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Lindon, thanks I see what you mean. It's hard not to see ATML as having been a bit clueless/incompetent in their development of Xsense in that they have clearly misjudged the technology landscape and capabilities of the competition and ITO both. Completely agree the best outcome is for CAR to exit and receive royalties and for ATML to retain Xsense for other industries (auto) and take over production .... maybe they can buy CAR production facilities? Maybe at a reduced rate but pay CAR for managing to cover CAR's costs + pay CA royalties on output?
Lindon --- NOT to dispute what you are saying (it is more and more obvious that you are right about Xsense) but here's the other side of the argument. Again, not saying it's valid, or even realistic, but here goes ... is it possible that CAR/ATML's strategy might be to sell Xsense off to a specific device maker, let them 'own' the IP and the manufacturing and use it as a way to compete with others doing the same thing (ie. Samsung, etc)? If Samsung and LG own their own solution, why not someone else taking Xsense on as a proprietary piece and using their existing msucle to fix the manufacturing inefficiencies, or is this just delusional thinking? Lastly ---- is it really possible that Xsense has gone from being an industry defining product with award winning recognition and partners such as Corning to being finished off and ready to be discontinued? Maybe this is the case but it seems really drastic ...
Lindon - unfortunately, the supporting argument to your last post, realistic and up front regarding the state of Xsense, is to look at the latest Nokia tablet announced today - for example. Why does that not include Xsense? It would seem to be the *perfect opportunity for *both ATML and NOK (NOK desparately needs every point of differentiation it can get against the iPAD and ATML needs a big product win). It is incredibly frustrating - hopeless, in fact - to watch products being rolled out that should be *perfect fit while CAR simultaneously writes down the bulk of CIT around Xsense ... and ATML sits quietly on the sidelines doing nothing.
Thanks for the informative posts here (as always). Glad to hear there's encouraging potential in today's news despite the Xsense debacle. The best outcome IMO includes some form of future existence for Xsense w/Carclo able to monetize that.
The main positive is the involvement of a new established broker to help with this mess. A recent fund manager said, "most companies are terrible, don't invest in them." Could not be more true than here with Carclo. Further analysis needed to establish whether their misleading investor statements over the past 6 months vs. the actual write down outcome is worth pursuing, but even if not, at least there is someone additional from the outside (Peel) to help. The less control Carclo mgmt has over the situation, the better - hopefully the whole thing is sold to a bigger entity. Btw, Peel Hunt's 1.30 taget is not particularly inspiring given how badly the shares have crashed. The final hope here is that someone (ATML, Peel Hunt, Corning, etc) figures out a way to restructure the Xsense product in a way that it can either be sold off or reorganised rather than simply written off and discontinued. Nonetheless, what a complete disaster - at least CAR management has taken some losses in their holdings - too bad they don't own more at higher prices.
The price /volume in the stock is saying the news isn't good. Of course at -80% loss in the equity price, that's no secret. Hopefully they have some update from the 'strategic review' but that really sounds like a bit of a joke - aren't all companies always strategically reviewing their assets / business plans? It would be good if the CIty/bankers got involved here and helped influence a buyout/merger of CAR ... anything to get the company into a proper management structure and out of the weeds.
Hi Lindon - thanks for that point re:ITO vs metal mesh. Hopefully there comes a point where ITO can't keep up in terms of performance/features even if it can on price and that swings the pendulum a bit? Alternatively, hopefully there is a way to reorganise Xsense so that it can be priced more competitively?
Speculation from last December on Samsung metal mesh plans .... not sure whether it's relevant =====================http://www.metalbulletin.com/Article/3291527/ITO-could-face-competition-in-touch-screen-panel-market.html#ixzz3I7gDRnFw Follow us: @metalbulletin on Twitter =================== http://www.metalbulletin.com/Article/3291527/ITO-could-face-competition-in-touch-screen-panel-market.html#axzz3I7g5VzGL =================== ITO could face competition in touch screen panel market December 20, 2013 - 15:34 GMT Location: London KEYWORDS: ITO , indium , LCD , touch screens , LG , Samsung Indium tin oxide (ITO) could face competition for its use in touch panel displays after reports that Samsung and other electronics firms are experimenting with a cheaper alternative called metal mesh. Recent South Korean media reports saying that Samsung will start using metal mesh panels instead of ITO touch screens have followed a statement from LG that it will start developing medium and large touch screens using metal mesh made from metals such as silver and copper. Samsung is reported to be conducting tests on metal mesh panels from suppliers and the new touch panels could be ready for release as early as the first half of 2014. The advantages of metal mesh are that it is cheaper, easier to produce, and has lower surface resistance than ITO allowing it to bend easily and so be used for flexible tablet displays in the future, reports...
