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Editorial: Impressive Rise in CS Stocks and Startups Brighten the New Year
... With 2006 already moving into high gear and readers of both CompoundSemi News and LIGHTimes coming off Photonics West gearing up for the secular spring conference season, Jo Ann McDonald provides a behind scenes preview of two especially interesting new GaN startup companies (Velox and Verticle) and reports on...
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Nanometrics to Acquire AccentJanuary 31, 2006...Nanometrics of Milpitas, California USA, a supplier of metrology equipment
for the semiconductor industry, has signed a definitive agreement to acquire
Accent Optical Technologies, Inc.for about $80.9 million worth of Nanometrics
common stock. Accent of Bend, Oregon also is a supplier of process control metrology
systems for the semiconductor industry. Nanometrics says that with the arrangement,
the combined company will be one of the largest process and control companies
in the semiconductor industry. Nanometrics will issue 5 million shares of its
common stock in exchange for all outstanding Accent capital stock and the right
to acquire more. Nanometrics will assume $10.6 million of Accent’s net
debt obligations. Nanometrics will own about 73% of the combined company’s
stock, and Accent stockholders will own the remaining 27 percent. Nanometrics
existing headquarter in Milpitas, California will be the new headquarters of
the combined company which will keep the name Nanometrics. Company
News Release Tokyo Denpa Offers 3-Inch Zinc Oxide WafersJanuary 31, 2006...A Japanese-based company is now offering mass produced 3-inch zinc oxide wafers, according to Nikkei Business Daily. Tokyo Denpa, Co. reportedly developed a method of mass producing larger diameter wafers of zinc oxide than previously available. According to the article, Tokyo Denpa claims that one of their 3-inch wafers can yield about 20,000 0.3 mm LEDs, suitable for cell phones, and that with slightly more than twice the useable surface area, 3-inch wafers could yield more than twice the LEDs that a 2-inch wafer would yield. Tokyo Denpa primarily manufactures oscillators and other quartz items, but states that its goal is to generate as much money from sales of zinc oxide wafers as it will do in quartz sales in 2009.
IQE Signs Full Outsourcing Agreement With Major US Chip MakerJanuary 31, 2006...IQE Silicon a subsidiary of IQE plc, located in Cardiff, UK, announced signing
an outsource contract with a major US-based chip manufacturer. Under the contract,
IQE will become solely responsible for all production, development, and logistics
of the customer’s epi-based products for five years. The contract is expected
to be worth about $2 million to the group during the current fiscal year. However,
following the customer’s increasing focus on epi products, the contract
will be worth over $10 million of the five year contract. IQE says that this
is just the latest win in a trend that they have seen for outsourcing epi product
manufacturing and development. Some of the common reasons for outsourcing that
the IQE outlined include: reduced capital spending, access to advanced epi technology,
faster time to market, no idle in-house capacity, and improved return on investment.
IQE has disclosed the name of the US-based outsourcing client. Company
News Release Freescale Claims Commercially Viable GaAs MOSFET
CompoundSemi News StaffJanuary 30, 2006...Freescale Semiconductor of Austin, Texas, claims to have developed the first commercially
viable gallium arsenide (GaAs) metal oxide semiconductor field effect transistor
(MOSFET). While GaAs MOSFETs were first patented in the late 1970's, uncontrolled
current, or leakage, has historically been the main technical challenge. (Ref: patent #4,119,993). Oxide interface semiconductor defects have also been a persistant problem. Additionally,
the costs of gallium arsenide are much higher than silicon (which is most commonly
used material for MOSFETs) because of silicon’s abundance. However, the promise
of conducting electricity 20 times faster than silicon proved to be an irresistible
target for engineers. Such a device might dramatically improve chip performance.
Freescale says it has overcome the problem of leakage and is working on making
the devices less expensive. Freescale has also claimed to have identified GaAs compatible materials and devices to help eliminate the oxide interface defect issues of previous GaAs MOSFET designs. According to Freescale, these materials and devices give the GaAs MOSFET manufacturers the ability to scale production to levels in the realm of silicon MOSFETs. The company estimates that it will be three to five
years before it can manufacture the devices for specialty commercial applications.
