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As Carclo might say... In line with expectations... £21.3m write down for Cit... massive increase in the debt pile... future further cash raising wiil be required.... Peel Hunt appointed to advise... everything else all fine... ( including CDS "exciting" development) SR will be reported at year end.

gocarclo... we will get the results of the coated film impairment revue & how much they have written down next Tuesday. There will be no info on the SR for the CIT division until its completed. (31/3/15) Printed Electronics & its FLT technology has a major impact on CDS (for medical diagnostic devices) it has an impact on photovoltaics (& CAR's collaboration with Eight19 & other roll to roll print projects & operations plus any plans to expand it into other markets) and it indirectly impacts CTP because they produce the plastic mouldings for the other divisions. It is therefore a VERY major review and the decisions they make as a result of that review will will determine how best to manage CIT in the future... i.e. streamline the whole of Carclo's operations & incorporate CIT into one of the other divisions, which will mean restructuring the management & staff teams across ALL divisions... OR keeping it on a stand alone basis... OR scrapping it altogether. The first to know will be the middle management & employees during consultation exercises. ALL the decisions AND the effects of those decisions will be completed BY the year end. No public announcements will be made until that has been completed & they have produced a clear roadmap for the way forward... not just for CIT, but for Carco PLC.

Third party report from the Colorado fab says that whilst Atmel's 'chip' making side will continue with its A, B, C, D, shifts with a standard one week shutdown over the Xmas holiday, the XSense side have started laying off temporary operators, have only two shifts going... A & B... and plan to have a two week shutdown over the holiday period. Atmel had zero to report about XSense 3Q in their last results. Nothing about customer interest or design wins. This may or may not indicate that they have stopped the invites & are running the production lines down. Sometimes what these guys do not say is as important as what they DO say! The actual production of XSense will have to continue to satisfy their contract with HP for the three devices on the market. Retail sales of those devices will now be dropping off because they are now being superseded by newer models both by HP & other competitors. Whilst I think all the signs are that Carclo will indeed kitchen sink it, I doubt that will be done immediately & think that is more likley to happen at the year end. However the the 'significant' write down expected with the interims could well be FAR more significant than many investors might be expecting. I also strongly suspect that they have cash concerns & a rights issue is almost certain to be required... even allowing for the fact they increased their banking facilities by another £6mil. Although any rights issue will probably be way of an institutional placing, such is the percievd lack of credibility, the ongoing cash burn, the increasing debt pile & what is now a micro market cap... they may have some troubles even getting that done. I think the 'market' is probably becoming gradually more worried at what level & price any placement will have to take place at. All things considered any discount will have to be much lower than the current sp levels! The sp could well have much further to fall yet! We shall have to wait & see if they go for a placing immediately or wait on it for a while... much will depend on how much more CapEx they see being required for the next six months. ALL only my opinion. I could well be wrong, the rest of the company appears to be sound.

Good find gocarclo. There are loads of so called metal mesh players, the last count by a Morgan Stanley technical industry analyst estimated 190. The overwhelming majority produce low grade quality & are predominantly used in very low grade cheap mobile phones (as opposed to smartphones) in developing country markets. Silver nanowire is an exception & has made it into the mainstream market & was reported used in a Levono 20" AIO PC last autum. also in one of the nexus phones released last year. Silver Nanowire is an ink based solution which is produced by Cambrios Tech (a private loss making co.) Cambrios own the rights to it & the worlds only manufacturer, they supply around 7 ODM's for use in sensors. As far as is known 'metal mesh' is actually one of the silver solutions (no copper one apart from XSense has been reported) the only other copper based player who have so far failed to even start production is Unipixel) It should be appreciated that the 'developing country market' is absolutely huge, it includes large parts of Asia including the Chinese white box market as well as India, Russia, Brazil & other Latin American countries & is why so many players are fighting for a foothold. J Touch are just one such player: J Touch reports increased 3Q14 performance as ZenFone orders increase Siu Han, Taipei; Alex Wolfgram, DIGITIMES [Tuesday 4 November 2014] Touch panel maker J Touch has reported its revenues increased 11.57% on quarter to NT$3.51 billion (US$103.42 million) during the third quarter of 2014 driven by orders from Asustek Computer for the ZenFone. The orders coupled with strong demand from US- and China-based customers helped J Touch reach utilizations above 90%. The company's Taiwan-based facilities ran at full capacity while facilities in China were just short. The company reportedly has order visibility until the end of the year and will also start shipping new metal mesh solutions to customers by the end of 2014 into first-quarter 2015. http://www.digitimes.com/news/a20141103PD215.html This link to Intel's current TS tutorial PDF, this revision of G.Walkers TS tutorials was published in June, explains all the relavant competing touch solutions, plus loads more info on the touch industry in general http://www.walkermobile.com/PublishedMaterial.htm

