Editorial:
CS/SSL Stock Portfolio September Update
... Semiconductor-based technology stocks that are traded over the USA exchanges, overall, seem to be slowly picking up after a fairly dramatic fall in mid July, and the 13 stocks in the model compound semi (CS) and solid state lighting (SSL) portfolio appear to be following suit. It's important to... Read the editorial...
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September 8, 2006...Japanese inventor and GaN breakthrough artist, Shuji Nakamura today received
Finland’s Millennium Technology Prize for his breakthroughs, which led
to blue and then white LEDs and blue laser diodes. (Ref: Previous
Coverage). Finland’s president, Tarja Halonen was on hand at the ceremony
in Helsinki. Dr. Nakamura, currently a professor and researcher at the University
of California Santa Barbara, won $8 million in a lawsuit against Nichia alleging
unfair compensation for the invention of a gallium nitride crystal growth process he developed while
working at Nichia. Nichia patented the process. Dr. Nakamura is said to have
invented this GaN growth process which offered lowered defect density and allowed
volume production. It set in motion a series of breakthroughs leading to the
white LED. GaN is the key component of blue LEDs, and when a color conversion technology such as a phorphor is added to the layer of GaN, the device emmits white light. The white LED with its high efficiency and long life is touted as
the future solution for general lighting.
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Epistar and Arima Opto Cautious on Production Capacity Increase
September 8, 2006...Arima Optoelectronics announced it would not increase LED production capacity
until the beginning of 2007, a Digitimes article
reported. Epistar, another Taiwan-based LED maker, indicated that it will gauge market demand to determine whether
or not to expand its production capacity, tentatively scheduled for the second
half of 2006, according to Digitimes and Chinese-language Commercial Times.
Epistar told Digitimes that demand for LED applications that are beyond the
size of handsets, remains uncertain.
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Avnet Plans to Get Serious in SSL Market LIGHTimes Staff
September 7, 2006...Avnet Electronics Marketing of Phoenix, Arizona USA, the largest operating
group of Avnet Inc., reports launching Avnet LightSpeed, which will focus on
the solid state lighting market. The company has been distributing LEDs for
some time. However, the unit of the Avnet business specifically to focus on
LED lighting was just created. According to the company, it offers access to
technical experts and supply chain management services through its illumination
focused engineers, “illumineers”. Illumineers are experienced in
LED technology, thermal management, power driver stage and secondary optics.
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"Intelligent/Wireless" Lane-Control Signal Lights From USA Signal Gets DOT Approval LIGHTimes Staff
September 7, 2006...USA Signal Technology reported that the company’s LED “Intelligent/Wireless”
Lane-Control Signal Lights (LCSs) have been approved by the Texas Department
of Transportation (DOT). The approval, a giant windfall for the company, means
that thousands of LCSs in Texas which need replacement will now be replaced
with USA Signal installations. Lane control signals are traffic signs with illuminated
color symbols which show the traffic condition for a specific lane. Unlike traffic
signals placed at intersections which merely show red, blue, or green lights,
these show a green arrow, a yellow “X”, or a red “X”.
The green arrow indicates that traffic is flowing freely in that lane. The yellow
“X” shows that the lane is a slow lane. The red “X”
indicates that the lane is shut down. Unlike most current systems, it has a microcontroller, wireless communication
with a central location, redundant power supplies to function during blackouts
and brown-outs, and several other advanced features highly sought by many departments
of transportation, according to the company.
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Philips to Double Luxeon LED Production with New Singapore Plant Scott McMahan
September 5, 2006...Royal Philips Electronics of the Netherlands, the consumer electronics giant
with over 158,000 employees in 60 countries, has announced that it will set
up an LED production facility in Singapore to produce high volumes of their Luxeon brand power LEDs. The company expects to
begin initial production of their name brand power LEDs (generally refering to LEDs of 350mA or more) in the first quarter of 2007. According to the company,
the new plant will double Philips' total production capability of Luxeons by the end of
2007. The company projects that the new plant will employ 900 additional workers in Philips' new LED roles. This auguments the 2000 employees already at Philips Lumileds, headquartered in San Jose, California USA, which originally developed the Luxeon brand. Philips said it will initially focus on city beautification lighting,
LCD displays, camera flashes for mobile phones, and automotive applications.
Over time the company implied that it would delve into general lighting as economies
of scale from increasing production are added to improvements in lighting effiency.
