Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : VALENCE TECHNOLOGY (VLNC) -- Ignore unavailable to you. Want to Upgrade?

To: Robert Cohen who wrote (20831)	8/3/2000 9:30:40 PM
From: rli123	Read Replies (1) \| Respond to of 27311

Robert -- just to let you know I'm paying attention --- "90K batteries/month (7 days a week?), 180K batteries/quarter" -- I think you probably mean 90K x 3 = 270K batteries/quarter. For all the rest of you, there will be a pop quiz coming up -- closed book I'm afraid. rli

To: Robert Cohen who wrote (20831)	8/3/2000 9:52:40 PM
From: Rich Wolf	Read Replies (1) \| Respond to of 27311

Bob, now that I've presented the sober view on how long it might take for a licensee to 'get up to speed,' there are some potential shortcuts as you pointed out. If another licensee already had, say, an Arcotronics assembly machine, and had had experience running it (but failed because of poor QC on laminates going in, and some of the processing after assembly), then they might just need some of the extraction, packaging, conditioning, and degas/reseal equipment. These items do not require the long lead times, as Lev noted on last fall's CC. Beyond this, there is the issue of Quality Control. Valence has indicated that this is a critical element in their production process. How long would it take the licensee to develop the skill, or would they sub to Valence to help evaluate their product, etc.? The question becomes, what would be the nature of the relationship between Valence and this proposed licensee? Who would have final authority on QC? etc. Good questions, all. Regards! Rich PS One might do well to think about how long it has taken Hanil to get up to speed.

To: Robert Cohen who wrote (20831)	8/3/2000 10:19:04 PM
From: Rich Wolf	Read Replies (2) \| Respond to of 27311

Bob, here's another cut at the numbers for you to consider: 1. The production was not at that rate for the entire quarter. 2. With shipments to Alliant for laminate and partially-completed cells, the amount of 'non-laminate' sales could still be the 'bulk' of the $2M rev, yet QCOM sales might only account for $1.2-1.5M of that. 3. Re: The quoted rate of 20 bi-cells/min from the 'David' (aka ye old Klockner): Remember we had heard '5 cells/min' for the 4-bicell-thick 4x4" laptop cells... this is consistent. Now we have 9-bicell-thick G* cells, which can only be produced at the rate of 2.2 cells/min, or 132 cells/hr, as you noted (the speed limitation of the pick'n'place mechanism, three generations old technology). I would use 20-23 hrs/day, so you get 2600 to 3000 cells/day. We don't know what fraction of the overall 'material yield factor' they report applies to partially completed cells at this point, let's just say it's 80%. So 2000 to 2400 'good' cells/day. Run your machines for 5-6 days/week (leave downtime for machine maintenance). That's 10-15k cells/week, or 120k to 180k cells/quarter. 4. BUT, a handset takes two cells. We don't know pricing, but it might have been less than $10/cell by 15-25% or so (it was the first deal). Worst case is $15/pair. So at this max production rate on the David you would only generate $900k worst case (120k/2 x $15), maybe twice that for best case (180k/2 x $20). 5. To match a slow ramp at the beginning of the quarter to the higher rate later, assume one month at one shift, another at two shifts, and the third at three shifts. So you cut your numbers down by 2/3 overall, so 'best case is then (2/3) of $1.8M, or $1.2M. I think we're getting in the right ballpark. ------------------------------------------------- To your second question, where are these cells? First, consider the 120k-180k range for cells, then the 2/3 factor... so we figured perhaps 120k cells produced. This is only 60k handsets' worth, not counting spares. I assume everyone buys one spare, so that's only enough handsets/spares for 30k users. Also, the first month's production took another month to quarantine and ship on to Moltech, and then were passed on for final assembly into the handsets and distribution. The cells manufactured in April would have left Valence in May, and hit the distributors towards the end of June, give or take. G* was having handsets returned due to flawed batteries from TDI, and these probably received Valence replacements. The volume shipments from June production are probably just leaving Moltech now (remember the quarantine step before they leave Valence). If Lev says he made and shipped that many, they're in the pipeline, and just coming out only these last few weeks. Sometime before Labor Day we should hear reports of handsets circulating with 'Valence' inside... assuming the G* subscriptions improve. Regards, Rich