<< I find some of your statements very enthusiastic.>> Enthusiasm and conviction are what enable me to take large positions and hold volitile stocks for long periods of time. I owe most of the money I have made to this approach.
<<I think the issues raised by Stitch regarding the work of Fujitsu and their CAPS technology is a very viable competitor and yet you continuously ignore them. >>
I ignore them only to the extent that I don't speak Japanese and, even if I did, would get no more out of Fujitsu. Seriously, Fujitsu seems to have the only system which is competitve performance wise. HTCH maintains it is inherently uncompetitive in costs due to small batch processing in vacuum chambers. If Fujitsu thought CAPS had great potential, it is likely they would have previously tried to supply others in the industry. Now, they would likely be at least two years behind if they have to build a factory, qualify and ramp production. Two years is a very long time in this business. HTCH is hopeful they can get in the door to supply Fujitsu before they expand their internal capacity to meet even their growing internal needs.
In many industries, all that is avaiable to the investor is to use results as an indication of business potential. (Look at Dell and EMC where you have domination (modest compared to HTCH's in terms of both duration and market share) but would be hard pressed to even begin to identify all the catch-up programs at all of their numerous competitors. Analyzing HTCH is a dream in comparison).
<<To continue to ignore these competitors seems unwise. Rightly so, you can claim that it's nearly impossible to get good information on their costs, program qualifications and other structures. But,this argument would have seen your investment in Read Rite fall from mid 20's or 30's or 40's depending on when you started to a low under $5.>>
RDRT and KMAG, which I wouldn't have touched with a ten foot pole, were very different in that they were largely swing suppliers to the industry and both were up front enough to tell everyone that they were experiencing margins above their target ranges. They also lacked highly proprietary technology.
<<As I've pointed out before, there are many companies who are
trying to contest this position, not just Innovex. Others such as Fujitsu, 3M, Read Rite and Nitto Denko plus whatever in-house solutions that might come. IBM is a co-developer of TSA and may have continued to work on developments.
By the way, are there any continuing payments that Hutch must make to IBM for their patent rights?>>
3M, RDRT and INVX all fall in the flex circiut camp, with INVX's limited sucess apparantly the best of the group. It was a pipe dream to believe that this negligible investment alternative which HTCH had previously rejected, would be superior to perhaps ten years of HTCH and IBM research and hundreds of millions of capital expenditures. Its now appearing that if any alternative has any potential, HTCH will be to 10 or 15 million TSA per week already giving it 70% of the market before a competitor is even out the gate. Then the focus will be on Femto heads and Microactuation where HTCH's patents and technological superiority again come into play. In truth, its almost starting to look as if we're discussing the last war.
HTCH will pay IBM one more 2.5 mil payment (already written off) and what seems an insignificant royalty. It appears IBM has shown no interest in competing with HTCH (Simply, IBM is not in the business of making suspensions. SEG tried recently and threw in the towel.) This business is EXTREMELY unattractive to anyone else and, increasingly, to those already in it). Its easy to forget that HTCH designs much of their own proprietary manufacturing and measurement equipment, holds numerous patents and has twenty years experience, creating huge barriers to entry. They have shown they will go to any lenghts to maintain the domination that they have held for longer than most technology companies have existed. Z |
