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Editorial: CS & SSL Stock Portfolio Inches Up with Color Kinetics the Best Performer
... Jo Ann McDonald, author of "The McDonald Report" and holder of a modest stock portfolio of publicly-traded companies considered typical leaders in the compound semi and solid state lighting industries (about which we report in CS News and LIGHTimes) shares with readers the results of August activities. Overall, there...
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September 9, 2005...JDS Uniphase has signed an agreement to acquire Agility Communications, Inc.,
a provider of tunable lasers and transponders. JDSU says the acquisition will
help give it a broad, end-to-end optical network portfolio. Agility communications
is a privately held company with about 90 employees in Santa Barbara, California.
The deal is expected to close in the fiscal quarter ending December 2005. The
terms of the agreement were not disclosed. JDSU says that unlike alternative architectures,
Agility offers the only proven architecture capable of full tunable laser integration
with a modulator using a highly scalable semiconductor wafer process. According
to the company, the platform also offers switching speeds of less than 10 milliseconds,
and is less sensitive to shock and vibration than other solutions, thus enabling
deployment of robust, highly reconfigurable, and scalable optical networks.
"We believe the shift to tunables is inevitable and that the transition
will be rapid," said Mike Ricci, vice president of JDS Uniphase's
Component and Modules Group. "Agility's single chip monolithic platform
is capable of addressing the entire market and is not limited to a single form
factor. Agility's proven architecture, coupled with JDS Uniphase's scalable
manufacturing capability, paves the way for high volume, tunable, pluggable
solutions." Company News Release
In other company news, JDSU added Multicast Analysis capabilities to its DTS
digital video services test and measurement solution.
In a related bit of news, Australia Broadcasting Corporation has upgraded its
digital signal analysis and measurement tool to the JDSU’s DTS-200. The
JDSU DTS-200 adds several features the previous test solution the DTS-100 including
MPEG analysis for bandwidth efficiency and more advanced audio analysis tools.
Another company, Harmonic, a provider of broadband optical network and digital
video systems, has also chosen to upgrade not the DTS-200 and DTS-330. The DTS-330
is reportedly the company’s “one box” solution offering several
different combinations of MPEG (digital video broadcast, or DVB, and advanced
television systems committee, or ATSC) transport stream generation, capture,
creation, and analysis. The DTS multicast analysis feature will be on display
at International Broadcasting Convention 2005, September 8-14, Amsterdam, Netherlands,
RAI Convention Center, Hall 8, Booth 8.314. Cree to Open Asia-Pacific Subsidiary Headquarters in Hong Kong
LIGHTimes StaffSeptember 8, 2005...Cree Asia-Pacific Limited, a subsidiary of Cree Inc. of Durham, North Carolina
USA, will open its new headquarters in the Hong Kong Science Technology Park on
September 12, 2005. Cree Asia-Pacific was formed to increase customer and technical
support in the region while also serving as Cree’s product innovation center
for the region. The company says it will host a dedication ceremony to introduce
its new Asian customers and prospective customers to the new staff and facility. Content continues for LIGHTimes SecondPage members... Intematix Partners With ProLight
LIGHTimes StaffSeptember 8, 2005...Intematix of Fremont, California USA, has for the second time this week licensed its non-infringing phosphor
technology with a company in Taiwan. ProLight Opto Technology Corporation decided
to take advantage of Intematix’ customized and optimized phosphors. Intematix
will work with the company as it continues to innovate in solid state lighting. Content continues for LIGHTimes SecondPage members... Sensors Unlimited Sold Again
CompoundSemi News StaffSeptember 7, 2005...Goodrich Corporation, a fortune 500 aerospace and defence company, located in
Charlotte, North Carolina USA, has entered into a definitive agreement to acquire
Sensors Unlimited Inc. for $60 million in cash. The transaction is expected to
close in the fourth quarter of 2005 and is subject to approval of U.S. regulatory
agencies. 2005 sales revenues for the business are expected to reach $19 million.
Sensors Unlimited is a pioneer in Short Wave Infrared (SWIR) technology and a
leader in indium gallium arsenide imaging technology for extremely low light conditions.