AirFluSal Forspiro is the direct generic replacement for GSK'S Advair, one of the four top selling drugs in the world & accounting for over $8 billion per year (25% of GSK'S global revenues) whose patents have now ended. The drug is administered by GyroHaler, a joint device development project between Vectura (VEC) & Carclo Technical Plastics & who now manufacture the inhaler. Sandoz is responsible for seeking world wide Approvals apart from USA. A major (unnamed) American pharma company were appointed for that territory & that is ongoing. Approval in Baltics for innovative respiratory inhaler AirFluSal(R) Forspiro(R) -- Regulatory authorities in Estonia, Latvia and Lithuania grant marketing authorisations for AirFluSal(R) Forspiro(R) -- Approval for 50-250 and 50-500 ug dosage forms -- AirFluSal(R) Forspiro(R) already launched in four European countries (Germany, Denmark, Sweden, Norway) and South Korea. Marketing approval has recently already been granted in Portugal & recently in Latin America (Brazil) Chippenham, UK - 4 November 2014: Vectura Group plc (LSE: VEC; "Vectura" or the "Company") confirms that our partner Sandoz, has been granted marketing authorisation by the pharmaceutical regulatory authorities in Estonia, Latvia and Lithuania for AirFluSal(R) Forspiro(R) , an innovative new inhaler for patients with asthma and/or chronic obstructive pulmonary disease (COPD). These latest marketing authorisations by the three Baltic states, which are members of the European Union (EU), mean that AirFluSal(R) Forspiro(R) has now been approved in a total of 13 European countries, as well as South Korea and Mexico. The product has been launched in five countries to date, including South Korea. The three Baltic states all approved AirFluSal(R) Forspiro(R) in the 50-250 and 50-500 ug dosage forms. AirFluSal(R) Forspiro(R) offers the proven combination of salmeterol (a long-acting inhaled beta-2 agonist) and fluticasone propionate (an inhaled corticosteroid) in an innovative new device. The product's safety, efficacy and equivalence have been proven in multiple clinical trials. Vectura initially developed the VR315 product and created the design of the innovative inhaler, before licensing the asset to Sandoz in 2006. It was subsequently developed in collaboration with Vectura as AirFluSal(R) Forspiro(R) by Aeropharm GmbH in Rudolstadt, Germany, Sandoz's global respiratory Center of Excellence. The innovative and intuitive-to-use design of the inhaler was awarded the Red Dot Product Design award in 2011, an internationally recognised quality seal awarded by the Design Zentrum Nordrhein Westfalen in Essen, Germany. The device includes multiple feedback mechanisms such as visual control features, which help reassure the patient about dosing, a simple lever arm to load the dose, and clear and accurate feedback on remaining available doses. http://uk.advfn.com/news/UKR

The idea WAS a good one at the time. No-one could foresee that ITO on film would be invented & ALSO once it had been that the SNR issuse could be overcome & cause the rapid around 50% decline in ITO prices OR that In-Cell in particular could be technically advanced for use in larger form factors. It had always been assumed throughout the industry, not just Atmel & Carclo, that both these issues were a big no no. Yes, Atmel have been recognised as a take over target in the microchip industry for quite sometime & there has been a great deal of consolidation & manoeuvring going on in that industry, mainly due to the advent of IoT (Internet of Things) which will be a multi trillion dollar industry. Although WE compare Atmel against Carclo as being a big company, in the microchip industry they are a minnow & will probably always be at risk from the big players. Its easy to apportion blame with hindsight but if it HAD worked... & with HP getting on board at one stage it came as close as a gnats whisker to doing so... the story would have been vastly different. Its only circumstance & the ability of the established players to fight back that stopped it in its tracks. Carclo haven't mislead anyone, even as recently as June they was insider buying... no way would that have happened if they thought that a Stratigic review & significant write downs were just around the corner. The rest of the company is doing ever so well. In August they reported 3 supercar wins THIS financial year. By October 10 th RNS that had gone up to 4. This is a VERY lucrative industry & they have excellent visibility going forward. CTP is expanding rapidly & the two American new customers, Acrriva Diagnostics & Accelerate diagnostics, are major players. Defiantly not minnows. Then of course there is CDS. IF THAT turns out well it has ALWAYS been known that it has the potential to be even bigger than what was envisaged for XSense. That however is gonna take time. The first half has been excellent for the rest of the company & its usually the least lucrative time of the year. The busy time is the next 6 months. Get these reviews over, confine XSense to the history books & IMO the future is one of a continuing growth story. At 90p a go anyone getting now is on the ground floor... IMO the only way is up!

