Member Info for Tracylied

What a mess from 16.28 yesterday. Looks like two sells in the end.
Nearly a month since we were told about the closing legal discussions on a important first contract for a new product.
I suspect that if they were motivated to support shareholders they could find plenty to talk about.

Many ASICs products started as prototype in the lab with FPGA . When they go to production the FPGA is replaced with their own Silicon. They just take the bits they need for the product. Ethernity may do the same but rather than ditch the FPGA keep it for future redevelopment. Once installed they can talk to it remotely. However the product can be ASICs like in purpose.
I mean by that changing the drive. So Ethernity make a solution for DU and it's manufactured. A buyer wants a DU solution so Ethernity supply and build the virtualization for that product.
The difference is that normally Ethernity would start with a brief and design up.
Working ASICs like means much faster deployment.

The problem is that Ethernity solutions run on their own kit, this is why it's in the open domain. This is how Ethernity has unique products they are not barriered by in manufacturer hardware. Currently they can build in their lab or subcontract the lab work if volume allows. Ethernity build what is essentially prototype hardware.
When production orders arrive they will respond. Currently there's huge capacity for outsourcing.
Much of the portfolio is virtual or code that can run on any FPGA appliance.
It's important to understand the model. Ethernity make solutions for OEMs largely. These are not plug and play boxes they are on SoC or cards. They have a very firm grip on what they do.

Dallo I don't think that is the plan at all. They are not an ASICs provider. There has been many contracts with devices in the thousands. In the last two years about 200000 installations. Much of the portfolio is run on aceNIC 100 but that comes in almost infinite variety of ports and non standard options. I see the DU device as the only possible mass volume production and ASICs like. This is because the magic is in the virtual.
I see a major fpga manufacturer taking the DU device under licence for manufacturing.SoC, and devices like OLT boxes will be outsourced as I am sure that they always have been. I don't see Ethernity ever building a production capacity for that.

Ethernity has delivered many contracts. All required manufacturing and so far they seem to have managed. Scaling up is a challenge nothing more.

https://www.made-in-china.com/manufacturers/network-card.html

Several thousand here with manufacturing facilities. Similar in India. Israel has around 40 similar.

The 700000 installed devices were clearly assembled somewhere.
I have a friend who owns a motorcycle tracking business. They produce GPS devices in India through a contract OEM. Minimum run 2000 units. I suspect that this is a similar situation.

Certainly not building a chip factory. These are builds that they have prototyped in house. The requirement for assembly are nothing like the requirement to build the fpga which comes as a finished product. This is a component assembly production. This is the same level of challenge as assembling a WiFi router.
Yes it is specialist but volumes will be modest and certainly a efficient production capacity can be built for a couple of million.
I don't think that Ethernity would design anything that cannot be financially viable.
They have managed to produce several hundred thousand devices

I don't think anyone minds investment in manufacturing and inventory for manufacturing. Outsourcing the license to manufacture with a nice per unit royalty will also be very good. In many cases ACE-NIC100 will have virtual appliances from Ethernity sold onto them with long term returns.
The ACE-NIC100 and versions thereof will gain a large slice of the fpga SmartNIC market. I think that is becoming quite obvious now. Xilinx should be wanting to add value to their FPGA by adding Ethernity to it. We could even see a go to market collaboration very soon. The long term relationship is there already.

I keep saying soon. Soon really is soon now.

The manufacturing elements of what's going to be a very steep growth line are a huge challenge.
It looks very likely that ramping up production of SoC for Tarana, ACE-NIC100 for multiple contracts, DU, UEP-20 and UEP-60 will all happen simultaneously.
Whilst the UEP device production can go to India the rest is very much work in progress. I assume that Ethernity has a plan. Communicating that to the market now would be very valuable as it will immediately demonstrate that potential of the business.

The DU yes.
ACE-NIC100 they have arrangements already for production. I don't know what scale that can manage. Certainly next year orders for ACE-NIC100 will scale from a few hundred to thousands.

I forgot to mention there's a substantial body of engagement and work in the pipeline. The company are extremely busy and this generates a constant demand for talented people. Ethernity have expanded their human assets and will continue to do so. I suspect that they will create a US footprint as well later this year and that means investment.
Ethernity are going to be big and that costs.

If as expected they are cash neutral H2 this year the need for cash depends entirely on how the grow.
Example. The DU solution. This will create mass orders starting in a few months. Probably 20000 FPGA based DU units in 12-18 months. If Ethernity establish a production facility they will need to raise a few million. If they outsource the hardware to a fpga vendor like Xilinx then they won't. The options really depend on the volume.
As for day to day running costs I suspect that they are largely covered. R&D is the unknown. Ethernity are completing UEP and DU work and whilst these are likely to generate substantial engagement payments the timing may not be convenient.

These are positive funding elements and signal success.
Funding for more executive toilet paper is not on the agenda here.
If you are not in contact with the company I suggest that you do. If there's going to be some funding requirements then existing shareholders will be involved in my opinion.

The joint product with Tieto is a huge deal for Ethernity.
"Ethernity currently proposes its ACE-NIC100 as a functional acceleration card for UPF software, however in collaboration with TietoEVRY we plan to propose a joint offering that will include the UPF software element that allows us to supply into a larger market for Private 5G market and IoT"
As we have seen in Asia a Telecom provider is using ACE-NIC100 and creating their own UPF. That is trialing in the next few months and deploying next year. This will generate orders for a few thousand ACE-NIC100 units immediately.
In China a OEM is using ACE-NIC100 and creating their own UPF to deliver into the Chinese market. This again is trialing almost immediately and sales will commence in 2022. This will no doubt result in multiple deployments and production orders for ACE-NIC100.
The Tieto deal is very different. Tieto and Ethernity build the UPF and sell into the global market as a ready product. This is either with Tieto as Integrator or not.
Most Telecom and don't have the depth to build their own UPF.
Tieto has huge global reach. This collaboration has been running for a year already and they go to market early 2022 aimed at the private 5g market.
Previous I was expecting the private networks to be smaller but that's not the case. Dish is a private network and we'll see many more, hundreds probably thousands in the next few years.

Royalties currently account for about one third of revenue. That will increase in value but as a percentage may reduce. There's lots of services and design income available. Recurring non royalty revenue will feature in deals moving forwards. These will be in the shape of tech support, agility support and optimising performance. Hardware and appliances are hard to define often. Appliances are virtual and physical.

Dallo several buys marked in red so it's actually fairly balanced. I have to assume that there's something in the background.
Despite the fact that it's not a sell off this is still ground that has to be made back.
It's always darkest before the dawn and I have been here before.
The market is always stupid and the last to see what's actually in plain sight.

We still have a seller then. Seems like suicide to sell now.

The collaboration will produce a joint product very soon. This will be sold by Tieto as Integrator or OEM. The deal for Ethernity is market access through a huge global player with clients engaged.
It's another strand maturing in the background.

I think that they could part it out for £150m as it stands.

The whole sector is about to explode. Those that will gain the most are those without a current market like Ethernity. This isn't just more sales or more revenue it's nothing to something big.
The share price maybe be slow and ******ed but it's going to go soon.