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Cree Recruits Cirrus Logic CFO as VP and CFO CompoundSemi News Staff
September 6, 2006...Cree Inc., a maker of LEDs, power switching components, and RF devices, reported
that the company has hired John T. Kurtzweil as executive vice president and
CFO. Mr. Kurtzweil formerly served as CFO at Cirrus Logic Inc., a supplier of
analog, mixed- signal, and digital processing solutions. Immediately prior to
joining Cirrus Logic, Kurtzweil had served as interim CFO for Quepasa Corporation,
an online company serving the growing US Hispanic community. He also served
as senior vice president and CFO of ON Semiconductor, a global supplier of power-
and data-management semiconductors and standard semiconductor components.
Chuck Swoboda, Cree chairman and chief executive officer commented, "John
brings with him a unique combination of financial expertise and experience in
both large and small technology companies, strong relationships with the investment
community and knowledge of the semiconductor business. I look forward to working
with him to build on Cree's success and to help lead the company through the
next stage of growth."Cree
News Release
Researchers Propose Solution to Account for Blue LED Brightness LIGHTimes Staff
September 5, 2006...Shuji Nakamura, the man we refer to as the blue LED breakthrough artist, is
a coauthor of a journal article in the October issue of Nature Materials. The
article describes why blue LEDs (made of indium gallium nitride) are significantly
brighter than some of the material models predict. Despite having a higher defect
density than should be able to produce the blue light which is emitted according
to some models, layers of InGaN manage to emit more light than expected. While
blue LEDs have been a huge commercial success, the cause of the greater than
predicted light brightness has not been understood...
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Epistar Licenses Indium Tin Oxide Technology for LEDs LIGHTimes Staff
September 5, 2006...Epistar Corp., a maker of LEDs located in Taiwan, has licensed technology to
increase light output of LEDs from the government-funded Industrial Technology
Research Institute (ITRI), according to an an article
in Cens Daily News. The technology uses indium tin oxide (ITO) to obtain 20-50
percent more light from an LED. Unlike conventional LED electrodes made of metal,
ITO electrodes are transparent and therefore can allow the release of more light
from LEDs.
LIGHTimes SecondPage members login for more. Guests can view membership details.
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by the LIGHTimes staff writers.
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Commentary & Perspective...
CS/SSL Stock Portfolio September Update
September 6, 2006...Semiconductor-based technology stocks that are traded over the USA exchanges,
overall, seem to be slowly picking up after a fairly dramatic fall in mid July,
and the 13 stocks in the model compound semi (CS) and solid state lighting (SSL)
portfolio appear to be following suit. It's important to keep in mind however,
that any of the companies with stocks in the portfolio trading even near their original IPO levels
are thinking themselves lucky. We'll probably never see those inflated boom
times again. So maybe it's better to simply resign ourselves to adjusting
to the current reality.
The 13 CS/SSL stocks currently in my model portfolio include: Emcore (EMKR),
Cree (CREE), AXT (AXTI), TriQuint (TQNT), Color Kinetics (CLRK), Anadigics (ANAD), JDS Uniphase
(JDSU), Spire (SPIR), RF Micro Devices (RFMD), Kopin (KOPN), WJ Communications
(WJCI), Vitesse (VTSS.PK) and Aixtron (AIXG) which are traded on the USA's Nasdaq
exchange, and TIR Systems, which is traded on the Toronto exchange in Canada
(TIR.TO). Also, as I publicly announced in my August
update, I've elected to add IQE plc to the batch, which trades on the London
exchange. That will bring my "lucky 13" up to 14. For those
of you new to this project, the intent of this modest, model portfolio, please
note my "Stock
Ownership Disclosure Statement," a link
to which always appears at the end of this McD Report column. I'm obviously
not an analyst. I'm simply a passionate observer. This experiment is
simply column fodder. But wouldn't it be great to make the proverbial "big
score" off some of these in the longterm future? Hey... we're always
free to dream.
Taking it from the top, Emcore's news late last week (ref: our
coverage) that it finally agreed to sell its 49% interest in GELcore to
the dominant partner, GE, appears not to have affected that company's stock
much. It's still down some, logging in a bit of a loss to the portfolio since
buying in. Emcore's stock keeps fluctuating just above and below its original
IPO price of $10 when it went public in the mid-1990s. I'm still gathering and
comparing opinions of how that move effects the overall SSL industry, and will
report on that, as promised, in my next column. The fact that GE selected Nichia
to be their "strategic partner" instead of Cree doesn't seem to have
affected Cree's subsequent short term stock performance. Cree's stock remains
hovering just below the $20 line and their continued low number equates to a
$567 loss in my portfolio, which unfortunately makes my Cree stock my current
biggest loser since buying in over a year ago. Cree's recent power LED news
(their EZBright1000 brand) and stepped up SiC and GaN production is especially
promising and should help the stock when that type news catches on. Both Cree
and Emcore have solid and growing stakes in other exciting CS sectors, and such
diversity pays off in these times of uncertainty. Cree's SiC and GaN substrate
business and their work on WBG-based electronic devices are obviously going
well. Emcore's stepped up emphasis on communication devices and modules, and its
terrestrial solar lines are now where that company is clearly headed since selling
off both their epiwafer foundry to IQE and their interest in GELcore to GE.
