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The only time the seller "sets the price" if it is way under what the market will tolerate. In a free market economy the market sets the price. I think I recall that from an old ECON class.
There are too many players looking over management's shoulders for them to play games.
I believe that there is a requirement that they periodically disclose to the court as part of the agreement how many were sole and for how much. The actual price may be under seal for competitive reasons. Seems I recall it was every 90 days.
The market will set the price so I am not sure a minimum accomplishes anything.
Not sure why you believe that. It is in Management's best interest to get the highest price possible. They need the cash flow to hit other incentives.....R & D ..product development.
I have heard that $500K per furnace is an "internal" target for the furnaces and the higher the price the quicker they get to their sales quota.
Also most top management and a lot of the mid level staff have RSU's and Options that potentially out weigh and bonus so CH7 is not in their best interest.
The original intent for Hyperion was to minimize the amount of Silicon used per solar cell. The current process of slicing the brick using wire saws end up with a cell that has 3 or 4 times the material needed to do the energy conversion. Hyperion gives you a much thinner cell and essentially eliminated the saw kerf loss. The down side of Hyperion is that handling these thin cells becomes a real challenge.......high breakage.
Hyperion is not readily compatible with current manufacturing processed. The thin cells must be mounted to some sort of carrier for handling and stringing into an active panel. Also the frontside / back side connections need to be modified to accommodate the "sandwich"
A new process needs to be developed around Hyperion. There may be some pilot plant activity going on but I do not think that wide spread adoption is not a short term reality. My guess is that any meaningful revenue is 18 to 24 months away.
Merlin is claimed to be compatible with existing process and is in active scaling an a Chinese R & D plant in California. I have to believe that this is a licensing play VS. and equipment sales.
All post BK??
Option pricing is always a challenge. I have seen the Black-Scholes Equation used and it was not way off but did result in options being issued at $12 when the market price was at $4 which was a real downer.
Not sure Black-Scholes is appropriate in a BK situation.
In this case I would use RSU's which vest at market price on the vesting dsate. The better job the team does the higher the market price. This shares the risk and responsibility between the team and the company. I agree that options may not be the best in this situation.
Options are issued at a fixed strike price so they do not increase in value. Also the payout can be tailored by the vesting date. Generally they were paid out in annual increments over a few years. I suspect this could be adjusted to keep the carrot in view. There were some pretty high priced employees that have left that should have released a lot of forfeited stock. Some of those hay have been given to some new employees.
I believe that incentive bonuses in the form of stock options or RSU without impacting stock value could be awarded. When people leave GT and have un-exercised options and RSU's those are cancelled and go back into "treasury stock" for loss of a better technical term.
So these could be awarded with out issuing "new shares".
This would be better for cash flow and liquidity was the major issue. Obviously the strike price for options would need to be low or they issue RSU's instead. Those are valued at market price upon the vesting date.......This becomes a sure thing vs. some option price that may be underwater at vesting.
GT's base compensation has always been competitive without options and RSU's and very competitive with these. There has been a performance based MBO system in place in addition to options and RSU's which could reach 20% +/- of base. The Director level base was around $150000 +/- so Sr. Directors were above that and god knows what the VP level base was. 401K matching is in addition to these unless it has been suspended as part of the BK.
Have not seen anything about that and that would be a real disincentive to all those out side of those key employees selected.
I don't have a problem with the 28 employees ($1.4M total) that would get a retention bonus as they are most likely the "worked bees" that will make it happen. I am a bit concerned with the 9 that are getting the $2.7 M as favoritism was practiced very well.
In July GT Hyperion management was predicting another 9 months to get Hyperion to where it needed to be. See attachments
Crucibles were made primarily by Plansee although Elmet did some work as did Sumitomo. This was back in late 2012.
http://www.sumitomoelectricusa.com/products/tungsten-molybdenum-products/crucible
There was also a lot of work done with Alumina feed stock.
Orbit Alumina, in Canada, was apparently in the running but used Apple and GT in a press release that may have squashed their chances. See attachment
Should check their ticked ion the Toronto exchange
I have addressed "flavors" earlier but I believe that it had to do with the planes that the sapphire had to be cut on (c vs. R planes)ie they were going for the laminated window as well as sizes to accommodate the 2 phones plus the watch
http://techcrunch.com/2013/11/11/apple-fires-its-ion-cannons/
http://www.technologyreview.com/news/529401/cheap-and-nearly-unbreakable-sapphire-screens-come-into-view/
http://www.orbitealuminae.com/files/doc_financials/2014/MDA_Q2_2014_Final_SEDAR.pdf
Here is a link to the SA article about the timing of GT consulting legal BK advice. Not sure how they got internal invoice info or maybe it was in some BK filing that I missed.
It starts July 8, 2014.
