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Editorial: CS/SSL Stock Portfolio Up an Impressive 60%
... As of February 1st when last Jo Ann reported on her model portfolio of compound semi (CS) and solid state lighting (SSL) industry stocks, the value of the portfolio had increased an impressive 43%. As of March 20th, that value figure has risen even further to 60%... a figure...
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Features:
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Comlent and Agilent Team Up for SCDMA Reference Lab in China
CompoundSemi News StaffMarch 20, 2006...Comlent Technology Inc., a fabless radio frequency integrated circuit (RFIC) design
house of Shanghai, China, and Agilent Technologies are teaming up to establish
the “Comlent-Agilent TD-SCDMA Reference Lab (China).” According to
Agilent, the lab is oriented for R&D, test, and validation of RFIC, RF module
and mobile terminal performance. The lab will focus on following TD-SCDMA, the
third 3G international standard favored by China in addition to WCDMA and CDMA2000
mostly deployed in Europe and the United States respectively. Both companies hope
the lab will help to accelerate the development and maturity of RF technology
for China’s TD-SCDMA chain. Comlent
News Release Aixtron Expects Break Even in 2006
CompoundSemi News StaffMarch 20, 2006...Aixtron of Frankfurt, Germany, hopes to break even after a sharp rise in semiconductor
equipment orders. Chief executive, Paul Hyland indicated that the company was
in good shape to profit from an upturn in demand from LED makers. The company
has integrated Genus, its acquisition from a year ago. According to the company,
orders rose 51 percent in the quarter ending in December to $45 million (37.6
million euros). The company’s estimates for the year remain conservative.
"A strong performance by our sales team in the fourth quarter of 2005
with equipment order intake up 51 percent sequentially may not signal the end
of a difficult period in the market but we hope it signals the beginning of
the end," Hyland said in a conference call. Company
News Release Lite-On Technology Increases Investment in Automotive Electronics
CompoundSemi News StaffMarch 20, 2006...Lite-On Technology of Taiwan, a maker of power supplies, imaging products,
and LEDs is to acquire 100% of Lite-On Automotive, maker of car-use security,
cruise control and tire-pressure monitoring devices. Lite-On will increase its
stake in Lite-On Automotive from 17.52% to 100% through a stock swap, Digitimes
reported. Lite-On Automotive will become a wholly owned subsidiary. Lite-On Technology is also apparently expanding into automobile electronics
with investments in Light-On IT, a maker of car-use DVD players, Actron Technology,
a producer of rectifier diodes, and Silitech Technology a manufacturer of car-use
keyboards. According to the article,
Lite-On Technology focuses primarily on energy management system production
power supplies. Aviza Gets Multiple System Order From SMICMarch 20, 2006...Aviza Technology Inc. has received an order for multiple LPCVD systems from
SMIC. Aviza Technology Inc. of Scotts Valley, California USA, a semiconductor
equipment maker announced receiving orders for multiple low pressure chemical
vapor disposition machines from Semiconductor Manufacturing International Corporation
of Bejing. The systems ordered include the RVP-300plus and the RVP-550 thermal
processing systems. According to Aviza, the tools will be shipped to SMIC’s
Bejing Fab 4 facility. Aviza contends that the SMIC has the only Chinese owned
300mm fabrication facility in Beijing. Aviza indicated that SMIC will utilize
the LPCVD devices for DRAM production. Aviza
News Release Bookham to Sell and Leaseback UK Facility
Scott McMahanMarch 15, 2006...Optical component maker, Bookham Inc., headquartered in San Jose, California
USA, signed an agreement for the sale and associated leaseback of its Caswell,
UK, manufacturing facility with Scarborough Developments, a UK property investment
company. According to Bookham, the closing, which is subject to closing conditions,
is expected to occur on or before March 30, 2006. The immediate revenue generated
by the sale will be about £13.8 million (about $24 million at today's
exchange rates). As part of the transaction, the company agreed to enter into a long-term
lease of the facility with Scarborough Developments.
