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Editorial: Hot Markets: WiMax, Warm Whites & "lexel"
 
... WiMax apps appear to be driving the compound semi (CS) communications sector these days, while warm white light and "lexel" technology appear to be catching on in the fledging field of solid state lighting (SSL). The only thing down this month are the price tags of USA publicly held...
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Aixtron Completes Taiwanese Government Funded Project
CompoundSemi News Staff

June 1, 2006...Aixtron Taiwan announced the successful completion of its first research and development project entitled, “Manufacturing-Oriented Research Lab,” the company’s first R&D project funded by the Taiwanese government. The project was part of the program for multinational innovative R&D centers in Taiwan. Prof. Dr. Michael Heuken, vice president of corporate research and development at Aixtron and member of the Aixtron Taiwan Scientific Advisory Board officially closed the project after the review meeting was held in Hsinchu, Taiwan at the beginning of March.

Aixtron points out that Taiwan is the fastest growing market for nearly all Aixtron technologies in Asia, and according to the Aixtron, the funded project is starting point in the establishment of the company’s R&D Center in Taiwan. Aixtron says it utilizes the research activity in Taiwan to strengthen its market position and to maintain its leading role as technology driver. The company reportedly increased its number of staff 270 percent over a three-year period beginning at the end of 2002. Dr. Joe Yang, R&D Manager of Aixtron Taiwan commented, “Local engineers and scientists were attracted by the challenging scientific program that includes nanotechnology and recent materials science subject matter. With the completion of the project they serve the Taiwanese market better based on the scientific and technical results of the project.” Aixtron reported several research achievements including the reduction of operating costs in LED manufacturing and the development of red, blue, yellow, and even white OLEDs with the unique OVPD production technology. Company News Release

Cree Distributor Sumitomo Agrees to $180 Million Order
LIGHTimes Staff

June 1, 2006...Cree Inc., of Durham, North Carolina USA, reported that its Japanese distributor, Sumitomo Corp., has agreed to purchase $180 million of Cree’s LED and wafer products during the fiscal year ending June 2007. Cree, says that the purchase is about 10 percent greater than what it expected from Sumitomo. Both companies anticipate that purchases will be made across Cree’s full line of wafer and LED chip products, including MegaBright, XBright, XThin, and EZBright LEDs. Company News Release

Verigy Expects $16 to $18 Per Share for IPO
CompoundSemi News Staff

June 1, 2006...Verigy, a wholly owned subsidiary and spin-off of Agilent, has set its initial public offering at 8.5 million ordinary shares with a price of $16 to $18, according to Reuters. Agilent will own about 50 million ordinary shares or 85.5 percent, after the IPO. Verigy told Reuters it expected to receive about $134 million in net proceeds of from the IPO. The funds wll reportedly go towards repaying debt, general corporate purposes, and paying costs from the separation from Agilent. Verigy reported that for the three months ended Jan. 31, its net loss narrowed to $16 million from $45 million a year earlier, while revenue jumped to $170 million from $79 million. Assuming the offering price is in the expected range of $16 to $18, the company will have an initial market capitalization of between about $934 million and $1.053 billion. Verigy intends to list its stock on the Nasdaq under the symbol "VRGY."

In other company news, Robert J. Nikl will become company CFO June 20. He previously served as senior vice president and CFO of Fremont, California-based semiconductor manufacturing equipment maker Asyst Technologies Inc.

GCS Announces HFET Foundry Process
CompoundSemi News Staff

June 1, 2006...Global Communication Semiconductors, Inc. (GCS), a compound semiconductor foundry in Torrance, California USA, will begin offering its proprietary high linearity HFET foundry process to address the high dynamic range requirement of base station driver amplifiers. "GCS has a number of proprietary FET technologies including 0.5um and 0.25um PHEMT processes. Our 0.5um high performance HFET process is the latest addition to the FET family. With a breakdown voltage of 16V with a pinch off voltage of -2.0V, this technology was developed specifically with high linearity in mind and it is ideal for linear amplifiers that require high dynamic range," commented Jerry Curtis, CEO of GCS. "As a performance example at 2.0 GHz, when biased at 8V and 50% Idss, our 1.2mm HFET device can achieve an output power of 28.1 dBm with a Third Order Intercept (TOI) point of 48.5 dBm. With a 20.4 dB linear figure of merit, a difference between TOI and P1dB, our HFET is by far one of the most linear foundry processes ever available. Similar linear performance can also be achieved at 5.0V bias. The superior linearity makes it well suited for use in both analog and digital wireless communication infrastructure and subscriber equipment including 3G, cellular, PCS and fixed wireless system," continued Mr. Curtis. The new foundry service adds to the company’s wide range of foundry services for the wireless telecommunication and high-speed networking industries. The company offers foundry services for InGaP and InP HBT, power and switch PHEMT processes. GCS also provides foundry services for various optoelectronic components such as PIN PD, PIN POD Array, APD, VCSEL and lasers used in the fiber optic communication market. Company News Release

