Member Info for Qd22

If you did you've got lucky and it's time to open a can...

Jan 22 I posted this: "Finally [ran out of space on the other], if you search 'cREO' [which stands for crystalline rare earth oxides] in that results report from last year you will find that cREO appears to be fundamental in several areas.

They bought the cREO technology and patents from Silex Systems in Australia, for US$5million last year, plus royalty payments (of I believe to be between 3 and 6% but as always DYOR, for everything). As far as I can tell Silex has revenue of just AUD525.7K. The SP appears to be .16, down from over 2 five years ago, and much higher before. Market Cap AUD 27.27M. They have not managed to commercialise their core asset, the SILEX laser-based uranium enrichment technology, for which they blame Fukushima and its aftermath in the nuclear power world. If they can stay afloat till cREO royalties come in from IQE - and they are sitting on the above US$5m in IQE shares - they could do very nicely indeed.

For honesty's sake: I have bought some, a small holding. If you choose to do the research and I've got the above wrong, please tell me!! Thanks for listening, all. ATB"

Overnight they were up 47%. Not thanks to IQE royalties but because it looks like they have found a large partner with whom to commercialise their laser uranium enriching tech.

http://www.silex.com.au/Silex/media/Corporate-Governance/SLX-Silex-and-Cameco-sign-new-Term-Sheet-with-GEH-060219.pdf?ext=.pdf

It looks like they use uranium mining tailings: there could be a lot of it about, causing a lot of problems. I don't know, but I'm a happy budgie smuggler today! And I still think the IQE royalties could make a big difference to them...

I just wonder.... if there might be a reason they might want to keep a low profile for a bit. When the figures start to change, which I am sure they will, then keeping a low profile will be impossible - and PR won't be needed. Meantime they might be quietly getting the ducks in a row. Just a thought.

Yes, WELCOME, Mr Pullen.

Gotrader it's great to hear you say the recent fluctuations are "Certainly not the short positions we can see. Neither is it T Rowe Price." I know nothing about shorting or short term trading, and you look very good at it. For me as I've said earlier I've recently flung the kitchen sink and all my precious camels at this recently because

1. It appears that IQE are at the base of the chain for all the mobile camera manufacturers, so they appear to really have the market share they claim.

2. The EU confirmed that they regard compound semiconductors as "of strategic importance for the EU" by breaking their own rules to allow up to €1.5BN in state subsidies in this area. That's a LOT of money and it's the ONLY time they have done it.
With 1 this means that IQE has a tremendously strong position in a technological area that is becoming vitally important. And it is going to be fundamental for many things, not just mobile phones.

3. The new machines are in - for a vast step up in production - and qualification procedures for them must be nearing an end. Farrugia has confirmed that some are actually producing wafers now, and IQE that 12 companies are in the qualification process on the machines. So if all goes well we will be seeing actual changes in the figures in March, or autumn at the latest. Shorters 'beware the Ides of March'; and September too. If I understand the way shorts work they will have to come out, and that will put an upward pressure on prices.

I am NOT an experienced investor, but perhaps others have been joining the same dots that I have. And I have been invested in IQE from below 18p, so for quite some time: and that kind of time does help you to get your mind round things.

I've been encouraged by IQE recently. The not-so-great recent TU hardly touched the SP, nor did the news from Apple. Great, but today has as you say knocked the shine off a bit. Bit like the England bowling.

I've been reminded of an article about junior miners I read ages ago. A company makes a find, and of course the sp rockets. But then there's a couple of years when not much is happening on the surface: they need to drill new holes to confirm the find, get more info, find how much further the lode spreads, plan how they can actually get it out of the ground, get permissions, etc, etc, etc. In that time there's just a dribble of jam tomorrow news, no money coming in, and a whole load going out. They are setting it up to go into production eventually, or get bought up by one of the big boys.

In the meantime it's a vacuum. So the SP plummets again, almost back to ground level. Its only when it really does near production, or a T/O, that things turn around. This time with a very different brand of shareholders, not the quick-buck crowd, but long termers. This long preparatory period with little progress, news, or money coming in, is of course a natural time for the SP to wear down, and the lack of news must be ideal for shorters. What changes it is when the solid results start to come in.