Until then, the company plans to look for ways to commercialize the device including
licensing agreements.
"We've been doing research on this for the past 10 years, and the
industry in general has been researching this area since the 1960s, but most
of the devices made have performed at less than one percent of what was required
to make them commercially applicable" said Karl Johnson, director
of Freescale's Microwave and Mixed Signal Technologies Laboratory. "We
feel comfortable that what we've produced is a manufacturable, high yielding
technology that can be implemented in our products. We have addressed what we
believe are many, if not all, of the technical issues." Company
News Release
SatCon Awarded Contract to Develop Integrated Starter/Generator for Amry Hybrid Electric Powertrain Military VehiclesJanuary 30, 2006...SatCon Technology, a manufacturer of power electronics and motors based in
Boston, Massachusetts USA, has been awarded a Phase I Small Business Innovation
Research (SBIR) contract with the U.S. Army to develop an integrated starter/generator
(ISG) for hybrid powertrain military vehicles. SatCon’s Applied Technology
division is currently developing DC/DC converters (pulse power and battery chargers),
starter generators, auxiliary power units, and main generators for hybrid electric
vehicles for U. S. Army advanced technology vehicles, according to the company.
The work follows machinery research conducted at Massachusetts Institute of
Technology (MIT) for the automotive sector, and a previous SBIR contract supporting
the Department of energy’s FreedomCar traction motor development program.
According to the company, SatCon will leverage its Partnership for the Next
Generation Vehicles (PNGV) development work and Advanced Integrated Power Module
(AIPM) technology to provide the mating drive for the ISG. The company contends
that the machine technology such as an ISG and/or traction motor could be used
in both military and civilian hybrid electric vehicles. Company
News Release Veeco Forms Process Equipment GroupJanuary 30, 2006...Veeco has formed a process equipment group to maximize growth in the data storage
and HB-LED industries. Veeco Instruments Inc., located in Woodbury, New York USA,
hopes to capitalize on the two growing markets by embedding
both their HB-LEDs and embedded storage components consumer electronics with backlit
displays. Robert P. Oats, formerly in charge of Veeco’s data storage operations
will now also oversee and be in charge of the company’s epitaxial operations
including their MOCVD and MBE products.
Edward H. Braun, Chairman and Chief Executive Officer of Veeco, stated, "Our
Process Equipment Group is a $225 million per year world leader in deposition
and etch technologies, focused on the high-growth data storage and high-brightness
LED markets. We expect revenue growth in this business to exceed 15% in 2006,
as market demand for converged consumer electronics with embedded storage and
high brightness LED backlit displays broadens, and Veeco introduces new Process
Equipment solutions aligned to each market.” He added, “As
capacity expands in hard disk drive, we have solutions for the emerging technology
changes required by perpendicular recording and smaller form factors. In HB-LED
our customers' roadmaps are demanding brighter films and higher levels of throughput.
Veeco is uniquely focused on meeting these technology and productivity requirements
on a worldwide basis." Company
News Release Cree and Kensai Demonstrate SiC 100 kVA Three-Phase InverterJanuary 26, 2006...Cree Inc. and Kansai Electric Power demonstrated a 100 kVA silicon carbide-based three-phase inverter. According to Cree, the results are more than nine times higher output than the previous high for a SiC inverter of 12 kVA. As part of a collaborative eight-year effort, Cree reportedly fabricated the SiC components of the power devices and Kansai Electric constructed the SiC modules and inverter using the components
The device has applications for efficient power conversion in hybrid electric vehicles, heat pumps, industrial motors, and electric vehicles. Additionally, solar photovoltaic, wind, or battery power transfer to the electric grid would require such a device. Cree News Release
Skyworks Posts Lower Profits for Quarter; Boasts of Helios Radio Sales
January 26, 2006...Skyworks solutions posted 69% lower profits with $4.1 million on $198 million
in revenue for its first fiscal quarter ending December 31 compared with the
same period one year before. During the same period the previous year, Skyworks
Solutions, based in Woburn, Massachusetts USA, reported $13.9 million in profit
from $220 million in sales. The company expects its lowest revenue in two years,
$180 million for the current fiscal quarter. However, Skyworks emphasized that major OEMs are now ramping their mobile product lines incorporating the company's Helios radios, which are EDGE technology based devices designed to conserve
power in mobile applications.
