Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
GT structured their bills of materials such that all suppliers shipped goods at a very high level of completion. An entire system may have had only 12 or 15 part numbers. This may have included major options as well. All these top level assemblies were shipped to a central warehouse in HK and managed by Kerry. When an order needed to be filled Kerry would consolidate the order and ship it to the customer site where GT staff would assemble , debug and commission the system. The HK warehouse was a consolidation point for essentially all materials so anything used on an ASF system would be in the warehouse. Aftermarket spares were handled a bit differently but for new systems this was SOP.
Given that the warehouse was a huge facility and stored all materials in a central facility the monthly charges don't seem that high. There may have been warehousing services included in the number.
There were a few GT direct employees on site for high level activity but the building was leased or owned by Kerry and warehouse staff were Kerry employees.
The underlying point is that there is a lot of material in the hands of ex GT suppliers that could dilute the systems sales efforts of the Mesa units. These suppliers could sell their inventory at substantially under market as spares to ex GT customers if they could make proper contacts.
There has been nothing that I have seen on any sales activity with the Mesa units.....not even wild conjecture. You might expect some leakage no matter how covert the activity is. The Foxconn Sapphire activity of a few month ago has gone dead silent.
The Steel-Pro material was finished chambers on stands......no hot zone, powersupply,vacuum pumps or gas panels. Their minimum value is as stainless steel scrap. I agree that it would be a terrible waste of chambers if that was their fate. These are competing with 2000 full up systems in Mesa though.
Steel-Pro and Expeditors reached an agreement to return some number if chambers ......30 +/-..... to the USA for incurred shipping charges to get them to HK and return them to the US.
There has been an ongoing debate in the Docket items about what the return charges are. These could find their way to the scrap yard or some more productive use.
On Docket 1489 what does item #2 signify......."sale of all or substantially all of GTAT assets". Is that implying CH 7.
Anything new on the Foxconn Sapphire facility?
That was big news several months ago but has gone silent.
The brain drain continues. A senior ME that had been with GT since the mid 1996 has left...on his own as has a thermal modeling engineer and sr. program manager. This was back in late Feb. There is a lot of "tribal knowledge' that has left via layoff or on their own.
That means that any new staff will spend time ploughing old fields as they learn what works and does not work.
What started this topic was this paras from Xena's post which was an extraction from a recent 8K
• We've assumed we will divest Industrial Sapphire and Specialty Furnace product lines and have initiated a 363 sales process which we expect to conclude by the second quarter of 2015.
• In our Hyperion product line, we will focus our near term efforts on securing an order for BNCT (Boron Neutron Capture Therapy) application. If this order is not secured in the first half of 2015, we will explore strategic alternatives for the business. Accordingly, we have not included any revenues for Hyperion in our business plan.
What is not stated or known is why the divestiture of what had been held as components of the recover.
Is this driven by DIP financing? There was mention of "other strategic options" with Hyperion if an order / agreement could not be reached by 6/30.
The 363 sale is a court approved sale in the form of an auction.
It may not be a liquidation per se but there must be some underlying reason to do it under BK vs. waiting until they emerge from BK and have a pure arms length sale at what could be a higher price.
I do not understand why GT could not retain the Merlin technology including the IP and sell the rest of Thermal Tech. I do not understand the "rent back" comment. You seem to imply that the Thermal Tech sale would be an all or nothing transaction.
I cannot see any buyer buying the hardware without the underlying IP be it be Sapphire, Silicon Carbide or other technology.
How the court separates tangible from intangible I do not know. The value is what someone is willing to pay so a perceived high value is really moot.
What I said was that they would retain the Merlin Technology which was developed at Thermal Tech but sell off the specialty furnace and crystal growth lines.
Attached is a link about a 363 sale. It is essentially a liquidation sale of specific assets. The reference to Industrial Sapphire and specialty furnaces would in all probability include all associated IP. Specialty furnaces would include Silicon Carbide which might be of interest to Cree but they are making 6" + wafers and GT was at 4" I believe. Apple or Foxconn might be interested in the Sapphire IP but could do a "work around" most of it.
