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

To: Javelyn Bjoli who wrote (3922)	8/24/1998 8:59:00 AM
From: John Curtis	Respond to of 27311

Javelyn: My thoughts: 1)"I think your timetable is way too aggressive for these reasons: Unlikely that contracts will be announced prior to start of production. Perhaps they will be announced concurrently. I would be surprised if any potential customers are willing to tie their reputations to this company prior to proving itself."---Somewhat of a chicken and egg situation, eh? In order to produce you need contracts, yet you assert production needs to be shown prior to agreement of contracts. I submit that IF OEM's are testing product from the INTEGRATED lines, this could suffice. HOWEVER, I agree OEM's ain't gonna put all their eggs in one basket, so I expect initial contracts to be fairly small. Test runs if you will, and these can occur prior to January although I still expect a minimum of 2-3 months of OEM testing of those integrated lines output, this per L.D.'s last c.c. commentary regarding this very thing. 2)"Doubt that cell phone batteries will be made any earlier than January. The equipment is being installed later than the notebook line, and has to run at a much higher unit volume, which will make it harder to debug."---Agreed that it follows production may be no earlier than January. Particularly since the cellphone lines were slated for delivery in Oct.. However, the being harder to debug statement is conjecture, albeit one worth noting and asking in the next call. 3)"I wonder if analysts from meaningful houses will be willing to make recommendations based only on a plant visit. It seems more in character that they will wait until there are some earnings in print."---On this we agree. I don't expect any recommendations until sometime towards the end of 1st qtr to mid 2nd qtr next year IF they are shown the N.I. line(s) in full operation within the next 6-8 weeks. Houses are mindful of their reputations, and won't be making recommendations, PUBLICLY, until production is manifest. What they recommend PRIVATELY to their special clients however, is another matter entirely. 4)"I don't remember the timeline for S. Korea startup, but I believe it is pretty far out in time relative to NI. Please add some evidence from the company."---Per the 2/17/98 c.c. L.D. was asked about the Korean facility, to which he answered that he expect their line(s) to be operational by end of '98, at the earliest. A parenthetical aside on this one. Per a Korean news report the Hanil group was stating that the line(s) would be operation in the current timeframe. This I find hard to believe. When this was broached to L.D. during the 6/30/98 c.c. he said he hadn't seen the news item but would still be surprised if they were producing by 1st qtr '99. 5)"Also, it is pretty aggressive for the company to work on bringing up the notebook and cell phone lines at the same time. There might be enough technicians, but could be a big strain on the R&D scientists and exectives to be in a position to solve several big problems at once. It seems more likely that they would get one running smoothly and then move on to the other."---To the extent these two product types command a massively different style of production line to produce then to that same extent I agree. Based on the last c.c. the N.I. line(s) were to be up and operational by the end of that week as INTEGRATED units. IF this has in fact occurred, then perhaps they CAN free up personnel to handle your aforementioned big problems as it relates to the cell phone lines to come. Of course, this is conjecture, which means we must wait and see, eh? Regards! John~

To: Javelyn Bjoli who wrote (3922)	8/24/1998 9:18:00 AM
From: FMK	Read Replies (1) \| Respond to of 27311

Javelyn apparently you didn't listen to the conference call. Mark Johnson, on the other hand, states that he listened to it over 5 times and agrees with my timetable. It was clearly explained that the equipment has already been debugged and run as separate units. As I understand it, what remains for the two assembly machines designated for cellphones is essentially to bolt them in place and work on feeding laminate to them and moving assembled cells from them. I heard that they are scheduled to arrive in Sept. Lev mentioned during the conf call that Cellphone customers are more likely to risk that the company may not be able to deliver high enough volume soon enough because they have liquid canister type battery packs to fall back on. Another thing to consider is that if the separate categories of equipment have already been thoroughly tested indivdually, they are much further along than ULBI was when they announced their laptop battery orders from Toshiba. As far as I know, they may still not have their first assembly line completely debugged.