"Our Helios EDGE radios are now supporting the majority of top tier
OEMs, with aggressive ramps ongoing at LG, beginning at Samsung, and to be followed
later this year at Motorola. Our WCDMA front-end module and multimode radio
traction, coupled with the launch of our newest precision analog solutions,
are setting the stage for a strong second half of 2006," said, David
J. Aldrich, Skyworks' president/CEO. Company
Financial Results Alfalight Catches a Record Wave for DARPAJanuary 26, 2006...Alfalight achieves a record high 22 watt continuous wave (CW) output for a 975 nm diode laser as part of the Defense Advanced Research Projects Agency (DARPA) Super High Efficiency Diode Sources (SHEDS) Program. Alfalight, located in Madison, Wisconsin USA reported that their researchers were able to improve the output the single strip, multimode diode laser which operated at 25 degrees C, by 47 percent and add 1 micron in wavelength to the previously reported highest value. The company cited less waste heat and lower junction temperature as factors contributing to the improvements. Company News Release CyOptics in Partnership with Cray, Demonstrates 80Gbps Data TransmissionJanuary 26, 2006...Optical component maker, CyOptics Inc. of Lehigh Valley, Pennsylvania, successfully demonstrated 80Gbps data transmission for supercomputing and short-range (2 km) datacom and telecom markets. The transmission device was designed in partnership with Cray Inc. The error free 80Gbps transmission in each direction was reportedly enabled by the device’s photonic integration capabilities and its automated packaging platform, the indium phosphide-based TOSA (Transmit Optical Subassembly) and ROSA (Receive Optical Subassembly) engines. In addition, CyOptics tested the engines successfully over a 2km fiber path in loop-back mode. CyOptics’ News Release
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The
McDonald Report
Commentary & Perspective...
February 1, 2006...With 2006 already moving into high gear and readers of both CompoundSemi
News and LIGHTimes coming off Photonics West gearing up for the secular spring
conference season, Jo Ann McDonald provides a behind scenes preview of two especially
interesting new GaN startup companies (Velox and Verticle) and reports on the
performance of her model CS stock portfolio, which has produced an impressive
43% overall increase in value.
"Gong Xi Fa Chai!" to all our readers celebrating the Chinese
New Year, which kicked off January 29th. 2006 is the Year of the Dog and the
celebration will last the traditional 15 days until the next full moon. The
celebration, which is now held in countries throughout the world, traditionally
ends with the Lantern Festival, which is celebrated at night with colorful
displays and children carrying lanterns in a parade. Would that the lights they
use were made out of safe, cool, energy efficient HB LEDs.
Starting with Photonics
West... that big conclave in San Jose in January effected many of our
sectors. That event is often an early indicator of how the upcoming year might
go. Lumileds Lighting and JDS Uniphase got top billing in the events follow-up
reports, and VCSELs shared the spotlight. Click
on this link, scroll down and around, and you might see yourself in the
pictures and writeups. I think that the fact that Lumileds's presentation was
the lead picture story and that VCSELs are holding center stage is a very good
sign. Also, the fact that JDSU is on the mend and in acquisition mode again
says that things in the telecom sector might indeed be getting back on track.
There were 1000 exhibits this year at Photonics West; yet another good sign.
On to my favorite subject, especially promising GaN startups, there are two based in the USA that arrived on my radar screen recently.
Both coincidentally start with the letter "V" and represent
both ends of the GaN application spectrum, LEDs and electronics.