Some of the above is my interpretation, I read this ages ago, but it seems like IQE has been in very much the same position. The gold strike for IQE was VCSELs being picked up for mass consumer applications. (They have loads of other stuff but that's what blew the SP out of the water). But it was only one company and due to practicalities the over-production as happened was an easy mistake to make. Better that than the other way. Before it can go any further (a) they have to get the production facility set up, and (b) all these qualifications for other companies have to happen. Both take a lot of time and naturally led to the lack of news flow and slump in SP - and the ideal space for shorters.

But sometime the mine starts to produce. In March last year the final results commentary kept pointing to a time lag of 12-18 months. 11 months on 10 machines are in, and 12 companies are actively qualifying them. Twelve. That is a lot, and a much better risk profile: and shows our strength in the market. Meantime wireless - still the main source of revenue - is exceeding expectations, particularly through the new tech GaN; and infrared doing very well too.

The time of no news is coming to an end. If I was a shorter I would be getting very nervous of the March results, and would definitely want to be out for September. I think that's why the not great news has hardly touched the SP recently. As for Friday, OK, but don't forget the major rise we had on Thursday - just got ahead of ourselves, and traders took profits.

I think we've got a great year coming.

IQE: junior miner!

Quote from a post in July:

'What concerns me is that they may be near the end of their resources, and not getting contracts. Surely there would be a great temptation for a final fling: push Get 3 out ready or not, within a few days announce a wonder deal in their ideal space - but still subject to finance, hope the attention makes them serious players for a time, they pull in some real contracts, and then later "Oh dear, finance failed on this one, but we're going great on the others..." Just a temptation, I'm not saying they have of course: for obvious reasons. DYOR, etc.

If they get some real contracts, great. At that point I'll be investing my entire lottery jackpot winnings [lol]!! Until then, well, I'm still watching carefully. ATB, everyone. '

Still waiting. I agree with you both that there is just such enormous potential here: but I don't trust the people at the top. Trouble is, last time I pulled out of a company because the management didn't seem to have any integrity it more than soon after.

Well, I have it so for now I'll hold it. Not the best argument!

Figures all look to me - almost figure-blind - awful. We're just off the lowest it's been since 2012. These contracts need to really produce the goods: but they do look good real contracts (if at least partially already factored in) and this is an important area to have a toehold in.

So it's another one of those ones that COULD happen. Maybe jam next week - if you're good.

The worrying thing is the question of what global circumstances would make this one fly? War?

Thanks, Basscadet. Will get to it when I can.

Great to see Rivaldo's post re MACOM's new product, a GaN-on-Si power amplifier. Looks like GaN-on-Si may be beginning to charge.

Finally [ran out of space on the other], if you search 'cREO' [which stands for crystalline rare earth oxides] in that results report from last year you will find that cREO appears to be fundamental in several areas.

They bought the cREO technology and patents from Silex Systems in Australia, for US$5million last year, plus royalty payments (of I believe to be between 3 and 6% but as always DYOR, for everything). As far as I can tell Silex has revenue of just AUD525.7K. The SP appears to be .16, down from over 2 five years ago, and much higher before. Market Cap AUD 27.27M. They have not managed to commercialise their core asset, the SILEX laser-based uranium enrichment technology, for which they blame Fukushima and its aftermath in the nuclear power world. If they can stay afloat till cREO royalties come in from IQE - and they are sitting on the above US$5m in IQE shares - they could do very nicely indeed.

For honesty's sake: I have bought some, a small holding. If you choose to do the research and I've got the above wrong, please tell me!! Thanks for listening, all. ATB

Includes this comment (from the Compound Semiconductor Centre):
"Industry analysts forecast that the GaN power market will grow at up to 55% per annum over the next five years, driven by power supply segment, or 93% if adopted for wireless charging in consumer electronics*, and so there is an excellent opportunity for innovative epitaxial products to unlock this growth potential."

This was in the Final Results commentary last March (20th):
"Power
Gallium Nitride on Silicon (GaN on Si) is driving a technology shift in the multi-billion dollar power switching and LED markets. IQE has continued to push the technology boundaries and is making rapid progress both technically and in developing commercial relationships in the supply chain. The power switching market alone is approximately 3-4 times the size of the current wireless PA chip market, and represents a major growth opportunity for IQE.  IQE's patented technology, cREO, provides a significant competitive advantage in this space. We will highlight new technologies as these reach commercial adoption."