This probably includes selling off Thermal Technologies which was acquired in the last couple of years as their forte was specialty furnaces which included Merlin which GT will apparently retain.
If the BNCT is aimed at the medical arena that will be a tough. long slog as there is competition already in medical trials...Mevion for one. I am estimating 2 years to get to trials.
It is unlikely that GT will ever reach $1B in revenue again with a radically pared down offering. The Sapphire decision may be influenced by unresolved performance / liability issues...Tera Xtal still had not been paid its arbitration award the last time I checked. I believe there is a docket item.
http://www.law360.com/articles/465264/key-elements-of-the-section-363-sale-process
The crucibles were Molybdenum and thickness was an issue due to costs. The cost....$4500 each +/- was 2/3 to 3/4 material so thinner really dropped the cost but did affect process balance.
Iridium may have been considered but even more expensive, Tungsten was out due to the presence of carbon / graphite insulation and support structures in the chamber.....W+C= Tungsten carbide.....not good for the process or crucible.
Flatness of the bottom and uniform thickness had a large affect on heat extraction from unit to unit. Rate of heat extraction was a key variable.
GT had a growth furnace that produced a boule of 85 Kg to 105 Kg prior to the Apple endeavor. They tried to scale it to the 265 Kg size within the constraints of the current design chamber. This entailed some serious process modifications to the heat extraction process...Helium gas flow rates.....and power modulation to the resistance heater.None of this was linear so it was trial and error. Given identical systems they may have been able to hit the yield time lines but every system had its own set of mechanical variables which required each system to be "tuned". Tuning 2000 systems was way outside of any yield time line. If you recall they were getting some yield out of the 265 Kg systems.
I have been following the banter but the lack of any real news and the incessant "it is a gold mime vs. it is a black hole" is way too subjective for me. Not sure technical trading is real especially with a company in BK
There was an interesting article in Yesterdays WSJ paper about "spoofing" which is facilitated by high speed trading.
They place a big SELL order at a few cents below market Market 45.05 vs. 45.03) and cancel is immediately. The buy order intices others to sell at the fictious low price They then place a BUY order at the fictious low price and buy at that low price.
He then places a large BUY at 45.04 where he is joined by innocent buyers. He cancels the BUY order and sells at 45.04 and pockets the .01 difference.
Interesting article......and signs of that with GTAT?
Can you see orders places and cancelled soon after?
Nice summary. A lot of people do not appreciate that a full up system is more than the panel array that is visible. Most end use demand is AC so an inverter is require and if you want to run at night or on cloudy days so is storage. In a full up system the panels are barely 1/3 of the system cost.
Also ...good insight into the other decision making variables. In a ranking of the variables, though, the higher efficiency would hold more sway I believe. During the Gogo years...2009 ...2012...the Chinese government was funding just about everyone which led to a large over capacity. LDK has been on the brink for a couple of years now and they were BIG and fully integrated.(poly thru panels) Part of their demise was long term contract for poly at the peak price just when the price of poly tanked. The high price of poly drove them to integrate (add Siemens Reactors to make poly) with marginal success.
They either took or should have taken huge inventory write downs on their poly inventory and that was in the press a lot back then.
PB was one of GT's first customers for the original HEM cast ingots. The DSS was the next gen casting furnace. GT was then known as GT Equipment Technologies, Inc.and the BP activity time frame was 1998 thru 2002 +/-. They also sold equipment to RWE Schott Solar which also got out of the PV business.
I was in the industry from 2000 to about 2 years ago. I still follow Solarbuzz, PV tech and a couple of other e news releases to keep a pulse on the industry.
I agree that any PR at this period will be positive for GT.
They just need to be careful about too much
"puffing" as that seems to have been used liberally prior to the BK. They put out a lot of favorable predictions / comments while getting ready for BK.
The benefits to Waaree and not as obvious to me. Tying your cart to a co. in BK seems to be a weak play.
I recall that back in 2011 ..2012 the big push was in cost reduction then the market focus changed to efficiency.
The market was willing to pay a premium for higher efficiency cells vs spending $ make lower eff cells at a reduced cost.