 

Aixtron Sells MOCVD System to Uni Light

May 30, 2006...Aixtron of Aachen, Germany has reported selling a Thomas Swan MOCVD system to Uni Light Technology in Taoyuan Hsien, Taiwan. The CCSTM 19x2" multiwafer reactor will be used for the development and manufacture of gallium nitride (GaN) epitaxial wafer materials for LED devices. Mr. Ping-Hui Lee, Chairman of Uni Light Technology commented, "We have been very satisfied with our first GaN MOCVD system and have decided to acquire another Thomas Swan CCSTM multiwafer reactor. It will form the basis of our continued expansion plans and will be configured as a GaN HB-LED production tool. In our experience, the CCSTM system provides exceptional uniformity of thickness, doping, and composition within epitaxial layers. Also, with Aixtron’s well proven reactor and service support, we will continue to play a leading role in the market with competitive production costs and highest quality epitaxial products.” Company News Release

Cree Releases Samples of GaN HEMTs for WiMax

May 30, 2006...Cree, Inc. of Durham, North Carolina USA, has announced sample availability of its new 15-watt packaged gallium nitride (GaN) high electron mobility transistor (HEMT) called the CGH35015. It is reportedly optimized for broadband wireless access and for WiMAX applications operating between 3.3 GHz and 3.9 GHz. According to Cree, GaN HEMTs offer higher linear power and improved efficiency performance over wider bandwidths than traditional technologies such as silicon LDMOS or GaAs. Company News Release

Demand for Mobile Handsets to Drive Growth at IQE

May 30, 2006...Dr Drew Nelson, IQE President and CEO, said the company has continued to show strong growth in 2006. The company expects increasing handset demand to lead to increased demand for its gallium arsenide (GaAs) materials. He added that the increasing sophistication of handsets will further require more radio frequency components and therefore more GaAs. Dr. Nelson says its major outsourcing contracts are performing ahead of expectations. He also indicated that IQE has moved into full production of the qualifications it carried out in the second half of 2005, and he reported that new qualifications including several in the Far East continue well. He reported that the company’s opto electronics and vertical cavity surface emitting laser (VCSEL) markets are strong, with growing demand for short distance communications, laser printing and copying, and laser mouse applications. Dr. Nelson explained that the markets for its silicon and wafer technology are also showing good strength. However, He said that the growth has increased the company’s need for capital funding. For this reason, the company secured a 3 million loan and 2 million overdraft facility towards the end of 2005.

Dr. Nelson concluded, "We are now moving into a situation in the market where outsourcing is featuring more prominently in many companies' strategic considerations because the semiconductor industry is now becoming capacity limited in several areas. We see this as an advantage to the Group as our breadth of product range, large scale production capacity and economies of scale are key considerations in attracting new business. We therefore look forward to continued strong growth as the Group’s capacity utilization continues to increase and the industry continues to expand."Company News Release

IMEC to Offer AlGaN/GaN HEMTs on Silicon
CompoundSemi News Staff

May 30, 2006...IMEC, a leading European nanotechnology research company, has reportedly demonstrated the growth of low-sheet-resistivity AlGaN/GaN high-electron mobility transistors (HEMTs) on 150mm silicon (Si) wafers. According to the company headquartered in Leuven, Belgium, the growth process will allow the development of high-efficiency/high-power systems that go beyond silicon capabilities. The company used their new 150mm metal organic chemical vapor phase epitaxy (MOVPE) system to grow the high-quality aluminum gallium nitride (AlGaN) / gallium nitride (GaN) high-electron mobility transistors (HEMTs) on silicon. IMEC says it can now offer AlGaN/GaN epiwafer production for laboratories and partner companies. The company says it uses an AlGaN buffer layer to overcome the high lattice mismatch and large difference in thermal expansion coefficient between Si and GaN. IMEC adds their proprietary in-situ Si3N4 passivation layer, resulting in what the company calls “superb” HEMT devices on Si. According the company, the devices offer excellent quality, good uniformity, and high reproducibility. IMEC presented at the 13th International Conference on Metal Organic Vapor Phase Epitaxy in Miyazaki, Japan. Company News Release

