that's * then 1 if you'd like to ask a question. Our first question comes from the line of Hilary Cauley with JMP Securities. Your line is now open.

Hilary Cauley -- JMP Securities -- Analyst

Hi, thanks for taking my question. The first one was just kind of on the side of the LED and Wolfspeed being kind of under one umbrella now and if you guys could kind of outline further efficiencies we might see there or furthermore as Wolfspeed kind of picks up speed if we might see some of that capacity switch over to Wolf-side and away from the LED?

Gregg Lowe -- Chief Executive Officer

Certainly, having them both under the same umbrella is a huge benefit for us across multiple different areas. One is the manufacturing outsets are together under one leader, Rick McFarland is doing that. And we're able to now leverage things that we're learning in terms of yield improvement and LED that we can move into Wolfspeed and vice versa. There's already been a lot of really great work done there and I think Rick and the team have really just done a fabulous job of that. We've been increasing the capacity of the silicon carbide crystal growth in the materials business, that's been very, very helpful as well.

And then finally, there is some fungibility especially in both the materials and in the wafer fab between the LED business and Wolfspeed. And as we see the LED business transitioning some of its products to Sapphire, it gives us an opportunity to move that silicon carbide capability primarily to our power businesses. It's a good trade-off and it's a good situation to have. I think both businesses are working very closely together and I think you can continue to see these kinds of efforts in the future.

Hilary Cauley -- JMP Securities -- Analyst

Okay, great, and then just one on the lighting side. In terms of margins, do you expect it to kind of be the slow and steady improvement or is there possibly like a short-term target you might put out there as we make progress toward that longer-term gross margin?

Gregg Lowe -- Chief Executive Officer

I don't anticipate things turning overnight. We've had two quarters in a row of over 100 basis points improvement and I think it's that kind of zip code that I would have in mind. I think this business has a lot of improvement still ahead of it and I think we'll take it sort of three yards at a time.

Operator

Our next question comes from Jed Dorsheimer with Canaccord Genuity. Your line is now open.

Jed Dorscheimer -- Canaccord Genuity -- Analyst

Hi, thanks, and congrats on the quarter. First question, Gregg, is on the lighting business. Have you given an analysis or done an analysis, I should say, on the impact? Did you think that might be negatively having on the LED components? I think your predecessor didn't see a lot of risk around being competitive with your customers but that would seem that there might be some latent demand should that business -- if you were to wind down or divest of that business at some point.

Gregg Lowe -- Chief Executive Officer

I don't know how strong of an issue that is. Obviously, I don't know a lot of the history. I've met a number of our LED customers that have sort of competitive footprint with the lighting business. I don't think it's a loud and screaming kind of thing at this point. I think the focusing of the LED business in the four areas that we had outlined at our analyst day, I think is really an important kind of target for us and I think we're making really good progress there. I don't know how much of an impact that would've had but what I would tell you is it's not -- it doesn't really come up as a loud screaming type issue at this point with customers.

Jed Dorscheimer -- Canaccord Genuity -- Analyst

Okay. And then as my follow-up question, the way that I interpreted some of your descriptions on silicon carbide to the high-power market for EVs charging stations, bay stations, etcetera. They're very similar to the way that I heard manufacturers in the gallium arsenide space back in the early 2000s so I guess I'm dating myself here, but describe gallium arsenide for power amplifiers in cellphones while the holy grail was always to get to silicon as it didn't happen in the timeframe that anybody expected -- and gas is still around. Do you see this silicon carbide market in a similar way and are you trying to basically enable many more players to come into this market?

Gregg Lowe -- Chief Executive Officer

You know, I'm not an expert on the gallium arsenide side of things. What I would tell you is, the end market, the primary growth driver for our silicon carbide power business is the automotive market. And the automotive market is way different than the handset market in terms of reliability requirements, quality requirements, the heat dissipation that you have to handle, and all of this kind of stuff.

And there's just an inherent significant advantage that silicon carbide has in all of those areas in addition to the fact that it's -- you know, an electric vehicle will go further using silicon carbide than using silicon. So I think there's sort of some fundamental differences between the two. We're certainly driving the adoption of that. We're doing that through expanding our footprint, expanding our capacity, driving our costs down, and all of that. And I think it's a really good opportunity and I think that based on -- it's been, what? Almost a year that I've been here.

I think the interest and excitement in the market for silicon carbide has just simply grown since I've been here -- and I don't mean to say it that way. But my observation is the market over the last 12 months has certainly become more -- has adopted silicon carbide in a much more quick fashion. So it's an exciting time for us, I think the opportunity is fantastic, and we're trying to capture most of it that we can.