That put a crimp in a lot of development work and caused a lot of reprioritization in R & D. 1000 Kg multi crystalline DSS furnaces shifted to 450 KG mono/ pseudo cast ingots and Cz mono gathered some steam. Multi crystalline cells have an eff below mono and n type mono can get to approx. 25 % +/-.
Good multi were up to 18% I believe. Not sure 15% panels will get a big welcome in the market place at least not in rooftop systems (industrial of residential) where area can be at a premium....in the dessert may the lower cost of lower eff panels will be acceptable.
After looking at the WAAREE web site it appears that they do not make their own wafers. They buy them on the open market and process them into active cells and then full modules and panels.
This is a fairly common practice in the PV industry although some of the larger companies have become fully vertically integrated...from making their own poly feed stock thru to panels.
These are really big companies to be able to do that.
WAAREE may decide to move in that direction and if they do and also use GT for equipment that would be good. Also GT revenue might be larger if the WAAREE sales projections are for modules and panels after the cost of Poly and wafers has been factored out.
This is an interesting article on the cost breakdown of Solar PV/
See pages 28 and 29.
The cost of a Solar PV module is made up of 4 major components: the raw Polysilicon, the wafering, the cell (Merlin technology)and the module. The cell (Merlin contribution) is nominally 20% of the cost (22% for the high cost mfgr and 20.5% for the low cost mfgr) If you assume that Merlin cuts this cost by 50% and GT gets some % of that savings via some formula....royalties?? the net revenues realized by GT is a small % of the Waree total revenues. Any revenue is good but make sure you understand that it is not a large as it would seem when it is tied to the Merlin contribution.
It sounds like Waree already has the equipment to make all the wafers it needs but if not and they add capacity by buying GT Silicon furnaces...DSS or HiCz then the GT revenues could be substantially higher in the short term. I have not seen anything about furnace expansion ....only the GT Merlin technology in the Waree PR.
http://www.irena.org/DocumentDownloads/Publications/RE_Technologies_Cost_Analysis-SOLAR_PV.pdf
Silicon solar cells (p Type) suffer from Light Induced Degradation.(LID)
The output may drop 10+% over time from the initial conversion efficiency. N type Doped Silicon does not experience this to the same extent but there were not a lot of manufacturers making N type cells.
Manufacturers should be stating the post degradation efficiency and not the initial efficiency which drops quickly after sun light exposure.
I am not sure of the underlying physics of LID or if it is process sensitive / dependent. Some type of accelerated life testing should be done by an independent lab...and there are several. Most manufacturers would use these independent test in their sales literature to promote their "superior product"
You can follow a lot of PV activity at these sites:
http://www.pv-tech.org/
and
http://www.solarbuzz.com/
Hyperion has been around since 2008....4 years before GT bought the IP rights.
http://www.businessgreen.com/bg/news/1804670/secretive-solar-firm-twin-creeks-emerge-stealth-mode
The reason for the lack of a successful commercial launch in Mississippi in 2010 may never be known but one might assume that the technology was not ready for show time and multiple investors also lost faith in Twin Creeks....could have been the management team, business plan, lack of sufficient progress or launce customer or technical aspects.
Total objectivity without detailed factual info is difficult if not impossible so my opinions are just that but tempered with some industry insight. My comments could be to be another source of info to be factored into the larger picture.
Nobody at the Shanghai PV show had exfoliated Silicon for PV applications and I did not see any Hyperion type equipment.
I believe that the prime focus in Mesa was to grow Sapphire in boules large enough to support the screen sizes of the i6 phones.
Those screens would be cut from solid bricks of sapphire cut from the boules. The slicing would be done with wire saws....from Myer Berger. The larger boules would yield more screens per boule with less waste and the inability to get to 265Kg reliably had a big negative affect on the economics.
Hyperion, in my opinion, was being earmarked for i6.5 or i7 and never intended to be part of the original i6 release announcement.
This would be for laminates screens as defined in one of the many Apple patents.
