I thought "uh-oh" when I read your prediction.
Not that I'm superstitious, but it's uncanny how often that happens when it comes to short-term predictions.
I listened to the Kopin conference call Thursday night. Our man Harrison asked a few questions (from about 4:45 to 12:00 of the Q & A session) including a leading one with some bearing on AXT:
Q: As far as the availablity of raw materials or materials such as substrates, obviously in a weakening environment is that one way you guys are going to be able to control your costs, and I guess, not putting the cart before the horse, are you guys seeing some of the pricing for some of your raw materials coming in with the slowing market environment?
A: I think the cause of that question is really cost-control environment. I think that there'll be very serious cost, financial controls from us,, not just from us, but from all our vendors as well as our suppliers as well as our customers. On the substrate case, we,, we always say that substrate has been, even the last ???, a challenging situation. We handled it pretty well, so with this new softness I'm sure this problem will go away. But remember this: in the area we are focusing on, wireless and fiber optics as well as portable systems, the long-term prognosis is still very good. I think that our suppliers definitely consider that this is their strong business, they're still finishing up their capacity and everything - improvements.
The next couple of questions and answers on ramp-up of indium phosphide are also interesting wrt AXT. Particularly Fan's remarks starting at around 11:00:
I think that a key thing I haven't said clearly enough is "We can grow our InP HBT transistor in our current system." We can switch in the system to InP almost instantaneously. We aren't the bottleneck; the bottleneck is going to be in the substrate manufacturers, and we're negotiating very strongly with them - and our customers are negotiating with them, too.
So, one reason why InP is coming on very strong is that it can be brought online by a relatively painless conversion of current 4-inch GaAs fabs.
Kopin's Q4 2000 Earnings Conference Call, 02/15/2001:
corporate-ir.net
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