Operator

Our next question comes from Hank Elder with Goldman Sachs. Your line is now open.

Hank Elder -- Goldman Sachs -- Analyst

Hey, guys, this is Hank Elder on for Brian. You mentioned that the core Wolfspeed business is holding around 40% year-over-year growth. Is it the level that we should expect the segment -- the core Wolfspeed to do in fiscal '19 or as capacity comes online; moving through the rest of the calendar year, could that accelerate?

Gregg Lowe -- Chief Executive Officer

What I would tell you is, we're forecasting next quarter and we're forecasting some pretty decent growth, 13% sequentially for next quarter on the Wolfspeed business. We certainly have capacity coming online and as we had indicated, it's coming online slightly ahead of the original plan. We're gonna continue bringing capacity online next year and we're gonna be doing that through a couple of different mechanisms, one obviously is, we've got a capex spend which will be increasing capacity that's mostly targeted at the Wolfspeed business.

But the second thing that's really happening right now is, we've doubled the output of the capability of Wolfspeed, the manufacturing capability of Wolfspeed. And what that's doing is it's significantly increasing the learning we're getting in manufacturing, the learning cycles that we're getting in manufacturing, which is then being fed back into the manufacturing processes, which is increased yield. And so we're getting increasing yields off of existing capability and then we're increasing the number of machines that are producing the stuff so it's kind of a double effect.

I think our target is to drive the -- is to quadruple the size of the Wolfspeed business from fiscal '17, which was a little north of $200 million to around $850 million and I think we've got a good line of sight to do that. We're working really hard on that, that's gonna include manufacturing capacity, increases that I just talked about and the adoption that we had talked about earlier.

While I don't want to get into a quarter-by-quarter type forecasting thing, we're really excited about our position in the market, the scale we have, the kind of accelerated learning that we're getting from that scale, and quite frankly, the performance of the manufacturing organization and bringing this stuff up is simply unbelievable. We've got cranes all over the campus here bringing things in and these guys have really brought this technology up in a pretty clean fashion, it's amazing, actually.

Hank Elder -- Goldman Sachs -- Analyst

That's very helpful context. And then maybe switching gears quickly on the tariffs. From what you can tell, is this potentially a larger impact for your competitors? I guess given your US manufacturing could be a competitive benefit even though it's still a P&L headwind.

Gregg Lowe -- Chief Executive Officer

You know, I don't know. I guess what I would say is, we are the largest manufacturer US based in US manufacturing based producer of LEDs and that certainly helped us as we worked through the impact of the tariff. We're really focusing that business in the four key areas and I think to the extent that we're successful and as I mentioned in my prepared remarks, we've got really good indications that we are getting some good traction in those four areas. I think it'll help the business deliver to our objective of modest growth and incremental gross margin improvements and good free cash flow.

Operator

Our next question comes from Harsh Kumar with Piper Jaffray. Your line is now open.

Harsh Kumar -- Piper Jaffray -- Analyst

Hey, guys, this is Matt on for Harsh. My first question was, could you kind of walk us through an EPS bridge here into Q1? I think you previously talked about there being one cent dilutives from ZTE but now that ban's lifted and now we have a $0.02 impact from the tariffs and the Infineon's acquisition kind of being accretive. Could you kind of just maybe give us some more color about how we think about that and how we think about that moving into the rest of fiscal '19?

Mike McDevitt -- Chief Financial Officer

Well, I guess from a tariffs standpoint based on what we know today, and from my comments is that the thing that's kind of certain right now is what's the July 6th tariffs. So in Q2, Q3, Q4, we're targeting kind of a 3% EPS plus or minus from that tariff. On ZTE, like I said, in this Q1 it's a nominal amount. Don't have enough visibility right now as to how quickly that business could come back and what it would ramp to within the fiscal '19 from that standpoint and now we kind of look at the Infineon RF Power acquisition just as part of our overall Wolfspeed results, which were targeting the growth, 13% plus or minus quarter-over-quarter.

And as Gregg just mentioned, if you look at Wolfspeed's growth, if you think about that longer-term model growing to 850 million in kind of a path on that over the next couple years, is probably reasonable basis at this time.

Gregg Lowe -- Chief Executive Officer

And I'll just add a little bit of color on ZTE. Our teams have met with them a number of times since the ban was lifted. We've had excellent conversations with them. There's a lot of good discussion going on and ZTE is certainly quickly reengaging in the market. That all being said, the outfit has been -- ZTE has been basically shut off for several months. We're being a little bit cautious on the actual impact for this quarter.

