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

To: John Curtis who wrote (3437)	7/19/1998 12:56:00 PM
From: FMK	Read Replies (2) \| Respond to of 27311

For anyone working on Line1 capacity calculations- I was going through a stack of notes and have an update. My recent numbers for line1 were based on 1.2 million laptop batt/yr for 1 shift which was passed on secondhand from a conversation with the company last fall. It may be correct, but two sets of earlier notes indicate 4 million laptop cells/yr. I will use my earlier numbers to be on the conservative side. If we assume 3 cells per battery, a better number would be 4/3 or 1.33 million laptop batteries per year. Let's call it 1.2 mln per year because its probably what the company meant. Let's start with the May '97 specs shown on the companies website. <<http://www.valence-tech.com/products/impfront.htm>> These specs indicate that each 6mm thick 4x4 inch cell could store 4.7 Ah x 3.8 volts = 17.9 watt hours. I will add 20% to conservatively estimate Valence's new technology, arriving at 21.5 watt hr/cell. The 3-cells required for one battery should then store 64.5 watt-hr and sell for about $106 at $1.65 per watt hour(estimate) paid by Valence customers. It should be reasonable to expect at least a 50% profit margin. Let's use 40% instead. 1.2 mln/yr x $106 = $127 million revenue. At 40% PM it should contribute about $50 million to the bottom line, clearly exceeding the estimated $5 mln/quarter or $20 million/yr burn rate(arguably $4 mln/quarter or $16 million/yr if not expanding and depending only on line1). 3 cells of the thinnest (4mm) version that store about 14 watt-hr per cell should sell for 14 x 3 x $1.65 or about $70 per battery. $70 x 1.2 mln/yr x 40% = $33.6 mln per year profit contribution. I understand that line1's max footprint is 4x5 inches. If it were set up for that size, it could produce and equal number of cells that hold 25% more energy because they are 25% larger with the same thickness. A repackager could then assemble 4 cells edge-to-edge to fit an 8x10 inch laptop case. The four 6mm thick cells could store about 21.5 x 4 x 1.25 or 107 watt-hr per battery and sell to OEM's for about $175. The equivalent of 1.2 mln battyr would be reduced to 950,000 8x10 inch batt/yr per year because it would require four cells per battery. For some background on the $1.65 per watt-hour estimate, I recall that $2/wh was the rule of thumb about a year ago. During a conf call the price of a liquid-electrolyte 18650 cell was projected to drop from $8 to $5.50 by the year 2005 for a cell that is much heavier and stored about 4.7 watt-hr. To help put this in perspective, I visited a Computer City store about a year ago and found a Toshiba battery pack<< Message 1048006; that stored 41 watt hours and sold for $300 or $7.30/watt -hour. Recently Paul Klemencic found a generic battery pack for a Compaq model that stored 38.8 wh and sold for $250 at a discounted store that worked out to about $6.44 per watt hour. <<https://www.siliconinvestor.com/readmsg.aspx?msgid=5219275>>. From a conversation a few months ago with an analyst who brought ULBI public, a yardstick for complete battery assemblies mounted to circuit boards had been as high as $5 a few years ago. A current estimate is just over $3 per watt-hour for the assemblies containing the charging circuitry. It should not be unreasonable then for an independent repackager to buy cells from Valence at $1.65/wh and resell them for $3.10/wh. Cells for a 45 wh battery would cost him $74. He would attach them to a smart circuit boards and resell the assemblies for about $140 each. It could be argued that technology that can squeeze 50% more energy in the same space and shed 40% of the weight should sell for more per watt-hour- perhaps $1.80 for similar applications. However, the effect will more likely be to depress the pricing of the existing Lithium-Ion liquid-electrolyte-in-the-can technology. Production rates for the high-speed assembly lines differ significantly.

To: John Curtis who wrote (3437)	7/20/1998 11:59:00 PM
From: Javelyn Bjoli	Read Replies (2) \| Respond to of 27311

Forget solar cells, this is the most exciting news of the last (or should I say next) 5 years: Meanwhile, Robert Hockaday, a scientist on entrepreneurial leave from Los Alamos National Laboratory, has developed a miniature fuel cell intended to provide energy for small portable electronics, such as cellular phones and notebook computers. Hockaday microengineered his Micro-Fuel Cells employing the same miniaturization and materials technology used for ICs. Now he is designing a way to inexpensively manufacture the fuel cells using a printing process similar to IC lithography. The cell is said to remain powered-up on standby for more than 40 days with a talk time of 100 hours, compared to one day of standby power and two hours of talk time with conventional batteries; power would be restored with a "few drops" of methanol. Hockaday's company, Energy Related Devices Inc. (Los Alamos, N.M.) has received a $1 million investment from Manhattan Scientifics Inc. (New York City) to build finished preproduction prototypes. manhattsci.com