It's time I let the world know about the " big " secret at ENER... With some help from a friend.... The most valuable division is Unisolar, which is the only large solar company offering flexible & lightweight thin-film solar panels. These panels have an important competitive advantage in that they are ideally suited for BIPV applications (building integrated PV). In other words, they not only produce energy, but serve as the roof too. Being lightweight and flexible reduces installation costs, and in some cases they are the only solar option some buildings can choose without having to reinforce the building structure (it is calculated that approximately 30% of buildings fall in this category). Unlike CdTe solar panels from First Solar that use toxic and scarce materials, Unisolar's solar panels use abundant materials that are environmentally benign. The company is currently producing approximately 58 MW per year, and is on track to increase production to almost 180 MW next year (the goal is 300 MW in 2010). Something that investors should be realizing (which judging from the pps is not the case) is that more than 50% of sales are exports (therefore the company benefits from a weak dollar), and margins are expected to increase significantly. The company is targeting 25%+ gross margins (which seems to be conservative and considers ASP reductions). If ASPs fall to $2/watt by 2011, assuming 15% net profit margin and 300 MW production, the company would be looking to make 90 million dollars in 2011. A 30 p/e ratio would produce a 2.7 billion market cap, discounting to the present at a 15% rate would yield a net present value of almost 1.6 billion dollars. The company has enough cash to build capacity to at least 180 MW, and might be able to attain 300 MW using cash flows. Now here is the secret- The company owns, on a fully diluted basis, about 1/3 of a little company called Ovonyx. This company has licensed its memory technology to semiconductor giants like Intel (which is a partner in Ovonyx), Samsung, Elpida, Hynix, Qimonda, and ST Microelectronics. The memory technology is based on chalcogenide materials,and is called PRAM, OUM, PCM, CRAM, and phase change memory. It is expected to replace NOR flash memory, and could also eventually replace DRAM and NAND flash. Samsung has announced production of a 512Mbit part in 2008, and Intel a 128Mbit part that could arrive as soon as the end of this year or early 2008 (Intel's part codename is Alverstone). The company also owns 50% of a JV called Cobasys that is the only North American manufacturer of NiMH batteries for hybrid vehicles. The company is selling today at less than half of its intrinsic value (a good margin of safety), and its wonderful technology promises to give the company a wide moat in the future, allowing it to obtain high returns on invested capital (therefore becoming more and more valuable as time goes by). The new CEO Mark Morelli seems to be very smart and very hard working; he comes for the Carrier division of United Technologies. 30% of the shares are shorted. ~SI
There is no primary tellurium mine in the United States or anywhere else. Tellurium and selenium are recovered mainly from copper ores mainly because they must be removed for the most common applications to be feasible. Their presence can cause the copper to be brittle. Some Mexican copper ore is less valuable for wire drawing than its American counterparts, because of its high selenium content. American domestic lead ores frequently also contain tellurium as a byproduct. Perhaps the best survey of tellurium sourcing and availability is that of the USGS. Tellurium was almost universally left in the tailings until just after World War II; it had almost no commercial uses. The discovery of solid-state electronics changed that forever. The first solid-state electronic devices depended on a property discovered in the very common element, silicon. When silicon was ultrapurifed and also prepared in a single crystalline form, i.e., the entire sample with which one was working was one crystal, it did not conduct electricity, but with the addition of a tiny amount of another element from a particular group it could be made to conduct electricity. The man made semiconductor had been born-in the U.S., of course-and the second industrial revolution was underway. That was 60 years ago. A flood of investigations of the electronic properties of materials ensued between this first discovery of man made, designer, so to speak, semiconductors and the present day. It has been the modern equivalent of the nineteenth centuryâs search for chemical elements, but with a key difference. Investigators are looking not only to expand knowledge but for specific properties, which can be commercialized. Solid state electronics, based on crystalline silicon and germanium, originally discovered in a rare mineral and only produced at first as a tiny byproduct of coal (ash), soon did away with essentially all of vacuum tube electronics. Before that first revolutionary changeover was completed some researchers at Bell Telephone Laboratories (the place where the first transistor was made in 1947) had looked at and discovered semiconducting properties in non-silicate (i.e., non ordinary window) glasses. The disordered solids, described as glassy or âamorphous,â made from, for example, germanium, arsenic and tellurium, could be formulated so that they could be used as electronic switches or memory devices as long as very small currents were involved. This was in the 1950s. In the early 1960s an intuitive genius from Akron, Ohio, Stanford R. Ovshinsky, decided that amorphous semiconductors could be made that would switch and conduct large(r) currents and could be made much more cheaply than single crystal silicon or germanium devices. He also did extensive research on the use of amorphous materials as non-volatile computer memories. They caught the industryâs attention early on, because hey could be made to ârememberâ their setting even with the power âoff.