We have a nominal amount of revenue anticipated for this quarter just simply thinking, gosh, it's gonna be hard to get the entire supply chain up and running so quickly. We'll see how it goes. The good news is that they're excited to reengage with us and I think from a future standpoint it's fine. What happens in the near-term I think is, it's probably gonna be a little tougher to ramp up than they would anticipate.

Harsh Kumar -- Piper Jaffray -- Analyst

Gotcha thanks. And then as a follow-up, just a question on -- as you add capacity in the Wolfspeed business, how hard is it to find people with the experience necessary with the Wolfspeed technology in order to fully ramp up the business as fast as you guys want given that everyone in the industry is kind of looking to add capacity? And is that something now that the manufacturing is all under one roof; is that something that can kind of be added internally from other segments of the business? Thanks.

Gregg Lowe -- Chief Executive Officer

Yes. So certainly yes on that latter one. As you can imagine, as we're ramping this capacity, there's a million things that you have to worry about and half of them go sideways at some point so there's the emergency call trying to get a team to go fix something. And I tell you, our team has done a fantastic job of just coalescing the resources and kind of walking into it with one badge of, yeah, I work in LED, or yeah, I work in Wolfspeed but we're gonna go solve this problem. They've done just a marvelous job on that. We're able to do some of that sourcing internally, if you will, I think that's a pretty good way of describing it.

Industrywide, I think there's obviously not a whole lot of knowledge about this technology and that's one of the advantages that we have, is that we have a lot of people that have a lot of capability here. And so, we're ramping up the capacity, it's coming online very nicely. The equipment is being assembled and built and coming online. And like I said, we knew we'd get some of this but we're really pleased with the rapid learning cycles that we're getting, the more learning cycles we're getting with the added capacity.

It's certainly a benefit we were thinking about but it's certainly come to fruition a lot faster than we anticipated. The fact that we're a lot bigger means we have a lot more data that says here are a couple of ways we can squeeze a few more wafers out or improve yield and so forth. And you know, that's basically free capacity.

Operator

Our next question comes from Colin Rusch with Oppenheimer. Your line is now open.

Colin Rusch -- Oppenheimer -- Analyst

Thanks so much. As you've looked at the lighting business in the portfolio products, could you talk about potential redesign of products or cadence of new product introductions as we go forward?

Gregg Lowe -- Chief Executive Officer

Well, as we have talked about historically, I'll kick it off and maybe Raiford or Mike can add some color to it. The team, I'll describe it as sort of, I'm just gonna say most of fiscal '17 was really kind of shut down on new product development because we were repairing the new product development process. That started coming off and the repairs were kind of complete as we got into fiscal '18 and I would say the back half of '18 we been in the mode of releasing new products.

We released a number of new families out to the market already, they're getting very nice acceptance. We've had well over 100,000 products out in the market. We've had no warranty or quality kind of issue in any kind of large capacity at all. They've really ramped very, very nicely. I'd say that team is now back in the mode of where we'd like them to be, which is developing innovative products that are high quality and high reliability that customers are excited about and that we can drive growth and good margin on.

Raiford Garrabrant -- Director, Investor Relations

Just one other point on that, so the 100,000+ new products have been across categories, including high bays, low bays, streetlight, and aerial lights. And then we've also, in the most recent quarter, the gem quarter achieves some cost outs, which is also an area of focus within product development and those new cost-reduced products will be flowing through the P&L in the quarters to come. So that's another area of emphasis.

Colin Rusch -- Oppenheimer -- Analyst

Great. And then, just switching gears to silicon carbide and the competitive dynamics there. Obviously, it's still early days with this and we're seeing some new competitors enter into the market, a lot of different approaches to producing material and then producing devices. As you guys look forward over the next two to three years, what's the strategy around maintaining a competitive edge? Is it really just about hound to market, availability of material, are there quality materials that you're seeing as key or are there some other dynamics that we should be thinking about?

Gregg Lowe -- Chief Executive Officer

I've been in the technology world for a long time, I've been in semiconductors for over 30 years and every business that I've ever been associated with has had a similar kind of competitive dynamic where kind of every day you've got some competitor going after your customers' mindshare and market share. So I think this is kind of the norm in the industry. We're in kind of a unique situation right now because we have a pretty substantial scale advantage in a market that's growing very, very rapidly and in an industry that has -- now I'm talking about automotive electric vehicles, which has a good decade and more of growth potential. It's a really fascinating market for us. I think, for us, the most important thing for us to do right now is drive that scale advantage, increase the capacity and the output, improve the yields and drive down costs, and increase the adoption of silicon carbide across more markets.