And this was in the trading update last November (13th)
"Wireless wafer revenues for FY 2018, on a constant currency basis, is expected to grow at 8%, above the top end of the 0% to 5% revenue growth guidance, given in the Company’s H1 trading statement. Wireless demand, especially for GaN products, has been strong and capacity was retained through Q3 2018, to continue to address demand following the replenishment of inventory channels depleted during H2 2017."

Do these dots join? Is the above guidance growth in demand for GaN products (bottom) due to the power switching market on GaN on Si (middle) in which up to 55% growth per annum is expected for the next 5 years (top)? Looks plausible: but they did say (middle) that they would highlight new technologies as they reach commercial adoption. If so they haven't. However as we all know communication has been poor. They seem to have other things on their minds.

I've flung the kitchen sink (and my whole herd of camels!) into this recently. If they have been telling the truth in their annual results analyses there are so many possible areas for major growth.

If you look at the "Outlook" section of last years Final Results (March 20th) it did appear to be steady as she goes for the rest of 2018 - which has been correct.

But then "Potential for strong growth in 2019 and beyond" was labelled under 7 bullet points, several of which seem to be multiple. Judge for yourselves if any of those might be about to pop, but if just 1 or 2 of those come good in 2019..... Well, the market is down, and within that so is IQE.

Alas.... no more camels. :)

Caveats.

Looking at this more carefully it does NOT look to me like this money is now there to be spent. It seems to be a permission for member states to put their OWN money into supporting projects that are of common European importance. I guess state support is normally illegal, breaking competition rules, BUT where the issue is seen to be of real importance to the EU as a whole now it is allowed - up to a certain limit, a huge €1.5BN in this first instance. It looks like it also ties companies receiving such support together into a commonality of some sort.

http://europa.eu/rapid/press-release_IP-14-673_en.htm. That includes:
"The European Commission has set out criteria under which Member States can support transnational projects of strategic significance for the EU and for the achievement of Europe 2020 objectives, in line with EU state aid rules. This is part of the Commission's State Aid Modernisation (SAM) initiative, aimed at fostering growth and competitiveness in the EU. The communication will enter into force on 1 July 2014.
Commission Vice-President in charge of competition policy, Joaquín Almunia, said: "The rules on support for important projects of common interest give Member States a tool to address market failures in financing large transnational projects of a strategic importance.""

Thus it raises big questions about exactly what the EU is actually doing here. Are they terrified to see IQE leave their shores, along with its vital tech and patent bank, so they want to tie them in in case of Brexit happening? Cherry picking the goodies? And it's still the UK government and taxpayer who has to pay! (But they can now support rival research with state funds elsewhere in the EU, now legally.) Remember it's the only IPCEI to have actually happened: and the order allowing them has been in place since July 2014, nearly 5 years.

This all makes me wonder.....

HOWEVER, it still says vital things to us.

It says that this tech is VITAL. It is "of strategic importance for the EU". The IPCEI gives "Member States a tool to address market failures in financing large transnational projects of a strategic importance." Quite how CS tech is a 'large transnational project' I'm not sure BUT they are clearly willing to stretch the meaning of their own rules to do whatever they are doing. Nor can I see that IQE has been actually failing to fund its own research, so who is this really for?

But it also says the UK government can now directly support IQE's research.

It also emphasises for me that IQE tech is "strategic", and is something the Chinese, Russians and even the friendly but ruthless Americans would do a lot to get their hands on (and that the last thing we want is a takeover). I've always been suspicious that all was not quite what it seems.

All in all good, especially for the short term, but if I'm understanding it right not quite what I thought it was.

In November I think it was SlowRoll who shared this link:

https://www.i-micronews.com/events/webcast/eventdetail/456/-/vcsel-after-20-years-has-the-technology-finally-found-its-killer-application.html?utm_medium=email&utm_campaign=PR_IR_LED_Laser_Applications_Market_report_KNOWMADE_YOLE_October2018-2

It's a long and pretty technical talk by outsiders with thick French accents about the development of VCSEL, which probably few got to grips with. But there's a new talk beginning about 33 mins in in which the first slide is put out to emphasise the complexity of the supply chains for the 5 main OEM's 3D cameras: over 20 different suppliers at the 6 different stages.