“With this latest transaction, Bookham will have raised approximately
$101 million from a public stock offering and the sale of various assets, including
this sale and leaseback of our
manufacturing facility in Caswell. In addition, in January we announced actions
that are expected to result in the retirement of all of Bookham’s long
term debt, which further strengthens our financial position,” said
Dr. Giorgio Anania, president and CEO of Bookham Inc. “We believe
Bookham now has one of the stronger balance sheets in the optical components
market, and we plan to leverage our improved financial position to better address
our growing markets.” Company
News Release.
The plan is apparently another effort to pay off debts and raise capital. In
September of 2005, the company sold some of its land in Wiltshire, UK to Abbeymeads
LLP for what was then the equivalent of $15.5 million. (Ref: Coverage). APA to Focus on Epigrowth
CompoundSemi News StaffMarch 15, 2006...APA Enterprises located in Minneapolis, Minnesota USA, an optoelectronics component
maker and manufacturer of nitride epitaxial layers and custom optics, reported
selling its multi-wafer metal organic chemical vapor deposition (MOCVD) operations
and related intellectual property. APA will receive $1.9 million in cash as
part of the revenue sharing and licensing agreement. According to the company,
the sale includes its multi-wafer MOCVD system, technical “know-how”
associated with its epigrowth technology, two heterojunction field effect transistor
patents, a pending patent application, and associated intellectual property.
The company said it will now concentrate on GaN products including UV detectors
and power amplifiers. Terms of the transaction do allow the company to sell
products applications of more than 1GHz. APA indicated that it will receive
an additional $100,000 in consulting fees over the course of one year as part
of the agreement. Company
News Release Skyworks Ramps Production of Front-End ModulesMarch 14, 2006...Skyworks Solutions of Woburn, Massachusetts USA, has begun producing their Intera
front-end modules for wideband code division multiple access (WCDMA) applications.
The company indicated that the increased production supports several soon-to-be-released platforms from a leading handset OEM (Original Equipment manufacturer).
The company says that they simplify RF design while taking up little boardspace,
and they support virtually any broadband connection and emerging high-speed
downlink access (HSDPA) applications. Company
News Release EM4 Exhibits Optoelectonic Components at Military Technology ConferenceMarch 14, 2006...EM4, a maker of lasers and optoelectronic components, exhibited its products
at the Military Technology Conference in Boston, Massachusetts. Included among
its exhibited products are the company’s high power pump lasers, high
speed photo diode receivers, and directly modulated lasers for USA defense and
homeland security. According to the company, their active optical devices are
designed to provide the high power, reliability and durability required for
a range of defense applications including satellite communication, range finders,
illuminators, target designators, missiles, aircraft, and smart munitions. According
to EM4, their design incorporates high coupling efficiency of optical transmission.
The Military Technology Conference runs March 14-15. Company News Release California Universities Join to Establish the Western Institute of Nanoelectronics
CompoundSemi News StaffMarch 13, 2006...The UCLA Henry Samueli School of Engineering and Applied Science, the University
of California-Santa Barbara, the University of California-Berkeley and Stanford
are teaming up to launch what the Stanford News Service calls “one
of the world's largest joint research programs focusing on the pioneering technology
called spintronics." Spintronics is electronics that takes advantage
of the magnetic states, spin up, spin down, and on, and off. The two states
spin up and spin down are what differentiates the it from conventional binary
electronics. (Ref: Wikipedia).
To use the technology, engineers are looking to materials other than silicon.
Stanford University News reported that nearly 30 eminent researchers will work
for the institute which will be headquartered at UCLA Engineering. Scientific
and technical responsibility will be distributed across all four campuses. Using
spin of an electron to carry information, the researchers hope to eventually
help develop the technology to minimize power consumption and maximize processing
speed, and minimize size for next-generation electronics.
UCLA Engineering Professor Kang Wang will serve as the director of the Institute.
