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

To: Pronichev who wrote (8145)	2/10/1999 9:26:00 AM
From: Rich Wolf	Read Replies (2) \| Respond to of 27311

My notes say 5 feet per minute, and I remember hearing Lev state that. Let's consider: that's 300 feet per hour, or 7200 feet per day maximum (we know it's less, but bear with me); that means we make 36,000 square feet per day, maximum. Now we can make at most 9 pieces of size 4"x4" from each square foot. Again, we know there's cutting loss, edge loss, etc., but this is a maximum number. So we can make 424,000 pieces of size 4"x4" per day. Use two for each bi-cell. So at most we have material for 212,000 bicells of size 4"x4" per day. Then if we use four bicells per laptop cell, we have material enough for 53,000 laptop cells per day, maximum. Similar calculations for the cellphone cells would yield 3-4 times as many bicells, from the same amount of laminate, and the number of cells would depend upon the stacking. The samples we saw of the 43D, for instance, apparently only stacked two or three bicells. Let's suppose we use three, so that we get 4/3 as many cells per bicell as we calculated above for the laptop cells. So we have at least 4 times as many of the cellphone cells for the same surface are of laminate from which we can make laptop cells. Then consider: a rate of 5 fpm x 5 feet wide yields 25 square feet per minute of laminate. If each square foot can make 9-4"x4" pieces, and we need 2x4=8 pieces to make a laptop cell, then we could make 25x9/8=31 laptop cells per minute from the laminate, or at least four times as many cellphone cells (probably more). Say we could make 10 laptop cells per minute (hypothetically!) from the large cell line; then we have left the 31-10=21 laptop cell equivalent amount of laminate, from which we just guestimated we could make at least 4 times as many cellphone cells, or 84 cellphone cells per minute. Our current small cell line only makes 25 per minute, so we have excess material for another 59 cellphone cells per minute. If the rate for the laptop line is really faster, because it makes 5 batteries/min (or 15 cells/min), we're still okay. These numbers are VERY crude, and off the top of my head, so let's not put much weight in them, except to say that we have wiggle room to believe that we have enough laminate to run both assembly lines flat out, three shifts per day. And we may not be running 3 shifts/day for the assembly lines for quite some time. So I'm comfortable that the quoted rate of 5 fpm of laminate can supply the first two lines at less than three shifts per day. We're okay for startup, although the consequence of your point is that the machinery to create the laminate is probably going to be running more hours per day than the first three assembly lines, but not by a huge margin. This brings us to my earlier point, that it's going to be fun to see them increase the production rates in a 'balanced' fashion, once they go to daily production in response to the first PO. What do you think? Did they build enough equipment at the front end to feed the first two, and possibly also the third, assembly line? It looks like it to me, and I'm sure they did the math a lot more carefully. PS It would be better to pull out the spec sheets for the cellphone cells, and more precisely calculate the cross-sectional area of laminate required to fabricate the different cell types, and not use my normalization to units of laptop cells... it just fell out that way on my first pass, but it's far less exact. The results depend greatly upon the cellphone cell configurations. This is just my quick back-of-the-envelope calculation, without the spec sheets handy. So again, PLEASE don't put too much weight on the exact numbers. Time for my first cup of coffee, now. Please don't hang me on this while I'm gone! Thanks in advance.