Hi gocarclo... yes, as I said before I think XSense will be finished, but its not finished yet so there is STILL a faint hope IMO that something surprising may come out of the woodwork during the next 6 months. I said earlier in the year that my estimate of fair value for the company without ANY XSense potential built in is around 90p. Since then we have had a pretty much confirmed improving outlook for the core business. I think therefore that a more realistic sp level is now probably around 130p which it was up untill shortly before we learnt the requirement for a write down. IMO 90p reflects the unknown 'signicance' of the impending write down, so I'm not expecting much more downside to the current sp level after the interims, the recent market cap reductions come some where close to what the intagibles are worth (approx £20 million) but the big unknown is Printed Electronics & what is going to happen to that. Atthe moment it seems there is no market for it & my impression is that they are trying to invent one. Digitimes Research: Greater China on-cell touch panel shipments expected to grow 91.4% in 2H14 Jen-Chieh Yang, DIGITIMES Research, Taipei [Wednesday 27 August 2014] On-cell touch panel shipments from makers in Greater China are expected to grow 91.4% in the second half of 2014 compared to the first half of the year as makers greatly improve production yields, leading to pricing and technological advancements. Of the percentage, about 80% will be from Taiwan makers, according to Digitimes Research. Overall shipments of ITO replacement touch panel solutions, including on-cell, metal mesh and silver nanowire from makers in Greater China are expected to grow in the second half due to improved yields as well as to increased development between Greater China touch panel makers and TFT LCD makers towards creating new solutions. More notebook vendors are looking to use metal mesh technology in notebook and AIO applications, which was pushed by China-based O-Film in 2013. The technology is now spreading into more large-size applications and even more small- to medium-size products. J Touch and Young Fast are among some of the Taiwan makers who are expected to push metal mesh touch products for such applications further into the market. Additionally, as TPK and Nissha increase cooperation and improve conductivity for the technology the two makers expect to expand production of silver nanowire touch technology in the second half, primarily for 5-6-inch applications supplied to vendors in China for entry-level and mid-range handsets.

gocarclo... they said a 'significant write down' is liikley to be the result of the impairment review at half year end. The CIT intangibles alone are capitalised at over £20million. Coated film has had no increase in adoption & has been loss making & had higher amortisation charges due to lack of sales & there have been continuing development costs. The Printed Electronics side has had moving & set up costs & as had zero traction. Cash has been burning throughout the whole CIT division. CDS has also been burning cash & will be expected to continue to do so. The impact will on the bottom line will probably account for around five years worth of pre tax profits. Much depends if they take the bath in one hit or split it & have more write down at full year time! XSense is not & never has been intended for mobile phones. Atmel have ALWAYS made it clear that the price & tech differentials were in the large form factor screens. That is now more the case than ever due to the development of in-cell & on- cell. Carclo have since said that the price premiums that were once envisaged for XSense in the large form factors are no longer available. THAT is due to the development of in-cell & it can now ALSO be used in larger form factors. As a result even though margins have been cut to the bone, they cannot sell it! There is absolutely no way MSFT will divert into sensor manufacturing even without all that. If they want a sensor they buy it in like any other OEM. ONLY a vertically integrated company company (& that means one that aslo manufactures the LED panel) has ANY chance of making a go of it. BUT the LED makers use in-cell because In-cell is incorporated in the LED layer! LG’s battle to beat the bezel is almost complete after it debuted a smartphone display that features the world’s narrowest bezel that should find its way onto devices very soon. The firm’s display arm has unveiled a full HD smartphone display with a bezel measuring in at just 0.7mm that is narrower than the thickness of a credit card [0.8mm]. LG developed the new display by using its “Neo Edge” module processing technology and “Advanced In-Cell Touch [AIT]” technology that allow the bezel to be shrunk down considerably. AIT meanwhile, decreases the need for bezel space because the touch panel is a part of the LCD module. LG plans to start mass producing the display panels in November and its first customers will be in China before the remainder of the world in the not so distant future. Read more: http://www.itproportal.com/2014/10/30/lg-bashes-the-bezel-for-new-full-hd-smartphone-display/#ixzz3HwYmKSAc