ITO vs Metal Mesh online debate via IDTech ========================================= http://www.printedelectronicsworld.com/articles/webinar-ito-substitutes-take-off-or-fizzle-out-00007035.asp?sessionid=1 ========================================= IDTechEx are hosting a free webinar on Tuesday 11 November discussing ITO substitutes. ==== Webinar Title: ITO Substitutes - Take Off or Fizzle Out? ====== Date: Tuesday 11 November Presenter: Dr Khasha Ghaffarzadeh, Head of Consulting, IDTechEx Transparent conductive films is a $1.2 billion market in 2014 (glass and LCD industry excluded) and one that is set to grow in the next five years. Indium tin oxide (ITO) fully dominates this market today but its grip may be about to weaken as the application requirements change. New technologies have been developed to meet the emerging needs but none yet are a run-away success. ITO is proving a resilient solution and the incumbent suppliers have moved to protect their positions by slashing prices. The market demand, particularly for large-sized touch monitors, has also undershot expectations, resulting in over capacity in the industry. The industry is therefore entering a crucial period in which substitutes will either win or slowly fizzle out. Our webinar is designed to give you an overview of the technologies, players and markets. In particular, IDTechEx will examine the following: 1. Existing and emerging applications of transparent conductive films and drivers/trends for change. Here, we will examine touch applications, photovoltaics, OLED lighting, smart windows, etc 2. ITO alternatives technologies and advantages/disadvantages of each. Here, we will examine metal mesh, silver nanowires, graphene, carbon nanotubes, PEDOT, etc 3. Business landscape including suppliers of each technology 4. Market projections split by technology Registration We will be hosting the same webinar twice in one day, so please join whichever session is the most convenient for you. Date: Tuesday 11 November 2014 Duration: 30 minutes plus 10 minutes for Q&A Webinar #1: Europe & Asia-Pacific 9:30am (GMT) London 10:30am (CET) Amsterdam, Berlin, Rome 11:30am (EET) Athens, Jerusalem 12:30pm (MSD) Moscow 4:30pm (GMT+7) Bangkok 5:30pm (GMT+8) Singapore, Taipei 6:30pm (GMT+9) Tokyo, Seoul 7:30pm (GMT+10) Canberra Register here for #1 https://attendee.gotowebinar.com/register/2781363458617138433 Webinar #2: Americas 9:00am Pacific Standard Time (USA & Canada) 10:00am Mountain Standard Time (USA & Canada) 11:00am Central Standard Time (USA & Canada) 12:00pm Eastern Standard Time (USA & Canada) 5:00pm (GMT) London Register here for #2 https://attendee.gotowebinar.com/register/3897988984879732481 Read more at: http://www.printedelectronicsworld.com/articles/webinar-ito-substitutes-take-off-or-fizzle-out-00007035.asp?sessionid=1
Thx Lindon - that all sounds good except in the past it has seemed that Xsense has been responsible for all the stock value above £0.90 so not sure confining it to history will allow the stock to flourish on the rest of the business, unless the rest of it does extremely well (ie. 100% growth from here to get us a £ 1.80 share price for example). Would prefer to see an outcome for Xsense that is either a large/profitable OEM deal or selling off the business to someone who can make it work competitively. That may all be too much to ask ....
Thanks Lindon, I see. The failure of Xsense to gain any traction is utterly shocking and begs the question what these companies (CAR and ATML) were thinking in the first place as they made investments in this area. Including the link and content below from the recent FBR Capital analyst; interesting comments about manufacturing at ATML (though not related to Xsense) ============ http://www.streetinsider.com/Analyst+Comments/FBR+Capital+Upgrades+Atmel+(ATML)+to+Outperform/9961456.html ======================We believe the Microchip whipsaw (“Microchipsaw”) provides investors with an opportunity to purchase select semiconductor stocks, and ATML in particular. Early this year, exiting CES 2014 (close to $9.00), we downgraded ATML shares since a number of growth drivers (XSense, PC Touch) appeared to have stalled. While we always appreciated the quality of the company’s core MCU business, valuation kept us sidelined. We believe that the recent sell-off values only the core business, with new opportunities (such as "crypto-memory") essentially “free options.” Also, the gross margin expansion story appears on track and should continue through 2015. Finally, Atmel remains our No. 1 acquisition target, as its manufacturing operations are now dated and as potential acquirers can benefit by internalizing MCU products in newer, more efficient facilities. Stepping back, we think the Street underestimates the true earnings power of (1) a longer-term cyclical recovery in the core MCU business, (2) a resurgence in maXTouch handset touch controllers (thanks to Xiaomi), and (3) new potential opportunities in crypto-memory." For an analyst ratings summary and ratings history on Atmel click here. For more ratings news on Atmel click here.