The company focuses on industrial, analytic, and scientific near infrared spectroscopy,
machine vision and process control, and SWIR imaging and surveillance. Their products'
applications range from covert surveillance, night vision, and health and safety
protocols to historical art inspection
Sensors Unlimited was founded by Dr. Gregory Olsen as a research and development
company in 1991. In October of 2000, at the height of the tech boom, Dr. Olsen
sold the company to Finisar Corporation for an estimated $700 million based on the $35 per share stock
price at the time. (Ref: article) Management later bought back the company from Finisar Corporation
for $ 6.1 million in 2002. (Ref: article) Then once again the company has been sold. This time
the sale went to Goodrich Corporation, for $60 million. The business, housed
in a 39,000-square-foot facility in Princeton, New Jersey with more than 50
employees in manufacturing and engineering roles, will become part of Goodrich's
existing Optical and Space Systems division.
According to Marshall Larsen, chairman, president and chief executive officer
of Goodrich, "This is a strategically important acquisition for our
surveillance and reconnaissance business. We continue to build on our growing
presence in the defense and homeland security markets. Short wave infrared sensors
and near infrared imaging systems, created with indium gallium arsenide technology,
will significantly strengthen our position in the high-growth markets for surveillance
and reconnaissance systems as well as homeland security applications.”
Mr. Larson added, “Our DB-110 airborne reconnaissance system,
a Goodrich technology currently flying with the U.K.'s Royal Air Force, which
will also be flying with Poland's Ministry of National Defense, is capable of
leveraging the addition of short wave infrared technology. Our laser perimeter
awareness systems that support emerging homeland security needs may also incorporate
short wave infrared technology to enhance their capabilities; thereby expanding
the already broad portfolio of solutions we can offer to the marketplace." Company News Release Intematix Licenses Phosphor Technology to Edison OptoSeptember 6, 2005...Intematix of Fremont, California USA, has again licensed its phosphor technology
for white LEDs and has used its phosphor customization; this time to help Edison Opto of Taiwan.
Intematix will provide its White Lightning Y450/Y460TM brand of phosphor to Edison
Opto for use in a variety of applications within the solid state lighting market. Content continues for LIGHTimes SecondPage members... Shakeup Expected in ALD Equipment Business
CompoundSemi News StaffSeptember 6, 2005...Atomic layer disposition equipment makers will likely be purged in the over
populated market with only a handful of customers, an EE Times article says.
Consolidation is a likely possibility with more vendors than customers in the
market, according to Henk de Waard, business unit manager for transistor and
capacitor products for ASM International N.V.’s U.S. subsidiary, ASM America
Inc. of Phoenix, Arizona. “ALD is still in the early stages,”
de Waard said in an interview with EE Times. “I think the shakeout
will continue.” The ALD equipment market has yet to find its niche
with the process many consider to have low throughput and high costs as compared to other
disposition technologies.
ALD equipment produces ultra-thin films, one atomic layer at a time, and unlike
other disposition technology, it offers control of thickness and uniformity
of the layers. According to research by David Cameron at the Advanced Surface
Technology Research Laboaratory (ASTRAL) (Ref: Atomic
Layer Disposition in IC Manufacturing), the advantages of ALD include having:
absolute conformality, the ability to create abrupt interlayer transitions,
and the ability to precisely control growth. The EE Times article says that
the technology is used in DRAM capacitor, storage media, and related applications
but it still is not used in any part of mainstream chip production. Other possible
but underused applications include gatestacks, and interconnects, or wiring within
integrated circuits.
EE times points (Ref: EE
Times)out that in Korea, the ALD equipment business has been consolidated
into a small group of elite vendors including: Aixtron/Genus, Applied Materials,
Aviza, ASM International, IPS, Kokusai, Novellus, and Tokyo Electron Ltd. (TEL).