He will work closely with professors David Awschalom at UCSB, Jeff Bokor at
UC Berkeley, and Philip Wong at Stanford. "Researchers in this institute
want to not only look at physics and materials, but also explore devices, circuits
and systems," Wong said. "With this new institute, we are
talking about an unprecedented opportunity to help define a technology that
can exploit the idiosyncrasies of the quantum world to provide key improvements
over existing technologies," he added. "As rapid progress
in the miniaturization of semiconductor electronic devices leads toward chip
features smaller than 65 nanometers in size, researchers have had to begin exploring
new ways to make electronics more efficient. Simply put, today's devices, which
are based on complementary metal oxide semiconductor standards, or CMOS, can't
get much smaller and still function properly and effectively. That's where spintronics
comes in."
IBM Fellow Stuart Parkin, Stanford Physics Professor Zhang, and Electrical Engineering
Professor Harris will co-direct the IBM-Stanford Spintronic Science and Applications
Center (SpinAps, for short). "The spintronics effort at Stanford is
based upon the ongoing research collaboration with IBM through the SpinAps Center
and the unique materials, characterization and device capabilities of the Stanford
Synchrotron Radiation Laboratory and the molecular beam epitaxy labs at Stanford
and IBM," Harris said. The Institute is being funded with starting
grants of $18.2 million. This includes an industrial support total of $14.38
million and a matching $3.84 million UC Discovery Grant from the Industry-University
Cooperative Research Program, which seeks to strengthen California's research-and-development
economy in partnership with California research-and-development companies. The
$18.2 million in total starting grants includes $2.38 million from a Nanoelectronics
Research Initiative grant funded by six major semiconductor companies -- Intel,
IBM, Texas Instruments, AMD, Freescale and MICRON. Intel contributed 2 additional
grants totaling $12 million. Funds will be distributed over a four-year period.
Stanford
News Release Nichia Boasts 100 Lumens/W for Packaged White LEDs (Clarification)
Scott McMahanMarch 16, 2006...A spokesman for Nichia reported to EE Times that a prototype of a
new white LED has achieved the significant milestone of 100 lumens per watt.
Nichia may be the first to publicly claim 100 lumens per watt for packaged white LEDs.
A Nichia spokesperson said in the article
that no white LED chips have been previously been developed with triple-digit
efficiency. The company reportedly revealed prototypes of the LEDs in the form
of a pendant light and a spotlight. The prototype pendant light delivered 4,536 lumes with a 45-W input utilizing 756 units of the white LED chip. The spotlight prototype consisted of 80 chips and delivered 480 lumens with 4.8-W input. Both lighting devices achieved around 100 lm/w efficiency. While a milestone, the device uses only
20 mA of power. Nichia took the approach of using multiple chips packaged together instead of using higher power for each chip to acheive high brightness. -Scott Mc
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The
McDonald Report
Commentary & Perspective...
March 20, 2006...As of February 1st when last Jo Ann reported
on her model portfolio of compound semi (CS) and solid state lighting (SSL)
industry stocks, the value of the portfolio had increased an impressive 43%.
As of March 20th, that value figure has risen even further to 60%... a figure
that any USA stock market follower would say is "huge and exciting news."
To follow are the details of how the portfolio is performing.
When I first dived into this "model stock portfolio" experiment,
my primary motivation was not profit... although that would be a nice
bonus. The motivation was to prove to myself, colleagues, and friends that we'd
truly hit bottom and that there was really no way to go but up. To do so, I
needed to provide myself with some kind of tangible metric to track the awkward
upward climb back into semiconductor industry prominence. I never expected that
the overall progress of the portfolio would be regarded as "huge and exciting
news," but that's what my broker says it is. And I believe him.
The challenge now is to leverage that "news" in some way... beyond
these niche pages. If you represent any of the companies in the portfolio, give some thought as to how we might do that, collectively or individually.