And so, that's what we're focused on right now. It would be real easy for everyone to -- I don't want to say just sit back but sort of say, wow, we're in this great position, let's just accept it as it is. We're not doing that at all. We're saying we're in a great position where we've got great markets and potential and we need to double down our efforts in terms of expanding capacity and reducing costs so that we can increase the adoption of silicon carbide across the power electronics industry.

Operator

Our next question comes from Jeff Osborne with Cowen and Company. Your line is now open.

Jeff Osborne -- Cowen and Company -- Analyst

Hey, good afternoon, guys. I just had two quick accounting ones. I think I read somewhere that you sold your plane for $5 million? Is there a one-time gain that either happened in the quarter or is going to happen in an upcoming quarter?

Gregg Lowe -- Chief Executive Officer

We did sell it for a little bit less than $5 million and we basically book kept that all. And when we did it, we had it write it down to its fair market value so there wasn't a gain.

Jeff Osborne -- Cowen and Company -- Analyst

Got it. And then, Mike, can you just touch on the tariff impact to the lighting segment? Are you securing any components from China?

Mike McDevitt -- Chief Financial Officer

That I would tell you is still a PBD. They weren't covered under US list one or US list two. They are part of US list three, which is not an effect that's under evaluation now so we're kind of continuing to evaluate that.

Gregg Lowe -- Chief Executive Officer

Just to clarify, are you asking about lighting products from China or LEDs that would be coming from China?

Jeff Osborne -- Cowen and Company -- Analyst

Fixtures that you're selling branded by Cree, any component procurement from China that would be impacted having a higher bill on materials?

Mike McDevitt -- Chief Financial Officer

Nothing at this point.

Jeff Osborne -- Cowen and Company -- Analyst

Or the transfer pricing of your own packages there produced in China? That wouldn't impact the lighting business with the current July tariff?

Gregg Lowe -- Chief Executive Officer

To the extent under list one that there's US content, we qualify for an exclusion on that value.

Operator

Our next question comes from Kristen. Your line is now open.

Kristen.

Good afternoon, thanks for letting me ask a question. First questions on silicon carbide. You guys aren't really the only one in the industry adding capacity for silicon carbide wafers. A lot of your competitors are, as well. At what point do you become concerned that the industry's gonna go from supply constraint situation to excess supply?

Gregg Lowe -- Chief Executive Officer

Well, I think you got to look at the growth drivers in the industry. And you start with electric vehicles. I think at our analyst day, we had mentioned that from the October timeframe through to the analyst day, which was in February, car manufacturers and people in the auto industry had announced investments of about $60 billion in the electric vehicle arena. Since then, it's grown to over $100 billion of investments.

More and more companies have announced that all their models are gonna be EV by a certain date or they're gonna have 20 models by a certain date and so forth. So more and more of that is happening. I think the demand, the growth of the demand of this industry, is likely gonna outstrip the supply for some time. We're obviously trying to alleviate that ourselves by increasing the output. But we're a pretty big player in this space and the fact that we've doubled over the last year and a quarter or so, I think it likely says we've become an even bigger market share type player in this space.

As I mentioned earlier, we always worry about competition, we're paranoid about it every day, and what we're doing is we're bringing on the manufacturing capability as quickly as we can while at the same time driving costs out so that we can increase the adoption. I don't know how to answer it other than that. You always have to worry about this stuff but I think the key drivers are really pretty solid.

Kristen

That's helpful, thank you. And then sticking on the silicon carbide topic, have you seen any impact at all of the recent tariffs, especially EVs in solar? There's a lot of consumption in China or there is soon to be a lot of future consumption in China, or have there just been so much done that it's pretty much just not been an effect at all?

Gregg Lowe -- Chief Executive Officer

I don't know of any impact of the tariffs on the silicon carbide or the appetite for silicon carbide in electric vehicles. I'm unaware of any of that. We've got great engagements around the world with the vehicle manufacturers, the tier ones and so forth. Basically, there's been no change in the adoption rate, if anything it's gotten more accelerated.

Operator

Our next question comes from Edwin Mok with Needham and Company. Your line is now open.

Edwin Mok -- Needham and Company -- Analyst

Great, thanks for taking my question. Mike, it's been a pleasure working with you and good luck with everything. The first question, actually a longer-term question, I guess on silicon carbides' performance of antics versus higher cost versus silicon. Just curious, Gregg, is that a tipping point or something that you can point to that -- or one thing or more things that you can point to that might bring that gap that allowed potentially a wider adoption? Do you think 16 wafer is necessary for an industry to adopt or for it to get to a cost competitive point? Any color you can provide around that?