Apple was working with Chinese suppliers to slice, bevel, and polish the end screens. This would initially be from bricks cut in Mesa but eventually the entire boule would be sent to China for processing into screens. This was revealed in some of the early Docket items that included internal Apple emails. Cutting holes for the home button and other functions was a real challenge and would have been for either a solid screen or a composite one like in one of the Apple patents. Cutting holes and stress relieving the cut sapphire was almost a big a problem as boule yield.
Ion implantation is used in the semiconductor manufacturing process but their output is MUCH lower than required to exfoliate a large area needed for a silicon solar cell or sapphire screen.
Twin Creek scaled up the technology for silicon PV cells. See press release below. It only mentions Silicon as that was the original intent / purpose.
http://www.greentechmedia.com/articles/read/Twin-Creeks-Solar-Equipment-Firm-Unstealthed-in-April-Undone-in-November
https://www.facebook.com/InnovativeTechnologiesLtd/posts/552849421508669
Here is a brief explanation of the Hyperion technology.
http://howcanihelpsandiego.com/wp-content/uploads/2012/02/Twin-Creek-Technologies-Hyperion-Proton-Implantar.pdf
Some venture capitalist firms invested $80MM before deciding to get out and sell for $10MM. I am
Its use in Sapphire was a spinoff application and unproven.
Silicon has a much simpler crystal lattice than does Sapphire
and that complicates the process somewhat.
Given enough time and money GTAT may be able to develop a commercially viable method of exfoliating Sapphire in sufficient quantities to be also economically viable. They seem to have demonstrated that they can make small qtys of exfoliated sapphire but the photos that I saw on line were nowhere large enough for a cell phone screen.
My biggest concern is that GT will not be given the time...by the market place nor the money by outside investors or from sales revenue to be successful.
This is my perspective and opinion and I am sure that many will disagree. It is their money and they can spend it any way they want. I will wait for the official reog plan and see how it goes. I would rather leave something on the table between now and fall of 2015 than leave everything now.
I was referring to Sapphire for use in LED applications not returning to 2010 ...2013 levels. I was not referring to Sapphire screens....sorry if I was not clear. Also I do not believe that the Hyperion approach is commercially viable at this time...probably 18 to 24 months away if it is being actively worked on now.
GTAT did not create the large demand for Silicon for PV nor Sapphire for LED's. The Chinese government did and GTAT was at the right place at the right time and equipment and willing to build on spec to support this demand.
They went after the Apple contract because there was little other business to chase...at least in the interim time frame......12 to 24 months. Both Silicon and Sapphire for LED's had become saturated and sales had dropped a lot.....check the trend in the financials.
The Hyperion technology can be used to cleave thin sheets of Silicon for PV and thin sheets of Sapphire for a composite screen. These are two different applications and I see no linkage between Sapphire windows and Silicon PV in the any screen application.One or the other but not in the same product.
I said that the Sapphire LED capacity was saturated. The Sapphire Screen was a wild card and LED capacity may not be readily applicable due to the smaller boule size. GTAT was willing to build ASF for LED applications on a forecast vs. firm orders.
That was behind my statement that they were willing to take a risk.
Also with respect to the Apple patent ...there is a wide gulf between technical possibility and commercial viability. The Hyperion ion implantation technology is made by several companies.
The Merlin patents are associated with various subsystem components and not Ion implantation which is used in semiconductor manufacturing and medical applications.Companies like Mevion make ion implanters for the medical industry and they are already in clinical trials. It is easier to apply a medical application to an industrial one that the other way around.
My concerns with GTAT pulling out of this stall are based on a couple of things. I have not read about the 30% Solar subsidy but I believe that the installed base will support almost all the demand. This subsidy will only generate revenue for GTAT if there is a supply shortage of PV Silicon and unless the law specifically excludes Chinese PV cells they will not generate a lot of revenue.
There has been a lot of speculation on how the Chinese do an end run on these restrictions.
Hyperion was designed to make thin Silicon cells. The use in Sapphire was a stretch and unproven to date......a great idea but a long way from commercialization.