The first, Verticle Inc., is a GaN LED startup based (for now) in Dublin,
California. The CEO is Mike Yoo who was formerly with Oriol and Samsung. In
a chat with Mike, he reported that he, Kacey Hwang,
serving as executive VP, and 6 people are working on their first product, a 2 inch wafer scale vertical GaN structure (note the intentional
play on words: Verticle makes vertical structures). Right
out of the chute they're working with OEM colleagues in Korea to get their customized
epi just right, based on Verticle's proprietary wafer scale IP. So, when
they introduce the product about 6 months from now, it will be guaranteed ready
for production scale manufacturing. Their technical challenges are evidently
being met to produce excellent light output and heat dissipation (not to
mention affordability). Their chip separation technology is working especially
well also. If you're interested in talking with Mike Yoo or Kacey Hwang (they're
recruiting and scouting for VC), the company tel is +1-925-875-9406. Kacey's
email is kacey@verticleinc.com and Mike's is mcyoo@verticleinc.com. The former
head of Oriol and super consultant Gordon (Uncle Burt) Lancaster is helping
them get things going. Their website, www.verticleinc.com
is just now coming online and will tell you more about this company that's been in
submarine (versus the overused term stealth mode).
The other GaN startup is Velox Semiconductor in Somerset, New Jersey,
the GaN electronic device spinout of Emcore (ref: May
5 headline news), run by industry veteran Tom Hierl. Their website is
already live, www.veloxsemi.com, and
the company is pronounced "VEL-OX". In a chat with Tom, I
learned that Velox's first product, a Shottky diode, is the first of a planned
family. They're already sampling the GaN on sapphire devices with transistors
in the queue. The employee count is up to 10 people now. They're well-funded,
and definitely in active recruitment mode, looking specifically for a VP of
engineering as their most urgent need. Someone from the silicon or SiC world
would be preferable as they're very serious about moving into volume manufacturing
mode ASAP. And what is it Velox can do that others can't? They have reverse
recovery time handled. Because the silicon guys have various finite recovery
time times, they use qualifiers like "fast, very fast, super fast, ultra
fast" and it seems CS industry competitor, Cree, has scored a registered
trademark for the term "zero recovery,." Velox is toying with
what they can call theirs. "Nil" and "zip"
came to mind. If you have a better idea, or if you want to chat with Tom Hierl
directly, his number is +1-732-569-1208 ext. 250. His email is thierl@veloxsemi.com.
And finally, how's the CS Stock Portfolio doing? Extremely well, thank
you. For those who don't recall, I invested in a model portfolio of 13 CS and
SSL industry stocks that trade on the USA's Nasdaq exchange, purchasing just
100 shares of each when they were at a price I thought was rock bottom. Most
were purchased last spring, the remainder in the fall. In order of purchase
and their Nasdaq symbol, they include: Emcore (EMKR), Cree (CREE), TriQuint
(TQNT), Color Kinetics (CLRK), Anadigics (ANAD), JDS Uniphase (JDSU), Spire
(SPIR), RF Micro Devices (RFMD), Kopin (KOPN), WJ Communications (WJCI), Vitesse
(VTSS), Aixtron (AIXG) and AXT (AXTI). They pretty well represent the spheres
of influence we cover in these pages, they're trusted company names with good
reputations, and they're ones that I'm sure will be around for a long time to
come. The total purchase price of the portfolio came to $6908. Tallying up what
they valued as of close of market Jan. 31st, the accumulated unrealized gain
is $9929, which represents an approximately 43% gain!
In the world of Wall Street brokers, my broker tells me that a 43% "accumulated
unrealized gain" is huge, exciting news. Since I have no intention
of selling the stocks, this gain will remain unrealized, but I hope everyone
who reads this will realize just how huge and exciting the pickup is
and what it represents to those of us in the CS and SSL industries. Good
going! Keep up the good work! The big winners this month were Emcore,
Color Kinetics, Anadigics, and Spire who were all up by approximately $5 or
$6 from their original purchase price, with Cree, JDSU, TriQuint and RFMD
up by about $2 each. The others were basically flat or down a bit. Ying Yang
is the name of any stock game, but collectively, it means we're definitely not
"going to the dogs"... even if it is their year. Gong Xi
Fa Chai!
... JMcD
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... |