Hi Lindon - just to clarify, the MSFT reference for Lumia was as an OEM. So based on what you are saying, one could conclude simply that CAR and Xsense both are finished in terms of any growth and the stock could essentially be worthless. Not saying I disagree, but you had posted around Oct 10 that you agreed w/Liberium's 1.60 price target. On what basis - especially viewing the other divisions and then including these write-downs/write-offs? What potential do you see here?
Lindon - in a sense, the numbers will be OK in that CIT represents such a small % of the overall picture. Naturally write-downs/write-offs could have a massive negative affect. It is really hard to know what to make of the situation here. We aren't getting any clarity from ATML about Xsense and it seems to be an inactive/non-existent product at the moment. What happened to all those design wins and positive momentum they referenced in August? There is an analyst report that came out Friday saying ATML was a take over candidate especially due to their ageing manufacturing facilities. Obviously, Xsense not the reference this statement but the idea that ATML aren't a strong manufacturing story is interesting - hopefully ATML and CAR are doing the Xsense review in tandem. Lastly, why couldn't MSFT become a customer for Lumia? That phone seems like the kind that would use Xsense, but again, JMHO.
Lindon - just to add to your intriguing point about Samsung/Corning; after reading that document you posted, and hearing some of the recent comments from Samsung following their earnings release about having to revamp their mobile offering, one might also speculate there is an opportunity for Xsense w/Samsung via Corning ?
Hi Lindon - that link did indeed work, thanks for posting - some interesting stuff in there, especially about product positioning. IMO the ATML/Corning link is the most interesting at the moment as it seems all other avenues for new sales are not progressing. I still think Xsense could be a fit for the Lumia line but that's just conjecture and speculation. Excellent point about Write Down vs. Write Off, thanks for bringing that up.
Lindon - thx, was wondering what they might have said but can't find a thing. Reading between the lines of Laub's comments, what I hear him saying is that Xsense is a failure for ATML and they need to figure out something to do with it to maximise value. 2 options would seem to be in play, do you have an opinion on either of these? Here they are = =====1. Sell it. Maybe to MSFT for Lumia? Maybe to someone else who can ring-fence the tech and prevent competitors from having it? Maybe there's more value there to a smartphone/tablet manufacturer than to ATML who have to compete on component and OEM pricing?===========2. Restructure manufacturing deals and arrangements to make costs more competitive. Is this viable? Can it be done?
From 14 August, 2014 Statement: "At Conductive Inkjet Technology ("CIT") coated film sales have tracked expectations. As announced on 7 August 2014, our partner, Atmel Corporation, is seeing good levels of customer interest in its XSense™ products and continues to win new designs. Our CIT Printed Electronics business has made good progress and we remain focused on the development of a number of innovative customer programs." ========== From 10 October, 2014 Statement: "The board has initiated a full strategic review of the CIT business against a backdrop of lower than expected traction with end customers and continued losses. This review is expected to be completed by our financial year end. The board believes that it would be prudent to carry out an impairment review of the intangible and tangible assets of the business and this is expected to result in a significant write down at the half year end." =============== Reading these both and considering they were made within 2 months of each other, it would appear CAR was most definitely misleading investors about the state of CIT. Nothing changes that quickly (ie. from August to October) and so it would appear that CAR (and ATML) misrepresented the true trading conditions of Xsense and CIT in August and then came clean in October. The next question is whether further investigation into securities fraud is appropriate, IMO.
Lindon - yes you saw things clearly but my point is more about the language used by CAR just a few months ago vs. what they said yesterday. Further investigation needed, but I don't see how they can go from CIT design wins, growth to write-downs in less than 60 days unless some of the statements they made were misleading (ie. lies, potential securities fraud).