The LED substrate arena has excess capacity and the use of Silicon substrates is gaining a foothold due to the cost of Silicon. Also if single crystal GaN is perfected then both Silicon and Sapphire will go the way of the dodo bird.
I also do not believe that GTAT has the financial resources to fund a fast track program within the window of opportunity. Key brain trust is leaving weekly and the retention plan rejection did not help....not sure it even addressed product development....seemed to be focused on ASF decommissioning and sales.
I do not understand the comment and linkage of Hyperion generated Sapphire and PV viability.
The varacity / validity of my comments and its technical content needs to be evaluated on its merits based on other DD. These are my opinions based on some industry insight. Others may not agree.
There are a couple of things that everyone should factor into their decision making. If you look back at the gogo years of GTAT their sales were primarily driven by the Chinese government subsidizing anyone tall enough to put their request on the counter. That is the case for both Silicon sales and Sapphire sales. Many of the Silicon companies have gone out of business or been acquired. There was a large surplus of capacity which is still being absorbed / digested. Sapphire had a very similar situation. The large demand for LED substrates was almost a certainty so everyone was buying capacity to support this pent up demand. The demand was finite and the added capacity was a lot more than needed. Once the first orders were places the demand went to zero and again capacity exceeded demand. The use of Sapphire for cover glass on cell phones may have changed the Sapphire equation somewhat but to expect sales to repeat those of 2010 thru mid 2013 is naïve in my opinion. GTAT was at the right place at the right time due to dumb luck not perfect insight.
Granted...they were willing to commit to supporting this large demand but they did not create it only supported it.
Hyperion's function is to cleave really thin slices of Silicon for solar cells. This process greatly increases the material usage yield by essentially eliminating the saw kerf you get with wire saws.
The down side is that it requires a complete retooling of the cell line as the Silicon sheets are so thin that they are hard to handle and have a very high loss due to breakage.
I do not believe that there is anyone doing this commercially and probably not even at the pilot plant stage yet.....still at he R & D lab experiment level I would guess.
The thin sheet need to be bonded to a carrier which is not the case with standard cells. Also the process of adding collector strips and buss bars is complicated. They may be some effort to integrate Merlin into Hyperion sliced cells but I have not seen anything on that.
Based on the article that I posted and the excerpt below I would say that they use copper VS silver.
The exact % reduction is not stated but I would assume it was close to 80%. The eff increase to 22% is the key point.
From the first solar article
http://www.greentechmedia.com/articles/read/First-Solars-Quiet-Reveal-of-Its-TetraSun-High-Efficiency-Silicon
• The metallization process utilizes less than 50 µ narrow copper electrodes, which yield better conductivity and less resistive losses than industry-standard, screen-printed silver fingers. Copper-plated metallization induces minimal stress on wafers, improving mechanical yield and reliability, according to the firm. (There are downsides to copper as well, however.)
• Lower temperature coefficient (-0.3%/ °C) results in better energy production compared to traditional crystalline technologies (typical -0.45%/°C).
Merlin requires a change to the process line used to make the active solar cell. Although it is not overly difficult it does require different equipment and some pilot plant activity to ring out the process. GT was working with a Chinese owned facility in Calif. to refine the process...I forget who that was.
From the attached article http://www.greentechmedia.com/articles/read/First-Solars-Quiet-Reveal-of-Its-TetraSun-High-Efficiency-Silicon
The key technical benefit is the use of n type silicon to get the higher efficiency. There is some gain in the application of the collector and buss bars ...similar to Merlin...but that is not the primary factor.
GT has an N type Silicon process also but it is not yet commercialized I do not believe. The process to make N type cells is different than generally available P type cells so First Solar may be ahead of the pack in this regard.
The same report also listed cost of sales as $1260 with a net loss of $370......both of those numbers were omitted from the posting but clearly stated in the 8K. Minor details!!!
I agree....a Sapphire sale does not automatically equate to a furnace sale and in this case it would only be 2 to 4 systems which should not get anyone too excited.