Mmm... dunno, yes Samsung are suffering & have reported a 60% decline in pre tax profits, which is a massive fall back... but Samsung have their own propriety sensor, Super AMOLED (SAMOLED) which is an in-cell solution & rated as the best screen on the market. They also make an on-cell solution (AMOLED). Apple's propriety retina LED screen is also in-cell & the new iphone is rated as the best LED screen on the market & second only to SAMOLED. In-cell solutions use ITO. IMO there is no way MS will get involved with sensor manufacturing, they make enough losses on their manufacturing side as it is. I can see them eventually getting out of hardware completely or at least splitting it off. In any-case if you read that Corning document you see that XSense/GG is... as Atmel have always stated... intended for large form factors. That is where the differentials are for XSense. Carclo also said in their profit warning earlier this year that the price premiums that were once envisaged for XSense in the large form factors are no longer available. THAT is where the problem is!!! Atmel's sensor operation will only get sold if someone wants it as part of a fully integrated concern... IF it CAN be made price comparable with all the rest... then IMO that is the ONLY way it can be done otherwise it remains loss making. As for the operation as it stands I think the only hope... & its only a very faint one... Is something might come out of the GG4 collaboration. That Corning document came out last May... but with Apple now fusing the top cover glass to the LED glass & producing a 6.1mm thin tablet that still allows them to use a much cheaper ITO in-cell solution that has been rated as the best LED screen ever produced then the potential for an XSense/GG4 combo may already have been left behind the curve. For the moment we shall have to await developments... Atmel have said they are "actively" looking at ways to get a return on their investment & there maybe in there somewhere... some options with Corning in Korea in the wind, but unless Atmel can find a buyer who wants it as part & parcel of an integrated production & who is willing to try to compete with the OGS in-cell/on-cell makers... OR something comes out of the collaboration... & even then its not going to set the world alight... then XSense is finished IMO.

In October last year Corning announced the purchase of the full ownership of the precision materials joint venture with Samsung. With the deal Corning fully owns the LCD manufacturing operations in Korea, supplying Samsung with the LCDs. If Atmel... given that Corning believe XSense is a fabulous 'fit' with their new Gorrila Glass 4.... can in someway join in with this operation then they would be well on their way to having some semblance of a vertiaclly integrated company. Carclo would simply ship the rolls of coated film to Korea. GG4 is reported by Corning in THEIR 3Q call yesterday... as having a revolutionary big step change in its break-ability. MY 'take' on these comments is that OEM's can either have it in normal 0.4mm glass with the new revolutionary 'break-ability OR elect to have it "dramatically thinner" & retain normal GG3 break-ability. Its the 'new' thinner option that XSense is said to be the ideal partner for it. "Now, we are planning to launch our next generation of Gorilla Glass on November 20. I can’t spoil the launch, but it does promise to have dramatically improved performance characteristics and our customers are already integrating this glass into the new products" So GG4, when we roll it out, you will see a very dramatic improvement in its damage resistance. And then the question will be will our customers choose to spend that dramatic improvement on improved drop performance for the same thickness or will they choose as they have every other time to go dramatically thinner and keep about the same drop performance. We haven’t seen that be adjudicated at all the different customers that we have engaged with yet, so it’s still a little too early to call which direction they go. No matter what, it’s a step change above GG3 and widens the gap pretty significantly versus any competitive offering. If this link to a Corning document works it shows how Corning believe the combo has such great potential. http://317d462d97c0f60cc4a8-f82dbb2c4b72989b4dd23857c08d6cc5.r13.cf2.rackcdn.com/local/uploads/files/Advancements%20in%20Touch%20Panel%20Modules%20through%20Atmel%20XSense®%20and%200.4%20mm%20Corning®%20Gorilla®%20Glass_2columns_2014_05_23_v2.pdf

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