Matt M did a lot of G2 and discovered info should have been "secret". I realize that SA was a major cheerleader of GT and many may have acted blindly on the constant good tidings !!
http://seekingalpha.com/article/2573365-gt-advanced-technologies-bankruptcy-update
I recall reading that there were invoices paid by GT to BK law firms as early as July 2014...May have been in a Seeking Alpha article.
Not sure there is any connection but it may be worth some digging.
There is a long shadow. Seed are planted long before the harvest.
Maybe just a string of coincidences.
http://courts.delaware.gov/opinions/download.aspx?ID=215210
http://www.bizjournals.com/triangle/stories/2010/05/24/daily35.html
http://www.theguardian.com/business/2001/jul/25/3
http://www.wsj.com/articles/SB1010396490400469000
I can not imagine that they took the Malasian or Qutar job with out any advance. I would guess that the Apple advance was on the books as a liability and not differed revenue...in light of the fact that it was common knowledge that it had to be paid back over a five year period ....probably as a credit against anticipated shipments.
This is one, maybe two steps removed from playing the lottery.
It is a HIGH RISK proposition and should only be played with money you can afford to loose....my interpretation of the situation. I do not think that any advisor would tell you to buy on margin or take out a second mortgage for GTATQ.
GT typically received an advance of about 40% for large orders.
This could not be realized as revenue until the product shipped and depending upon the wording of the contract there could be circumstances that required the entire order to ship before the first $ was recognized. It made for tortuous accounting to those unfamiliar.
They did have a big order for Silicon Reactors in Malaisia and Silicon PV crystal growth Chambers in Qutar that might account for a big number. The reactor project was north of $300M.
These were on the books at the time of the BK I think.
My guess as to "flavors" has to do with the crystal axis that the boule is cut on. The Apple patent for the laminated window used both C and R plane sapphire. The C axis is 90 degrees to the growth axis...at least in the GT HEM process. The R plane is at some odd angle to that axis. Any "color" for used in a window would not be desirable and any slight foreign material could make the glass flourese (sp?) under certain light wavelengths.
The laws of thermodynamics will not allow you to ever get back what you put in. The recovered heat energy was used to preheat something at a lower temp so as to reduce the need for additional elec power to do that incremental heating. Without the source of electricity in the first place there would be no heat generated to recover. No matter how efficient the recovery was a backup was still required to keep the systems at temperature. The backup system could not maintain the required operating temps.
GT at the Salem NH plant made red sapphire that probably could pass as ruby. It was called Ti Sapphire..Ti for Titanium which was used as a dopant.
The application was for lasers. They were very careful not to cross use the systems for Ti SApphire and LED sapphire as the dopant levels were very low and any residual could taint the LED or optical grades.
Virtually all of the electricity was used to heat up and melt the charge of sapphire feed stock. The electricity was run thru a big resistive heater that ran at 2100 +\- C. The heat was dumped to a water heat exchanger.
The heat recovery process was a means to improve electricity utilization.
Instead of dumping the heat to the atmosphere or a water cooling system it was captured and use to "preheat" the and upstream demand for heat. This presupposed that there was electricity available to generate the heat in the first place. I cannot imagine how Apple would have not know and appreciated the difference.
Crackle is commonly used in the industry. It is generally recycled from the left over from coring the boules to get material for LED substrates and or other applications.
If the boule yielded good product recycled Crackle should not be a problem. If a boule was a complete failure of other reasons besides cracking of off axis crystallization it probably should not be recycled.
The kerf waste is not worth the effort to recapture and recycle. It is filled with diamond dust from the saw.....circular of wire.
I do not believe that any industrially grown sapphire gets into the jewelry stream....at least not openly. Synthetic jewelry is a real threat to the industry. There are techniques to alter / enhance the color of natural stones and this is really a taboo even though the stone was natural.
Your thoughts Xena??
There is a lot of subjectivity with these types of plans and management looks out for their own...favoritism is rampant.
Both plans are cash payouts and have no equity component.
The "performance to plan" is for the upper level and the retention is for the mid level "worker bees".
A much bigger reward for the first group is that GT does not have to issue new "superior" equity but existing equity is conserved
This is potentially worth a lot more than the incentive or retention bonus.
Mevion is the company with ongoing clinical trials in St. Louis.
Web site attached.
http://www.siteman.wustl.edu/contentpage.aspx?id=7775
A Apple patent using a laminated construction...posted earlier...has both C and R plane sapphire. C plane is commonly used for LED substrates as that has the best match to GaN ...the active material in LED's.