There are probably ex GT suppliers that are trying to move inventory that they got left with to cookie cutter Chinese knock off manufacturers. If they are successful that will put a crimp in GT's plans. Not sure that any one of them could supply the estimated qty needed but time will tell. The Chinese can be pretty resourceful and beat us at our own Capitalist game as they use different rules.
I do not know much about tax code and transfer pricing but it can get pretty arcane and there is a fine....very fine line between stretching the law and breaking it. I believe that any thing that happens with the subsidiaries outside of the BK are handled differently and somehow free of BK claims....need a lawyer to parse this!!!
There is a recent Docket (1235) item from the BK trustee that wants to disallow the approval of PWC due to a
'non arms length" situation spelled out in the Docket.
Seems that GT paid off some old invoices due to PWC within 3 or 4 days of BK. Their own internal practice was to pay within 15 day of the invoice.....these were much older than 15 days and the timing made the transactions smell funny!!
Post 24246 posted the number from this link:
http://investor.gtat.com/secfiling.cfm?filingID=1628280-15-516&CIK=1394954
This is the SEC Form 8K for period ending 12/31/2014
Revenue:$889K
Cost of Revenue: $1260
Loss: $370K
Post 24246 left out the last 2 numbers.....details!!!
GT Hong Kong is a owned by GTAT but is not part of the BK.
Its activity was included in the quarterly reports to the SEC but apparently are not included in the BK reporting to the SEC.
They could be using internal transfer pricing to move the assets from one entity to the other....not sure that is allowable but someone should look at transfer pricing in the qtr ending 3/31/2015 report...due out late April / early MAy.
My comment was in referenct ro a comment made that GT showed a Sapphire sales level of $850 K +/- in the latest report which would equate to between 2 and 4 systems depending on sell price.
I missed the connection between the two posts?
At a sell of between $200 and $500K that is between 2 and 4 systems. Not sure I would get too excited about that.
On another interesting point the 8K specifically excludes activities of subsidearies (sp?)that are not part of the BK....so could they be selling systems thru HK sub and masking that activity.
What are the reporting requirements for GTAT as a whole. Do they need to still file a total corporate level report to the SEC.
That will be telling!!!FY 2014 should be close to being due.
I suspect that if he continues this tract he might find himself in contempt of court if that is possible with this type of proceeding. Twice denied should be clear enough to him.
Time will tell.
Apple may be double dipping with the solar power in Mesa.
The plant's roof was already covered with solar panels as the original facility was a solar panel factory. Apple touted the renewable energy as part of the GT venture. I have not seen anything about "new" additions.
The de-installation and packaging probably has more to do with the realization that they cannot sell that many systems before the "free rent" agreement expires and the penalty is more than offering an incentive to get the facility cleared of their equipment before the expiration date.
My glass is half empty with GT!!
This may have been posted already...if so ...my apologies.
It is from SA which seems to have highly touted GTAT so this may be more puffing!!
http://seekingalpha.com/article/2769825-gt-advanced-technologies-external-forecasts-suggest-restored-shareholder-value
This may seem like an odd question but exactly what will / can an EC accomplish.? If its purpose is to challange every decesion that is made with respect to asset valuation, business strategy and debt reduction / reorg then it would seem to me to be a drag on progress. Equity holders...me included......may not be pleased with the BK but we knew....or should have known the risks involved. Having a tantrum over a bad decesion seems unproductive. Individual stock holders is like the tail wagging the dog. The big institutional holders should lead this. We are backgroung noise.
GT HK was set up for the HK tax structure....18% HK vs 35%in the US. At that time virtually 100% of DSS and ASF customers and competition was in China so it did have some rationale.
It had to be set up as a "real "company with all the essential functions AND management located in HK.......sales,marketing logistics, fiancé, admin..including HR, Prod and inventory control and purchasing, QC....etc. There were a lot of staff in the US that reported to a manager in HK. With a 12 hour time difference communication had a built in time lapse!!
This was audited real close by the outside auditors (PWC?) and the IRS as any game playing would negate the tax benefits. There was a big office in HK with another in Shanghai. There was a complex cost accounting structure and transfer pricing that was part of the ERP system.
They took this really seriously and all transactions were tracked via the ERP system.