VLSI research of Santa Clara, California projects that the ALD market in 2009
will be about 6.5 times what it estimates for the 2005 market. Aixtron to Benefit From LCD Backlighting Market
LIGHTimes StaffSeptember 6, 2005...Aixtron AG of Aachen, Germany says that it will benefit from the growing LCD TV
market. Aixtron AG pointed out that the market for LCD TV is expected to grow
rapidly over the next few years, and therefore the disposition of GaN and GaAs
based compound semiconductor structures will be required. Aixtron, a provider
of compound semiconductor epitaxy equipment will benefit from this market trend. Content continues for LIGHTimes SecondPage members... Consolidation Not Over at JDSU
CompoundSemi News StaffSeptember 5, 2005...JDS Uniphase Corporation (JDSU) of San Jose, California USA, in its Q4 fiscal
2005 results posted a year-over-year revenue increase of 3% up to $712.2 million.
JDSU CEO, Kevin Kennedy said that this was the first year-over-year improvement
in posted revenue since 2001. The company still posted a loss totaling $145.7
million for the fiscal year. This posted loss includes a $62.7 million impairment
charge. JDSU reported strong sales in the long-haul and metro-network markets.
“Reconfigurable optical add/drop type electrical multiplexers
[ROTEMs] and some of the higher end sub systems have been the high growth
rates for us,” Kennedy said.
JDSU acquired laser maker, Lightwave Electronics, test and measurements solutions
provider, Acterna, and Photonic Power Systems Inc. over the fiscal year. Acterna
provided the biggest increase in headcount with an addition of about 1800 employees.
The company concluded a year of much consolidation and restructuring. During
the fiscal year the company sold its Fuzhou, China, manufacturing facility to
Fabrinet. In addition, the JDSU transferred both its Ewing and Mountain Lakes,
New Jersey manufacturing facilities to Fabrinet, a key manufacturing partner.
The company also reduced manufacturing in Santa Rosa, California, associated
with the phasing out of certain display products including high-volume consumer
light engines and coated micro display windows.
Mr. Kennedy said, “Clearly we are trying to continue to minimize the
amount of North American Manufacturing and in North American have only those things
that make sense.” He added that the company will continue to move manufacturing
out of North America to Asia and that, “We probably have one more year
of significant manufacturing footprint consolidation.” The company
plans to reduce its headcount by 550 in its continued consolidation and restructuring
in the coming fiscal year. In addition the company will stop manufacturing products
at its Santa Rosa, California facility. This will further reduce the head count
by about 130 workers. Kennedy mentioned that the company may look to Thailand and
Singapore as places for manufacturing. (Ref: Fourth
Quarter Fiscal Results ) Accent Releases p-GaN Carrier Concentration Profiling Process
CompoundSemi News StaffSeptember 1, 2005...Accent Optical Technologies, a private company located in Bend, Oregon USA,
has released a new etch process for Electrochemical CV carrier concentration
profiling of p-doped Gallium Nitride (GaN). According to the company, achieving
a high concentration of holes, also known as positive carriers in p-type GaN
is a critical step in producing HB LEDs or UV lasers for next generation DVD
players. While Secondary Ion Mass Spectrometry (SIMS) can measure the chemical
concentration of the dopant, it does not measure the electrically active carrier
concentration. Unlike
conventional metrology methods, Accent says their electrochemical vapor (ECV)
profiling directly measures the electrically active carrier concentration, which
has a direct impact on key performance parameters including forward voltage
and contact resistance. Content continues for LIGHTimes SecondPage members... Alfalight Releases 25W Pump Module for Fiber LasersAugust 31, 2005...Alfalight has released a 25 W pump module for fiber laser and amplifier configurations.
The Combined Power Module II (CPM-II) reportedly has precision wavelength control
through integrated temperature stabilization. The device is ideal at pumping lasers
at 976nm. Ron Bechtold, vice president of sales and marketing for Alfalight commented,
“This pump source simplifies the development of high-performance fiber
lasers and amplifiers by incorporating wavelength control, advanced protection
circuitry, higher output power and high reliability. As a result, users can
focus on the other aspects of their fiber laser system design and not the pump
performance.” Company
News Release Our news features are reported
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The
McDonald Report
Commentary & Perspective...
CS & SSL Stock Portfolio Inches Up with Color Kinetics the Best PerformerSeptember 6, 2005...Jo Ann McDonald, author of "The McDonald Report" and holder of
a modest stock portfolio of publicly-traded companies considered typical leaders
in the compound semi and solid state lighting industries (about which we report
in CS News and LIGHTimes) shares with readers the results of August activities.