Emcore and Cree's stocks were my first buys. I continue to expect them to do
extremely well as the years go by. I'm sure both will eventually be regarded
as large, very successful companies.
TriQuint, Anadigics, JDS Uniphase, RF Micro Devices, WJ Communications, and
Vitesse are all, more or less, in the same sectors: communications. Taken as
a batch, they're all progressing fairly well, with the exception being Vitesse
which remains under the SEC gun as one of the companies caught up in the backdating
of stock option controversy. It's sad to see this happening to Vitesse because
that company, like the others in this batch, truly pioneered GaAs devices for
high level communication applications. This is why I selected these six for
the portfolio in the first place. For the sake of history and the fine people
at Vitesse who have worked so hard through the years, I hope they can weather
the storm. I'll ride it out with them via the portfolio. The other five seem
to be fairing fairly well, overall. TriQuint is on a steady rise again, Anadigics
has the best recovery so far, JDS Uniphase is holding its own, and RFMD's and
WJ Communication's stocks are both rising.
Color Kinetics and TIR Systems, along with the blue spectrum LED activities
at Cree, are representative of how the SSL industry is doing, overall. CK continues
to be the most expensive stock I purchased for the portfolio (which is made
up of just 100 shares of each, the exception being Emcore, which I added another
300 shares when it was at an irresistible bargain price). CK also continues
to be one of the best overall performers in the portfolio, earning the portfolio
$558 since my buy-in (offsetting Cree's loss). TIR, which has the Lexel
brand as its extremely impressive linchpin technology, is holding its own.
Priced at just over $1 per share makes it quite a bargain in my book. And I
want to publicly compliment TIR on having the good sense to finally go back
to capitalizing their Lexel name! For a while there, they dabbled with making
it a lower case "L", which simply caused the online reporting services
to go bonkers with the name, especially when they kept putting their "TM"
symbol after the "lexel" without even using parentheses. I repeat
to all, loud and clear... there's absolutely no need to include the "R"
for "registered trademark" nor "TM" for "trademark
being applied for" in your press releases. That's fine for product literature
or ads, but not press releases. Feel free to note that a certain brand name
is trade marked at the end of the release, or in the body of the text, but online
services need plain vanilla to be effective. "lexelTM" doesn't have
the impact "Lexel brand" has now, does it? At least they're
now doing "Lexel(TM)" which helps, but losing the "TM" in
releases would be even better.
Kopin and Spire are noted in this portfolio for their CS epiwafer and device
foundry capabilities. Kopin is a diversified company and keys into their nano
technologies and Cyber product lines, and Spire is included for its Bandwidth foundry
operation. Kopin's stock is holding its own with a small loss in the portfolio
right now, and Spire keeps showing a decent ($285 currently) in my portfolio.
Spire's Bandwidth Semiconductor foundry just inked a five-year manufacturing
agreement worth $16 million to be the exclusive wafer supplier to Principia
Lightworks in California to begin high volume production of eVCSELs as a light
source for projection display applications, including rear-projection consumer
television (ref:
our coverage). It's nice to see VCSELs back in the headlines.
And last but certainly not least, Aixtron, AXT and IQE represent, to me, the
targeted operations that represent the heart and soul of the CS and SSL industries.
Aixtron makes MOCVD equipment. AXT makes CS starting substrates. With the addition
of Emcore's EMD division, IQE is now the largest epiwafer provider in the business.
Without these companies and their competitors, there simply wouldn't be the
robust compound semi infrastructure needed to make CS and SSL devices. Without
them, our world would be powered only by silicon. And wouldn't that be severely
limited and... well... downright boring? Aixtron's stock is slowly recovering
and doing fairly well, AXT's is improving quite a bit netting the portfolio
$196, and we haven't yet officially added IQE to the list. It's currently trading
on the London exchange at 23 cents (US) per share. Since I only buy 100 shares,
that's my kind of buy-in price range!
So things, overall, seem to be picking back up, for not only the model portfolio
but for the overall CS and SSL industries we cover in these pages. Keep the
faith, guys and gals, and most of all, keep up the great work!
If you have questions about
the solid state lighting and compound semiconductor industries or
have
news or views to share, we want to hear from you! Feel free to contact
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