Gregg Lowe -- Chief Executive Officer

Well, I would tell you that, and thanks for the question, Edwin. I would tell you that we're absolutely focused on continuing to drive the cost down in silicon carbide and drive the gap between silicon and silicon carbide more narrow as well. We've got a number of different efforts in doing that, one is obviously, we get cost reductions just simply because of the scale advantage we have and so that's a pretty simple equation.

The second is a number of what I would describe as engineering efforts. These are projects where we have a couple of people working on a couple of different techniques, which will increase yield and improve throughput and output and so I would describe those as we've got a pretty good line of sight for some pretty decent cost reductions associated with that. And then we've got more further out type things where we're looking at challenging material science and moving things like 8-inch wafers and so forth that are a little bit further out.

But we're actively engaged on all of these different things because we know that to the extent that we can continue narrowing the gap between silicon and silicon carbide it's gonna be better for us, it's gonna be better for the industry. That tipping point has already sort of begun to happen in the auto electronics or electric vehicle industry. And obviously, as we narrow that gap and we drive costs down, we'll continue driving the adoption.

Raiford Garrabrant -- Director, Investor Relations

And Edwin, just one thing to add there. We're trying to narrow that price differential assuming silicon wafer prices are stable, when in fact over the past couple of years, silicon wafer prices have risen pretty meaningfully and forecast suggests that's gonna continue in the coming years.

Edwin Mok -- Needham and Company -- Analyst

Okay, great, that's very helpful. And then just a housekeeping question; on the first quarter, you said LED is gonna be down and I think you highlighted three reasons behind the tariff confounding ability of the capacity. And when you talk quantify, are you talking about which one is the biggest driver for the sequential decline? And then how much did that power harm your ability of your fourth quarter revenue?

Mike McDevitt -- Chief Financial Officer

I would say they're kind of in a similar range among those three pieces and the impact on the revenue. And the mid-power, the demand was up pretty nicely quarter-over-quarter. The overall mix of that business is still a small part of the overall LED business.

Operator

Our next question comes from Craig Irwin with ROTH Capital. Your line is now open.

Craig Irwin -- ROTH Capital -- Analyst

Good evening and thanks for taking my questions. So Mike, when you initially gave us guidance for incorporating the Infineon RF Power business into the models, you were pretty cautious about the outlook given the storm clouds around ZTE. Now that many of those issues are clearing, hopefully, done by your first fiscal quarter, would you expect those assets to have organic growth year-over-year and contribute to the overall level of growth within the core business by the end of '19?

Mike McDevitt -- Chief Financial Officer

If you're talking about ZTE specifically like we mentioned earlier, it's in there for a small amount in Q1 and then it's kind of, we'll wait to see how that develops. We're having discussions with ZTE but it remains to be seen how quickly they'll ramp up so don't have any systemic estimates for them for the rest of the year.

Craig Irwin -- ROTH Capital -- Analyst

Okay, second question to that. LED headlights, there was quite a lot of optimism that you could be heading into one of the higher margin areas that might be a match for your traditional higher output higher brightness silken carbide LED chips. Can you maybe update us on where we stand for new programs? What you're looking at as potential opportunities for Cree over the next handful of quarters?

Gregg Lowe -- Chief Executive Officer

Sure, Craig. In the most recent quarter, we got a nice number of new design-ends, we've got an active and design-end project fun all this up, meaning free from where we were before. We've got our first wind with an American brand, which will be ramping in the fall, so those products will be hitting the road there.

So I would say it continues to build upon what we talked about at the investor day, which is we think that, you know, automotive could be a $100 million opportunity over the timeframe of the long-range plan that we laid out and we're seeing good progress there.

Operator

I'm showing no further questions in queue at this time. I'd like to turn the call back to management for closing remarks.

Gregg Lowe -- Chief Executive Officer

Thank you, everyone, for your time today. Again, I want to thank Mike for his service to the company and we were chatting earlier, this is his 25th earnings call and really appreciate everything he's done for the company over this time. We do appreciate all of your interest and support and look forward to reporting our first quarter results in October. Thank you.

Operator

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program and you may now disconnect. Everyone, have a great day.

Duration: 55 minutes

Call participants:

Raiford Garrabrant -- Director, Investor Relations

Gregg Lowe -- Chief Executive Officer

Mike McDevitt -- Chief Financial Officer

Hilary Cauley -- JMP Securities -- Analyst

Jed Dorscheimer -- Canaccord Genuity -- Analyst

Hank Elder -- Goldman Sachs -- Analyst

Harsh Kumar -- Piper Jaffray -- Analyst

Colin Rusch -- Oppenheimer -- Analyst

Jeff Osborne -- Cowen and Company -- Analyst

Edwin Mok -- Needham and Company -- Analyst

Craig Irwin -- ROTH Capital -- Analyst

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