Overall, there wasn't much action, with modest rises for half the portfolio.
Except for Color Kinetics (Nasdaq: CLRK), which rose about $2 per share for
the month. Tying for 2nd place rises were Emcore (Nasdaq: EMKR) and Kopin (Nasdaq:
KOPN) and Anadigics (Nasdaq: ANAD) and RF Micro Devices (Nasdaq: RFMD) rounded
out the rest of "the winners." Read on for details.
Picking up where we left off in the Aug.
3rd McDonald Report, which reminded everyone that I'm definitely not
a stock guru... simply a columnist who's hung around in CS tech wells for
30 years now, only recently taking the personal plunge into Stocksville... it
turns out my modest little portfolio continued to rise. I knew it would, primarily
because there was nowhere to go but up! That's why I began investing
my own money in the companies I've championed over the years. In all those years,
I'd never seen the prices of entry so enticingly low. As you'll also note from
that August
report, I purposely bought just 100 shares each of 13 stocks, warning everyone
a month early that I was doing so, in the event that something wonderful happened
to them simply because I'd declared my favorites. I also warned readers to do
their own due diligence and certainly not to rely on mine... although I'm probably
closer to the field(s) than many professed "gurus" (link
to past 5 years of editorials).
Total buy-in, to date, was just short of $7,000. Total value of those 13 stocks
as of August 3rd amounted to just short of $8,400. As of today, September 6th,
the portfolio rose slightly by another $176. In addition
to not being a stock guru (if I was I'd know all the cool Wall Street
buzzwords), I'm also terrible at math, so feel free to re-crunch my numbers.
But what I see is an increased value of the portfolio to the tune of $1,576 since the initial buy-in. Not bad for
our largely beleaguered field, which is why I've undertaken this experiment.
My intent is to hold the stocks long term and see how the portfolio profits
in the long run. I figure that if I'm gradually increasing the value of my holdings, the companies are gradually gaining strength.
The 13, by Nasdaq stock ticker symbol (and listed in the order I bought
them) are: EMKR, CREE, TQNT, CLRK, ANAD, JDSU, SPIR, RFMD, KOPN, WJCI, VTSS,
AIXG, AXTI. And I've decided to add one more. TIR
Systems. According to all reports from those I respect, TIR's Lexel
core technology for the fledgling SSL industry looks like it will help propel
that company in the months and years ahead. They're also good folks up there
in Canada. I've known TIR for a long time and they'll do well. TIR trades on
the Toronto exchange (TSX) under the simple to remember symbol "TIR."
If you use Yahoo Finance to track stocks (my favorite and easiest to use) the
symbol to enter is TIR.TO.
My rationale as to why I select a given stock are varied. Mostly, it's because
I truly believe these companies will be around awhile, and over the long term,
thrive. In most cases, they're compound semi industry pioneers. There are many
companies in our field I'd love to own stock in, but they're simply not available
for public trading, or I simply don't know the company that well. As some of
the special ones go public in an IPO, you can bet I'll be first in line to buy
in... and I'll always let you in on my intentions prior to investing.
Of the 13 currently in the portfolio, Color Kinetics' (CK) stock performed
especially well during August, jumping from $12.24 per share to today's close
at $14.89. The jump apparently came after CK won the summary judgment in the
dispute caused by Super Vision (ref: Aug.
22 news). What I disapproved of since the onset of the case last December
was the fact that SV and their allies tried to "try the case" in the
press. We didn't bite. Obviously, other investors (and probably the judge as
well) didn't like that tactic either, but investors did seem to like the outcome
as CK's stock and volume trade rose
dramatically after the judgment announcement. CK's stock still hasn't regained
their high of almost $20/share, but hey, I bought at the dip and got in at $11.27.
Can I call them, or what!
To recap the summer, here's how the entire portfolio did: Emcore (EMKR: bought
at $3.63) rose rather impressively by Aug 3rd to $4.54, and continued its charge
and is now $5.24...Cree (CREE: bought at $24.27) rose to an impressive
$29.16, but fell in August a bit and is now 25.65...TriQuint (TQNT: bought
at $3.37) moved up a bit to $3.80 by August and is now $3.86.