In order of their purchase (a process that began last May), the 13 companies
included in the model portfolio and their Nasdaq trading symbols are: 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).
As adequately pre-announced in these pages to satisfy any SEC concerns, I purchased
100 shares of each at what I felt was their rock bottom low. The selection was
not based on just bargain-basement pricing. These were companies I knew, from
experience, would be around for many years to come. I also respect these companies
and their management for their past performance and have faith they'll continue
to provide the kind of shareholder and customer value that indeed models the
CS and SSL industries.
The purchase of Emcore stock was the easiest, not only because it was trading
at only $3.63/share, but because I know Emcore better than any other company
in our field. I consulted for Emcore for three years in the 1990s during both
the telecom boom and early rollout of the SSL and multijunction solar cell industries.
Taking a sabbatical from journalism to be their director of corporate communications
proved to be a job that taught me more about the CS and SSL industries than
any editor could ever imagine. The purchase of Cree and Color Kinetics's stocks
were the most difficult decisions simply because both were already trading in
double digits back in May of 2005. I'm not only a natural tightwad, I didn't
have that much to "gamble" on this experiment. But who could resist
Cree and CK? They were both born winners, and I've known both since their respective
births.
The EMKR, CREE, and CLRK stocks have turned out to be the best performers in
the portfolio. As of March 20th and this writing, Emcore has provided an "unrealized
gain" of $870, Cree has added $770, and Color Kinetics has turned in a
$669 gain. The total cost of the entire portfolio was $6,908 and today it's
worth $10,038. That's an overall "unrealized gain" ("unrealized"...
because not only is that the terminology required, but there's literally no
way I'd cash these babies in now!) of $4,167.35. Take the gain and divide
it by the cost, and you get the 60% increase in value.
Looking over the score sheet since their respective purchases, my EMKR stock
has enjoyed a steady rise. Cree has had a bit of a mini-roller coaster ride
and TQNT is finally enjoying a mild overall rise. CLRK has steadily risen, and
ANAD is finally enjoying a nice steady rise, as has JDSU. SPIR is still riding
their dramatic upswing from last summer. RFMD is steadily rising, and the only
minus comes from KOPN which lost me a whole $7.95.
The final four in the portfolio, which were added later as their prices sank
to irresistibly low buy-in levels, are probably the best indicators of how the
overall CS-related (or rooted) industry really is recovering. At first, WJCI
and VTSS's stock prices fell even further after I purchased them, but they're
now both on the rise again. WJCI turned in a tidy $51 overall gain and VTSS
$93 as of today. The final two, AIXG and AXTI, were the latest purchases when
Aixtron's stock was $3.42/share. Despite recent
news that Aixtron's has had to streamline operations, their branching out
to the organic and innovative silicon industries is evidently viewed as sensible
because their stock is trading today at $4.31. AXT underwent a major overhaul
under the Phil Yin (formerly of Aixtron) and has managed to pull their stock
up from $1.25/share (when I purchased it) to $3.42/share today. That's already
netted me a tidy $212.05 gain. Kudos to both AIXG and AXTI's management teams for
the turnaround.
What I read into the overall performance of my model portfolio is that things
are indeed looking up. Finally. the biggest winners, in order of overall stock
performance, are: Emcore, Cree, Color Kinetics, Anadigics, and Spire, who have
collectively provided gains in the range of $870 to $421. They're followed by
JDS Uniphase, RFMD, and AXT weighing in at the +$200 range. The rest of my
baker's dozen (aka my "Lucky 13") contributed only single or double
digits, except for Kopin, the only minus in the batch. But knowing KOPN, it'll
be back up soon.
The overall performance of the portfolio says a lot for the management strategies
of the three big winners and the perseverance of the other ten. For those struggling
for prominence in their respective fields, take a close look at what Emcore,
Cree, and CK have been doing over the past year. These three companies continue
to pioneer the CS and SSL industries. These three are the best models I could
point to as how to succeed in very tough businesses. 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... |
