Toby,
I would like to address a number of points that you made to Mr. Armstrong in this latest posting.
"I agree that LCD and FED are not identical, but it's pretty clear that MOT didn't spend 150M$ on a plant to manufacture FED parts for cars. MOT is definitely aiming their FED's toward the high-end personal display market, and hoping to leverage their Si experience in the process."
FED and LCD technology are two ABSOLUTELY DIFFERENT technologies. LCD technology features very low voltage and extremely low current. The perfect solution for handheld, portable, battery-driven devices. (See Armstrong, Reply 1145). FED technology is a very high voltage technology, requiring over 1000 volts to operate. This fact makes it almost certain that this technology will not see any handheld, battery-driven applications.
Because it is mature product technology, LCD's are very inexpensive. This is not the case with FED's. As you have mentioned yourself, FED's require silicon fabrication techniques and expertise. This, inherently, adds cost to the FED unit. In short, FED's are expensive.
Since FED technology is in it's infancy, the brightness lifetime of an FED is measured in hours, not years, as is an LCD backlight. There will be no consumer acceptance of limited product lifetime due to brightness degradation.
I agree strongly with Mr. Armstrong. The only market for FED devices will be in applications where power is not a significant factor in product operation. I cannot think of a better high-end application for personal displays than the automotive industry.
In light of foreign competition in both price and features, I doubt very seriously that MOT would ever consider putting an FED into a cellular phone, no matter what the market size.
"I think that TFS investors should be acutely aware the TFS offers a low end, low value added product, albeit one in very good demand today."
As a TFS investor, I am very aware of the technology they use. The reason LCD technology is in such high demand is because it works in cellular applications (FED's do not), because it is inexpensive for a cellular phone manufacturer to procure (FED's for cellular phones do not exist) and because they are low power devices, they will always have a place in battery-operated devices (FED's will never see high volume, battery operated applications).
"The company also realizes this and is trying to keep pace by introducing LCiD and working with NatSemi."
Again, speaking as a TFS investor, I think you are mistaken in your evaluation of TFS. I think that TFS is SETTING the pace by introducing products such as LCiD, LCoS of the Nat Semi relationship and LCaD. Echoing Mr. Armstrong, I think that the personnel at TFS have a firm technical grasp of the future and they are taking steps to shape the future, rather than being an also-ran.
"The next generation of Personal Displays in high-end consumer electronics will no longer be the monochrome dot matrix type that TFS manufactures."
To clarify your misconception, a high-end consumer display application is typically a laptop computer or a high-end projection unit. Since about the mid-1980's, consumers have rejected the monochrome, dot-matrix display as a display medium for "WWW surfing and reading documents." My guess it that is why TFS doesn't manufacture these types of displays.
"I don't think that TFS has a strategy to fill this market need."
Didn't you just write "The company also realizes this and is trying to keep pace by introducing LCiD and working with NatSemi." It is obvious that TFS is looking forward to the future of high-end personal display devices by working with NSM to create the next evolutionary step of the high information content color LC display.
"The question for TFS investors is how much of the low end market will remain, and how attractive that market will be. I think the demand for passive matrix, monochrome dot matrix displays will increase greatly."
I wonder if that could be the reason why TFS is putting a plant in China? Could it be that they want to further service a greatly increasing demand for passive monochrome displays? I think that TFS investors are savvy enough to realize the potential of the Chinese market.
"Many pundits talk about the day your refrigerator will have such a display..."
I think that a multi-million dollar contract to put LCiD or LCoS displays into refrigerators would be an excellent thing for my investment dollar.
"I am rather skeptical whether a supplier to this market can continue to carry a PE such as TFS's since it will be pushed down into lower margin businesses. TFS is safe for the time being, and the future is open to debate."
As far as I know, TFS is the only passive matrix LCD manufacturer making money. The fact that their PE is so low, as, say, compared to KOPN, amazes me. By the way, I thought you were a techie like me. How do you know about PE ratio evaluations?
"However, my opinion is this firm is not an INTC or MSFT with a powerful brand and nearly insurmountable technology/marketing advantage, it is more of a DEC who's technology is the answer today, but shows signs of not changing with the times."
Again, you are contradicting yourself, especially in light of the NSM activity.
"I have never had a position in TFS, but would consider shorting it in the future should the PE expand with time."
Maybe the reason you are so ill-informed about the nature of TFS's business is that you have never taken a position in the company. At the very least, your technical due diligence of the company has left a lot to be desired. I am voting with my investment dollars that TFS is currently serving the LCD market well and is looking toward the future. I recommend that you spend some time at the TFS web site. I've learned quite a bit about the company at this site.
My problem with your technical assessment of TFS is that you are uninformed about the nature of the business in which TFS is engaged. The majority of TFS's business is high-volume, low information content displays. Your evaluation of credible competition is incorrect. You should not be looking at domestic R&D activities for comparison, you should be looking at the off-shore competitors to TFS and evaluating their technology roadmaps (if they have any).
The statements within your postings are mixed and contradictory. In one sentence you say that TFS doesn't have a strategy to fill the needs of the next generation of LCD displays while in another sentence state that the company is introducing new technologies like LCiD and LCoS. Since you cannot keep a coherent thought pattern in your postings, the credibility of your technical postings continues to degrade.
You also have a definite bias toward LT polysilicon, which currently occupies a niche market in the projection display industry. Polysilicon displays will always have a niche market, much like Kopin, but LT polysilicon will never enjoy wide acceptance as a high volume display technology, due to the inherent problems due to the costs associated with manufacturing and costs due to the fact that integrated driver incorporation is not practical due to electron charge mobility.
Regards, Ben |