NIST Researchers Grow GaN “Nanowires”

May 30, 2006...Researchers at the National Institute of Standards and Technology (NIST) Materials Science and Engineering Laboratory in Gaithersburg, Maryland USA, have reported growing what they call “nanowires” made of gallium nitride alloys. They have also created prototype devices and nanometrology tools utilizing the nanowires. The wires are formed from deposits made layer by layer onto silicon. The layering is done under a high vacuum. The resulting “nanowires” are thin cylinders about 12micrometers long and about 30 to 100nm in diameter. NIST says it's one of the only labs that can grow the nanowires without catalysts. The wires act like quantum wells; when excited with a laser or electric current, they emit an intense glow in the ultraviolet or visible parts of the spectrum. According to NIST, "A paper in the May 22 issue of Applied Physics Letters* reports that individual nanowires grown at NIST produce sufficiently intense light to enable reliable room-temperature measurements of their important characteristics." One such measurement would find the peak wavelength of light emitted when an electric field parallel to the long axis of a nanowire is shifted with respect to an electric field perpendicular to the wire. NIST says the differences can characterize the nanowire materials and also may be exploited to make sensors and other devices. So far NIST reasearchers have made LEDs, field-effect transistors (FETs), and nanowire “bridge” structures which may prove useful in nanoscale mechanical resoators. NIST News Release

II-VI Listed Among Businessweek’s Hot 100 Growth Companies for 2006
CompoudSemi News Staff

May 25, 2006...II-VI, a maker of infrared optics and radiation equipment has made the list of Businessweek’s Hot 100 Growth companies of 2006. Company profits have reportedly risen an average of 50 percent per year for the last three years. Revenues for the same period have risen an average of 19 percent per year. As of the Q3 of fiscal 2006, the company reported booking orders totaling $183.5 million during the nine month period. The company’s products are used in industrial, medical, military, security, and aerospace applications. The company was co-founded by Carl J. Johnson in 1971 and has its headquarters in Saxonburg, Pennsylvania. The company ranks number 97 on the Businessweek list.

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Commentary & Perspective...

Hot Markets: WiMax, Warm Whites & "lexel"

June 1, 2006...WiMax apps appear to be driving the compound semi (CS) communications sector these days, while warm white light and "lexel" technology appear to be catching on in the fledging field of solid state lighting (SSL). The only thing down this month are the price tags of USA publicly held stocks. Along with virtually all their big brother stocks in the overall tech sector, the model CS/SSL stock portfolio dipped in May from a healthy November to April run-up.

My CS/SSL model stock portfolio now includes 14 companies representative of the fields we cover in these pages. Virtually all stocks traded over USA exchanges dropped from 3 to 7% during the last month. In late March, my model CS/SSL stock portfolio was hitting remarkable heights of a 60% rise in value (ref: March 20th McD Report... but it's hard to pick "the benchmark", given the bubble-burst from the point where many of them were trading in double digits six years ago and are trading at single digits now). The last few days have seen an upturn, so maybe it's going to be one of those exciting summers.

Macroeconomics aside, the star performer in the portfolio remains the steadfast and relentless Cree (Nasdaq symbol, "CREE"), which continues to perform as my poster-child company by leading in both the CS and SSL industries. But does the company's stock performance reflect the real story of Cree's progress and contributions? Far from it. Cree was one of the first I selected when forming the model portfolio one year ago because it's one of my all-time favorite companies. Buying in a year ago at what I thought was a reasonably low of $25/share. (At least compared to the triple-digit peak of the bubble). By mid April, the price had made a 6-month run from 25 to 35 and then promptly plopped back to 25. The (hopefully short-lived) panic made for some attractive buying opportunities for those that believe. Would that I could afford more than the representative 100 shares...