As stated above, Color Kinetic (CLRK: bought at $11.27) moved up to $12.24 by
August and is now $14.89... Anadigics (ANAD: bought at $1.51) climbed
out of the dollar hole by August to $2.57 and inched up a bit more and is now
$2.75... JDS Uniphase (JDSU: bought at $1.60) dropped a bit to $1.52 by
August but is moving forward and starting again to acquire key smaller companies, and is now $1.55... Spire (SPIR: bought
at $4.50) jumped dramatically over the summer to $9.87 and is holding its own
and is now $9.50. RF Micro Devices (RFMD: bought at $5.25) had risen
to $6.36 by August 3rd and is continuing a slow climb up due to Nokia and Mot's
cellphone successes, whom they supply, and is now $6.42. Kopin (KOPN:
bought at $4.43) rose a dollar by August 3rd to $5.40 and repeated its performance
and is now priced at now $6.60... WJ Communications (WJCI: bought at
$2.06) slid to $1.39 and can't seem to get any momentum (I truly thought they'd score enough military contracts by now to do so) and is now $1.26.
Vitesse (VTSS: bought at $2.52) slid a bit by early August to $2.23 and is now
$2.25... Aixtron (AIXG: bought at $3.64) first rose a smidge to $3.71 and
is now $3.42. And last but not least, AXT (AXTI: bought the same time
at $1.25) which is trying valiantly to get its act back together first slid
a bit to $1.19 and is unching up slowly and is now $1.35.
On the telecom side of the compound semi street, JDS Uniphase's status seems
to sum up what's happening with far too many North American-based companies.
They're continuing to "consolidate" and moving manufacturing out of
North America. (Ref: Sept.
5 news written by our news editor, Scott McMahan). "The new CEO,
Kevin Kennedy said, 'Clearly we are trying to continue to minimize the amount
of North American Manufacturing and in North American have only those things
that make sense. 'He added that the company will continue to move manufacturing
out of North America to Asia and that, 'We probably have one more year of
significant manufacturing footprint consolidation. 'The company plans to
reduce its headcount by 550 in its continued consolidation and restructuring
in the coming fiscal year. In addition the company will stop manufacturing products
at its Santa Rosa, California facility. This will further reduce the head count
by about 130 workers. Kennedy mentioned that the company may look to Thailand
and Singapore as places for manufacturing." The telecom side of the compounds isn't out of the hole yet, but it's obviously starting to recover.
On the solid state lighting side, Color Kinetic's energy and endurance continues
to astound people, and essentially represents the SSL industry as a whole. That's why I'm excited about investing in TIR, which is in a similar space in the supply chain as CK. The frantic growth spurt seems to be leveling off and the installed base for advanced LEDs is growing
quite more rationally. There's much work ahead for everyone (especially on industry-wide issues like standards and nomenclature), but things seem to be on track. As we reported August 17th, Strategies Unlimited estimates that "for the next five years, growth rates may be expected
to be in the range of 10-15% per year, rather than the 40-50% that the industry
has come to expect." So said SU's Bob Steele who added, "However,
even with these lower growth rates, the HB LED market is still expected to reach
$6.8 billion in 2009, nearly twice the level of 2004." Behind the numbers, just look at the core technologies coming out of leading publicly traded companies like CK and TIR. Then look at what the up and coming systems integrators that aren't
publicly traded are doing, like OptoLum and Permlight. Look hard at what "The
Big 5" (with Epistar's growth... "The Big 6") are shipping, and
to whom... and in what amounts, and how all are striving to meet increasingly challenging specs. My bet is that my investments in SSL industry stocks
and the CS foodchain that supplies them will be looking pretty bright 5 years
from now. You might want to consider getting in on the action. If you have questions about the
solid state lighting and compound semiconductor industries or have news
or views to share, I'm Jo Ann McDonald, Editor of LIGHTimes and CompoundSemi News.
Feel free to contact me directly, anytime. 
My direct tel at the ranch is
+1-325-463-5345
From time to time Jo Ann may comment on companies in which she holds a
modest investment - be sure to read
her disclosure at some point in time... |