â It has been 44 years since I made, in a cobbled together vacuum coater, at the inventorâs Stan Ovshinskyâs direction, a layered thin film of tellurium, arsenic, germanium, arsenic, and tellurium. After we figured out how to make non-destructive electrical contacts to the thin film I watched as Stan cranked up the voltage, by hand, until suddenly the oscilloscope showed that after a threshold voltage had been passed the film conducted electricity and then when the voltage was reduced the film stopped conducting electricity. I well remember the stench of burning tellurium in the air that day. The crystalline semiconductor revolution continued in full swing for many years after that day, but slowly the properties of tellurium based glasses became useful. I remember also the very day that Stan said, looking at some crystalline dots we had created with a laser in an otherwise amorphous film under a microscope, âIsnât that what a recording does?â It was, and the recordable CD and DVD were both direct results of that discovery as their pioneering Japanese manufacturers will tell you. But it is just now in 2007, nearly 40 years after the above observation, that Stan Ovshinskyâs discovery of what others call phase change memory and what he calls the Ovonic effect may well explode in unpredictable ways and drive the demand for the very rare element tellurium through the roof. Intel and Samsung both will, this fall, introduce flash memory replacements made from non-volatile amorphous technology that can be used, erased, and used again indefinitely, but, rather than being crystalline silicon technology based, are made from tellurium based glasses composed of germanium, antimony, and tellurium. These amorphous technology flash memory successors will replace some magnetic hard drive uses, but their (unpredictable) explosive growth could be in inexpensive, reliable, smart cell phones, kidsâ toys, improved RFID chips and as many other applications, some of them undoubtedly new, that electronic engineers can think up. Here is an announcement by Intel and a brief retrospective of the technologyâs previous false starts in a recent, yesterday, in fact, trade journalâs comment: âPhase change memory consumes little power, lasts far longer than conventional memory, and can hold large amounts of data in a small space. The bits also can't flip or get corrupted easily. The real challenge has come in manufacturing and reliability. Switching a bit from crystalline to amorphous requires pulsing it with an electronic charge or heating it up rapidly to 600 degrees Celsius without flipping the neighboring bits.â Interesting eh ?? ~ si
That genius from Stanford well he went on to found ENER... Tellurium price started 2004 at $10 a pound. By the year-end it reached $22.50 a pound. In 2005 the price quickly rallied to $130-$180 a pound in mid year, then flat down to $100-$130 a pound. In 2006, it once again ran up to $155 a pound and then settled for the year at $50-$75 a pound. So what prompted the rapid price raise? First Solar's (FSLR) CdTe solar panel was one of the demand factors. FSLR produced 60 MW in 2006 and about 20 MW in 2005. At 8 grams of tellurium per panel and 60 watts per panel, that's 8 tons tellurium consumed in 2006 and 2.7 tons in 2005. That's barely 4% and 1.4% of the supply. It's a factor in demand increase, but not the major factor. The main Te demand increase was from other applications. CD-RW discs use tellurium, as do DVD-RW discs. And even later, ReWritable Blu-Ray DVD discs were developed by Panasonic, using a material called tellurium-suboxide-palladium. Recently, Intel (INTC) announced a new type of phase change memory chips to start mass production in later 2007. This also uses tellurium. To understand the background of this break through, you need to read an old article: A 30-year memory problem solved? All those electronic applications mentioned above, CD, DVD and memory chips, relate to the same phase change material called chalcogenide, which contains tellurium. Chalcogenide, the material used in ovonics, is really the cultimation of decades of scientific research on amorphous materials, which was once considered of very little practical use, but of academic interest only. Energy Conversion Devices Inc. (ENER) was funded by Stanford Ovshinsky, who invented the amorphous semiconductor materials and coined the name Ovonics. He has numerous important inventions. Chalcogenide, which is a tellurium containing material, is one of them. Today, after many decades of quiet research and perfection, chalcogenide has suddenly become a very very useful material, having revolutionized and is continuely revolutionizing the whole electronic industry. This phase change material is really HUGE! $40B+ market just in memory chips and we have not even included all the rewritable CDs, DVDs and Blu-Ray DVDs. And it ultimately could also replace the hard disk drives so future computers would no longer need a hard disk drive. A person using a computer with PRAM could turn it off and back on and pick up right where he left off -- and he could do so immediately or 10 years later. Such computers would not lose critical data in a system crash or when the power went out unexpectedly. 'Instant-on' would become a reality, and users would no longer have to wait for a system to boot up and load DRAM. PRAM memory could also significantly increase battery life for portable devices. Is this the Holy Grail for tech?????????? And bad news for a whole bunch of tech companies, SNDK, EMC, etc.... ~ si
I have mixed feelings giving this post a reboot for I am the sucker who rode great $10 point plus victory all the way down to shame and disgrace. Why should I remind you all what a great company this is? Well in the end those of you more in and out than myself will benefit greatly because this damn stock is dirt cheap in my view. More importantly perhaps this game changing tech I spoke about above was licensed yesterday to I believe Intel. I have to get all the info but the future is finally starting to appear. On top of that of course they gave great earnings. The story never changed that's what's so frustrating about this market, the damn story never changed and somehow I'm underwater- it's enough to drive one to drink (at 2:30pm) ENERsoars past $27!! Now +$3.30 The ride back up the ENER channel has begun! ~ stoney
Going to take $44.75 if they give it to me... no need to get greedy on a large lot. You got to love when opportunity knocks! But you got to answer the door... I have to go, guests are coming... I think I might hear Autodesk knocking..... Either them or GSI. Rowdy bunch. ~stoney
I took $45, not bad from $27 but of course I have sellers remorse, it's still running. Looks like $50 today. Shorts being taken to the woodshed. My shed. ~ si