Hi Lipolymer, John, et al.
Listened to the call. The company in question in Malaysia is Etion, previously known as Shubila.
Lipolymer, remember the video of the packaging well. The format used was one of a sheet with depressions for multiple cells, then the cells laid in place, electrolytic gel added, and the top layer drawn over. Result was that each cell had a completely flat tab on all four sides, difficult to fold over without potentially creasing and causing weak points, but doable.
On the call, Lev referred to two Italian machines using sachet-type packaging, making me think more of a sleeve with a flat seam on one of the sides (not edges), with only the ends being flat-sealed and folded over. Thus, if my impression is correct, not the 'corner' problem the other sealer would have. So, two machines of the earlier model, two of the sachet-pkg'ing model, and sometime this spring two more of their own design:
Lev stated they have two more on order, of their own design. Since the German firm making the high-speed assembly machine is creating according to a design Valence helped develop, my guess was the same German firm is producing the two packaging machines ('15 cells per minute' is what Lev said).
OTOH, the statement that the sachet-packaging machines have been in-house for some time (filling the Alliant order), and the knowledge that the old Klockner assembly equipment has been free to manufacture the 4x4 or 4x5" (he said suggestively <ggg>) size cells for a few months now, leads one to think they could be manufacturing and packing such size cells in a fully-automated fashion as well, IF the Italian machines weren't fully commited to other orders. Since the Quantum order was for 4x4 cells, they may be coming off the K (aka 'David'); also since the Fabl is committed to Alliant production first, this would further suggest this scenario. Possible delay in laptop cell production until either the German machine is in place, running, debugged, and validated by customer (put at spring '02 for the final step); or unless some space comes off the K or the Fabl ... don't think a laptop customer could rely on the latter, so my guess is the K for now, for any laptop order. UNLESS they can may a 3x6 shape off the Arco's, not sure ... anyway, the laptop guys want second sources, and will look to li-ion for that (note the G-4 using a 4x5"x1/2+" dimension for their 50wh... vlnc could indeed start in at that format before next spring, tho not as primary source... yet if the phosphate yields the performance expected , THAT may be the first place you see it).
Lipolymer, remember we saw hand-assembly of G* cells in Henderson a year ago? heck, some of those may have been production runs. yeow.
Another thought: looks like $2.3M of IDB collected (190k cash, the rest receivables).... and I recall the old wording had tiered thresholds of 1.5 and 2.5M cumulative battery rev... would collect on two 800k increments of funding... and with the Alliant sales, they may have passed an additional threshold. But the agreement may have been reworked with new wording, it was set to expire this year. Lev mentioned '30% of the billed amounts' and also mentioned 'we billed for $10M'... I don't think they've produced $10M in total of *finished* products for as long as they've been in existence, so I suspect the document may have been reworked to allow for rebates on partially-finished product. This would be important to Valence, since their business model now would appear to result in huge sales of chemicals, films, and some laminate... which by the old wording would NOT have counted for any IDB money. Just something to look for in the future.
So I read the call as: the Alcatel order will be transferred to (Etion?) instead, and Valence will not produce that size product in NI. Valence will receive royalties but not revenue on that order. Hanil is selling to the Chinese exclusively until they get more equipment in place. NI is producing for G* and the modest HDR samples for QCOM, and the other orders may be pushing higher up on the list (the scandinavian order, though that size cell is also ostensibly not to be made in NI either, so perhaps it is just a matter of time before that is handed to others).
Panasonic (aka Matsushita) is a good licensee, though it is for the new lipoly product which may take up to two years to ramp up equipment for. Same story for Samsung. Pretty much as expected. License revenue will pass production revenue, though not by much; NI production revenue won't ramp until later in '02, just a few million per Q until then, although film sales will maybe double that later this year.
All in all, slow schedule, but definitely on a path. Patents will prove to be the key. |
