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Technology Stocks : VALENCE TECHNOLOGY (VLNC)

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To: Matthew Leo who wrote (92)2/16/1997 5:34:00 PM
From: FMK   of 27311
 
Some new information- Hearing production rates in cells/yr during the conf. call raised concerns that I didn't hear it right a few months earlier. I have since spoken with several people at the company to learn more. I will do my best to summarize. The capacities discussed here are for the lower-cost Magnesium version.

1-Each Valence Technology cell is a stack of flat sheets of material.
2-Cell shape will have all surfaces rectangular--like a cd rom or audio cassette case.
3-Cell voltage remains stable at 3.8 volts over a wide current range.
4-Capacity is normally stated in Amp-hours. Multiply x 3.8 volts for Watt-hours.
5-Cells will have attached leads, not terminals, for interconnection.
6-Typical cellphone batteries will be two 4.1 watt-hr cells in series and will take the same physical space as two Sony 18650's. Footprint will be 36 x 65 mm (1.4 x 2.56 inches). Thickness 9mm (.354 inches)
7-Typ notebook batteries will be 3 or 4, 15.5 watt-hr cells in series and will take the same physical space as a CD ROM drive. Footprint will be 4 x 4 inches.
8-These watt-hr numbers are for MnO2. Specific energy for Cobalt is 10-20% higher.
9-A changeover to cobalt is simple substitution of one ingredient for another in a batch - walnuts vs pecans.
10-Each production line has several machines, or stations, connected together.

The first steps for manufacturing cellphone and laptop cells are identical. At some point downstream, material is cut into four identical cells for cellphones. For laptops, it remains intact as one large cell. Machine cycle time does not change, so the production rate for a certain line is a multiple of the rate for the largest cell(1-2-3-4 etc). Although these first (new standard?) laptop batteries will have a 4x4 inch footprint, the mfg equipment upper limit is 4x5 inches.

Accordingly, the first line now in initial operation and built by a North American pharmaceutical packaging equipment mfr, can produce 1.5 million laptop cells or 7 million cellphone cells/yr at 24hr/day. During the first few months, it will be alternating between the two cell types described above.

The second line, being built by an Italian capacitor machinery mfr, should produce 4.5 mln laptop cells or 21 mln cellphone cells/yr. Although the 3rd and 4th lines are on order and will be nearly identical, their schedules should permit incorporation of improvements and fine-tuning etc found appropriate for the 1st high-speed line.

The charging circuitry will be specified by the company for the OEM's. A likely recharge time will be about 3 hours with no "memory" concerns. Charging circuitry for existing batteries other than Lithium-Ion will not be appropriate. Retrofit kits for pre Lithium ion batteries (another OEM market for VLNC) would therefore include new circuitry and instructions for disconnecting the existing charger.

VLNC's laptop cells hold about 150 watt-hours/kilogram and cellphone cells about 130 wh/kg. The difference is attributed to the larger portion of packaging material for several small cells. Currently, liquid-electrolyte LiIon cellphone batteries sell for about $100 and laptop batteries for about $200 retail-just slightly more than NiMH.

Energy production differences(wh/line/yr) between cell types are largely due to their size as a % of the maximum width for the machine,. Each laptop cell uses only 80% of the 5-inch maximum width, which more than offsets its slightly higher density in watt-hr/kg.
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