But the first stage is the epitaxial wafers and for 4 of the 5 OEMs there is only ONE supplier: IQE. The 6th OEM, Huawei, seems to be the only one partly supplied from one other company.

I recommend a look. It really emphasises the near total dominance of IQE in their field: and as I said this report was nothing to do with IQE, it was not plugging them. This just happened to be what the supply chain slide showed.

The question for me since then has been: just how important are these compound semiconductors really? Is it just a small inconsequential field, with possible other solutions crowding in from outfield that we do not hear about? You'd have to have a good scientific and technical grasp of the whole area to answer that question: but if IQE has this dominance in this area then it's the vital question.

The EU has kindly just answered the question for us: 1.75 BILLION euros, and counting.

This is the FIRST "Important Project of Common European Interest" to be awarded, and it is huge, it is SUPER MASSIVE.

Thank you, SlowRoll.

Been there so often, Trek!

This is absolutely standard Motley marketing: pick a known share that's had a fall, give it a further good kicking, then say "Ah, but if you follow this link and/or subscribe to us we can point you in the way of shares that will make you a millionaire. Ahem..."

Pretty foul, and it has consequences. Says all you need to know about them.

As a PI I tend to buy according to what cash I've got so my purchases tend to come out as random numbers of shares. I've sometimes noticed elsewhere that the biggest purchases, which might be institutions (?), are far more likely to be round numbers of shares. So I was struck just now by how many purchases seemed to be larger round numbers. However the sp is so low that the monetary values are still very small - and the sells are in round numbers too. So the dream of institutional steak (sic!) building comes crashing down.

Any thoughts on what is happening, or is my observation simply way off anyway?

We do try to put 0.7% of our GDP into foreign aid, and I do often wonder why we aren't getting a slice of that. It would be one of the best possible things they could do for Africa, not giving money but enabling growth, development, stability and most vitally of all education. It would be far easier to prevent the money going into corrupt politicians and 'businessmen's' pockets, or any others: you pay Avanti for the supply and the benefit is there. And in the long term it would save many millions in lowering the costs and attractions of illegal immigration. Why don't they? You begin to wonder if they really want a prosperous and stable - and competitive - Africa. Or maybe those benefiting from corruption (and maybe even aid agencies) have too much sway.

Topped up @ 57.33. Mad?? We shall see. When people are saying "Buy! Buy! Buy!" it seems to me a sign to sell, so maybe now's the time to buy. I regretted not buying last time it was in the 50's.

PS to the last post: I think what is on the edge of the disc must be wastage, so the larger disc gives the smaller edge wastage. But my pre-O level maths was exactly that! Lost a decimal point :)). The larger radius gives a 2 times larger circumference, rather than 20 times. Apologies.

I can do with a whole lot more of this waffle. If I understand it right it translates to one very simple word: SCALE.

And that is scale that competitors do not have.

Pre-O level maths says they will now be close to being able to make quality disks that are over four times larger than any competitors, and have proportionately 20 times less circumference. Waffle?

Peter Maskell buys nearly £35k shares. He was appointed a year ago, so it's not an automatic gesture of loyalty: he's obviously careful and he's waited until he really knows the company - and now comes in with a good solid purchase. And it not as if he's not experienced:

"Peter Maskell is 59 and after studying Electrical and Electronic Engineering at Kingston University he joined Philips Electronics where he worked for 37 years.

For the last 20 years he held a number of senior management positions in both the UK and Europe. Â His last position at Philips was as Chairman of the UK group which had significant business interests in both the healthcare and lighting sectors.

In the last 5 years, he managed the transformation of Philips' UK Lighting business from product supplier to a full service, systems and solutions provider, thus fully exploiting the opportunities and benefits offered from the advent of solid state LED lighting and fully connected digital solutions beyond just illumination.

Peter is also a non-executive member of the board of the University of Surrey."

Yuh, I like it.

Yes, that's helped tip me back over the edge today, even if it may be a bit soon. BREE was good to me for a year or two, but sold end of last May for a major purchase and seem to have hit lucky with the timing.

It feels good to be back! :)

Hope you're right, I've taken advantage of the drop today, in a small way. Was watching it anyway, and fundamentals seem strong, though I don't like falling knives!

But yes, it does seem a big drop on this news, for a company doing so well.