Here is a link to the Qutar project.This looks to be for Solar cells.
http://www.pv-magazine.com/news/details/beitrag/gt-advanced-technologies-agrees-furnace-supply-deal-in-qatar_100015406/#axzz3NO7HL6B2
The Cosmos project is in Malaisia. This is for Silicon feed stock used to make solar cells. They are quite different WRT technology and process steps.
http://www.pv-magazine.com/news/details/beitrag/gtat-agrees-336-million-polysilicon-supply-deal-in-malaysia_100014495/#axzz3NO7HL6B2
I would assume that Merlin would take the form of a licensing agreement vs equipment sales. I believe that GT was working with a Chinese company that had a pilot plant in California. Primarily to get real yield data vs R & D lab numbers that re typically on the high side.
Hyperion was developed to make thin silicon wafers and reduce material loss du to saw kerf which at the proposed thickness could exceed 75 % of starting material. The cutting wire could be 3X+ the end wafer thickness.
The sapphire application was an after thought and has its own set of issue. Silicon is an element with a very regular crystal structure so the physics is well understood. Sapphire ...Al2O3...is a compound so the energy levels required differ depending on the crystal plane required. Not sure that the numbers have been worked out for all planes and have not seen anything in the literature addressing this issue.
The medical application is way out in my estimation......just getting FDA approval could take a couple of years. There are already similar technologies in clinical trials.....one in a St. Louis, MO cancer research center I believe.
Maybe a big medical electronics firm....GE....would pick it up.
This also might be a licensing play. I would hope that GT would not stray too far from their core competencies after the Apple materials foray.
http://www.patentlyapple.com/patently-apple/2014/12/gtat-actively-pursuing-sapphire-furnace-sales-and-xiaomi-is-looking-for-more-supply.html
This may be old news to you but if not here it is
Here are a couple of news blogs that I follow concerning PV.
solarbuzz.com
renewableenergyworld.com
Photovoltaics World electroiqnews.com www.omedia.com/sst
The solar industry seems to go thru feast to famine cycles every 4 or so years. China essentially owned the market and funded everything that they saw which resulted in huge over capacity. The shake out is about done and a lot of companies were shuttered or merged / acquired. LDK was huge and is barely surviving.
GT did sell a lot of polysilicon reactors....used to make the feed stock for solar cells......multi crystalline furnaces...DSS and had recently launched a mono crystalline furnaces...HiCz.
The move to Sapphire , SiC and other tech was driven by the severe down turn in the solar sector. If solar is in another upswing it may just keep GT's fat out of the fire......serendipity ..not necessarily good planning!!!
Without diversification they may not have made it thru the last solar drought.
If you plot annual sales by product grouping it sort of jumps off the page.
Back when things were good ..2011, 2012....great even.....The plant was running 24/6 with maybe 16 assembly bays. It was organized chaos as systems were being disassembled from some bays and others were being assembled. There were maybe two teams....sometimes three. It had to be orchestrated just so ...if not the isles and shipping and receiving docks would get grid locked. They may have hit 75 systems a couple of months which was pretty amazing. All the major sub systems came in fully assembled so it was not like ever nut and bolt had to be handled. The assembly sequence and modularity was fairly well defined. I have to believe that that system was in place for the Mesa project and had even been further refined.
As I said in an earlier post I have to believe that big egos got in the way of a reasonable compromise on both sides of the table. I believe that the 265 Kg boule was several months away,,,,Feb. Mar 2015. Apparenlty they were growing some good product but not consistently or predictably. I have to believe that Apple knows who is capable of what with respect to their requirements and that there is some back room negotiating to save face for all included. This may be GT providing some tech support for a third party. I do not see a clear path to success with these chambers without GT involvement at some level.
I interpret the Myer Burger Colorado activity to be associated with making the actual wire saws and not necessarily actually doing the bricking there. There may have been some bricking done there as part of the "first article inspection and acceptance procedure.
There was a lot of activity in Digitimes last year about Taiwanese activity in sapphire. Multiple suppliers in China also.
The challenge there is managing 3 or 4 or 5 suppliers and maintaining quality. That can be a real challenge. I believe that the total capacity is available but may require a lot of reallocation. Given Apples mode of operation it is unlikely that all suppliers would jump at an Apple offer.
If the 165 Kg boules give acceptable yield maybe some pricing arrangement could be worked out where the 165 Kg screens may be over the target price and the 265 Kg are under the target price.
I do not see any way that 2000 systems could be moved and made operational in less than 5 or 6 months....and that is a stretch.
Damn the torpedos, cost is not an issue, full speed ahead!!!
The infrastructure alone is daunting....cooling water and treatment, power distribution, process gas, backup power......that is really critical as demonstrated by Mesa.
Backup power needs a huge battery bank with inverters to run the plant for several minutes while the standby generators come up to speed. That is a lot of power given that these systems run at around 2100 C and have a lot of mass to keep at a steady temp.
The mezzanines that the systems go into need to be in place to receive them when they arrive. Has ground been broken for this new Foxconn plant yet?