It's important to keep in mind that the drop was totally unrelated to the company's performance as Cree continues to be a top contributor in all their wide bandgap (WBG) substrate and device pursuits. Take their strides in the WiMAX space, for example, which is turning out to the hot app area currently driving excitement in the nitride/electronics community. The WiMAX standard is playing a major role in a movie that could be titled The Unwired World: Part 3, featuring cellphones, wireless LAN in the house/coffee shop, next wireless (real, 1+Mbit) Internet Everywhere. Without much excitement happening in the telecom stocks, too many trade publications have paid such sparse attention to WiMAX that I actually had to go back and look up what it stands for, and who's driving what. Cree's recent release of a new GaN HEMT power amp for WiMAX transistor options was the wake up call. Ref: Cree news release and our coverage.

WiMAX stands for World Interoperability for Microwave Access, Inc. The lower case "i" is clever, but then everyone's playing with combos in lower case as editors boycott anything in all caps. According to the WiMax Forum website, www.wimaxforum.org, WiMAX is a standards-based technology enabling the delivery of last mile wireless broadband access as an alternative to cable and DSL, providing fixed, nomadic, portable and, eventually, mobile wireless broadband connectivity without the need for direct line-of-sight with a base station. WiMAX technology will be incorporated in notebook computers and PDAs by 2007, allowing for urban areas and cities to become “metro zones” for portable outdoor broadband wireless access. It's obviously, the wave of the future.

The hot area in the SSL side of our reporting right now is the overall field of "warm white" LEDs. North Carolina SSL startup (and Cree spinout) LED Light Fixtures Inc. (LLF) is the latest to report significant warm white breakthroughs this week at Lightfair International (ref: news release). The question some have is: Are we correctly, or mistakenly making warm whites an interim holy grail? The incandescent in your closet still can't help you see black vs. dark blue socks. And natural sunlight is still the preferred hue for humans. Maybe we should be talking up "the full spectrum future" where we deliver better light, hue-keyed on different phases of sunlight rather than just more lumens per watt. I get the feeling that's what TIR's "lexel" technology is all about, and that they're trying to form a WiMAX-like standard for the SSL industry with lexel.

TIR made quite a splash at Lightfair this week with the official branding of lexel, which could indeed prove to be a linchpin SSL integration technology (ref: coverage). TIR is slowly honing their message about lexel but they're pulling the media's chain by spelling it in all lower case. If their intent is to indeed establish a WiMAX-like standard, I'd have branded it LeXel or leXel. (Not too late to change, TIR! The evolution would make a good story.) In my book they made a major error by affixing the trademark-applied-for symbol of "TM" to their wire releases. (FYI... the "TM" means the trademark has not-yet- been issued by the USPTO. Following said issue, the company gets to affix the classic "R" with a circle around it. Try and dupe that on the wire services!) The trademarks symbols are for spec sheets and ads, but they matter not to the press. Editors just delete them. Take a look at a typical wire service, (ref: Yahoo) and you'll see what I mean.

That aside, thanks to "lexel," TIR Systems is finally being added to my model stock portfolio. I've tracked TIR since it was a startup which was during the early days of commercial compound semiconductors. Originally listed on the old Vancouver Stock Exchange back in the 1980s, TIR became formally listed on the Toronto Stock Exchange (TSX) in 2004. As publically disclosed way back in October I think TIR will do especially well thanks to their lexel technology. TIR.TO aka TSX: TIR was trading at close of day yesterday at $1.26 (Canadian dollars), down from a year high of $2.15. In 2004 it went public and traded at about $6. Beyond Cree & TIR, the other 12 stocks in the portfolio look to have turned up from the May slip, perhaps on the speculation that the new US Treasury Secretary, Hank Paulson, CEO of Goldman Sachs (ref: Fortune mag Jun 1 article for a fun profile) might push back on that growing government spending that tends to give markets the jitters. All these stocks are traded on the USA's Nasdaq exchange and include: ANAD (Anadigics), AIXG (Aixtron), AXTI (AXT), CLRK (Color Kinetics), EMKR (Emcore), JDSU (JDS Uniphase), KOPN (Kopin), RFMD (RF Micro Devices), SPIR (Spire), TQNT (TriQuint), WJCI (WJ Communications), and VTSS (Vitesse). As usual, with all these, I'm in for the longhaul, and I try my best to tell readers at least 30 days ahead of time if I'm adding or deleting from the list before actually doing so (like my commentaries would actually change anything, but hey... you never know). Let's expect growth as people continue to catch on to what our technologies really mean.

If you have news or views to share about the compound semiconductor, LED or solid state lighting industries
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