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Technology Stocks : VALENCE TECHNOLOGY (VLNC)

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To: Wayne Allen who wrote (154)3/23/1997 12:34:00 PM
From: FMK   of 27311
 
Wayne, I was in a Computer City store yesterday and noticed a display of rechargeable batteries for laptop computers. About 65% were nickel metal hydride (NiMh), 15% Nickel Cadmium (NiCad) and the remaining 20% were Lithium Ion.
I examined a Toshiba P42489UR sealed battery pack(for a specific group of Laptops). It was about 7x2x1.25 inches with rounded edges. It was rated at 4000 MaHr (millamp-hours) at 10.8 volts dc and was priced at $299.95.

To interpret the information, I multiplied 4 amp-hrs x 10.8 volts to determine that it is capable of storing about 41 watt-hours of energy. OEM's are currently paying about $2 per watt-hr for Lithium-Ion rechargables which translates to about $80 cost to the notebook manufacturer. With knowlege that the smallest unit of voltage for LiIon is 1 cell at 3.6 volts for a cobalt anode (3.8 for Manganese dioxide anodes), I immediately concluded that, since 3.6 X 3 = 10.8, this battery pack must be some combination of 3 cobalt-anode cells in series.

I also remembered, as I stated previously in post #117 on this thread, that the industry-standard 18650 cell, made by Sony and others with liquid electrolyte in a metal can, stores about 4.56 watt/hr. When dividing 41 watt/hr by 4.56 my calculator displayed a value of 8.99. This told me that the battery pack consisted of nine 18650 cells, configured as three parallel groups of three in series, and that the shape of the battery pack was deterimined primarily by cell orientation.

Although solid polymer technology is more easily adapted to make different sizes and shapes, I understand that Valence is initially producing 4x4 inch cells about the size of cd-rom jewell cases such that four of them fit in the space occupied by a cd-rom drive. Three of the cobalt-anode versions should hold about 53 watt hr(15% more than Mno2) and cost less to manufacture since they don't require metal containers or filling mechanisms.

The absence of metal containers reduces weight by over 40% and required space by perhaps 10-15% because of the ability to more completely fill a cavity with electrolyte. As an improvement over filling square holes with round pegs, a stack of three slabs of perhaps 95% electrolyte recovers space wasted by combinations of cylindrical cells. The same analogy should apply to cellphone cells.

These are some of the factors that Hanil Telecom, a Korean AT&T/Motorola, must have considered before agreeing to put up $50,000,000 (100% of the cost) for a manufacturing plant in South Korea and to share the profits 50/50 with Valence. As you are probably aware, there is a similar joint venture with Alliant Technology for the military and government market, and that the Army has already granted them a contract.

I now realize that I've exceeded guidelines for a brief response! I hope I've answered your questions. Regards, FMK

Incidentally, I bought more VLNC Friday at 6 15/16 and 7.
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