If there are at least 3 trained teams available now they could train additional teams. I would guess that 10 teams would be about max practical due to just managing that amount of material.
The isles get clogged pretty quick with that much material although the Mesa plant is so big that them teams could be spread out.
I doubt that the same team disassemble and reassemble the machines...let alone the same machine. It would be somewhat important that all the part for a given machine be kept together ..especially if it had been run. The initial runs ring out the variables associated with a set of parts and that takes time.
I suppose that with enough trained teams the initial ones could be moved to the end sit for reassembly duty.
Some place I read something that gave the number of systems installed by month for the Mesa operation...Matt Margolis of PTT..I think. That was a flat out operation so to duplicate that pace would be about max practical. Just my estimate and opinion.
Let me add some details. My time estimates assume elapsed time but by a team of 3 to 5 people depending on the need for a crane and a spotter. The number of teams would cut the total elapsed time. A shipping container would hold multiple systems so transport time is not a serial item as they are shipped in "parallel". Even so we are talking months and not weeks to relocate and setup 2000 systems.
Disassembly would be about 16 hours assuming the packaging had been thought thru and ready to accept the sub level components. Reassembly would be more like 24 hours + due to all the alignment required. Shipping from the west coast would be 7 to 10 days and a tune up run would be 20 days for the 115 Kg boule. The 265 Kg boule would run closer to 30 days due to the additional material to crystalize and the extra cool down time for the larger boule.
Take it out too soon and the thermal stresses will crack it.
These times assume a skilled work force and would take about a month + to hit these numbers. There a are a lot of delicate parts that easily break if not handled correctly and they are not cheap!!A green team might take 2X + initially.
The major US manufacturers of graphite are Mersen, Graphtech, Americarb, Carbone of America, Carbon Composites, Graphite Engineering (part of Mersen ), Morgan AM&T, MWI (Tokai), Poco a Div of Entegris: German are SGL and Schunk and Japanese are Toyo Tanso,Tokai, Osaka Gas, Kureha, Nippon Carbon.
Some of these have more technical expertise and spen on R a& than others but you could stast with these.
The largest are SGL, Mersen, Graphtech, Toyo and Nippon I believe.
Here are a couple of links to the Apple sapphire patents:
http://www.patentlyapple.com/patently-apple/displays-sapphire/
http://www.patentlyapple.com/patently-apple/2013/09/apple-invents-a-fusion-process-that-will-add-a-sapphire-laminate-layer-to-iphone-ipad-future-iwatch-cover-glass.html
Here is a great article on Hyperion with photos of the machine:
http://www.technologyreview.com/photoessay/530656/cheap-scratch-resistant-displays/
The laminated glass was released in Sept of 2013 during the end game of the negotiations....odd ??
I believe that the Myer Burger equipment was used to "brick" the boules. These were then sent to China for wafering, polishing and final sizing. The Hyperion system was intended to exfoliate thin slices of Sapphire...probably as part of a next gen product like in their laminated window patent. Hyperion's advantage was that it could generate very thin sheets of sapphire with essentially zero waste as with the saw kerf in wire sawing. Each face had to be final polished but the starting point was closer to the end quality that the saw cut finish.
Apples may have been trying to refine the process in Mesa in parallel to the Chinese activity.
I think that Takatori was the wafering saw supplier vs the bricking from MB.
Digitimes has a free news letter and the latest releases are generally free for a couple of days and a lot of the older ones......30 t0 90 days can some times be read. The search engine is pretty good so you can read some older items.
It might be that big egos got in the way of a compromise between GT and Apple and saner heads are trying to but humpty dumpty back together again....while saving face for all.
If GT was really successful with 165Kg boules and had some yield with the 262 Kg,s it was a matter of time before they "got it right". Seems a shame to throw the baby out with the bath water if this were the case. It may have taken another 6 months to get there but I believe they would have arrived there with an acceptable product. Raw boule yield was not the only issue. Annealing after cutting the "start" and "camera" holes was also a
technical challenge in production quantities.I do not know where they were on that issue but the original agreement had Apple keeping the IP associated with annealing.
http://www.digitimes.com/tornado/v4/searchend.asp
Xiaomi may adopt sapphire for covers of 5.7-inch smartphone[Members only]
This is from Digitimes, an Asian news aggregator. It has a lot of news on what is going on in the far east. we tend to be very North American centric but there is a lot of activity in Asia.
Yes...there is a suit and countersuit. Link attached.
http://www.courts.state.nh.us/superior/orders/bcdd/GT-Crystal-Systems-v-Chandra-Khattak.pdf
GT probably has the stronger case seeing as the ex CTO of Crystal Systems went to work for Arc after spending many years at Crystal Systems and subsequently GTAT. The ex CTO of Crystal Systems and the CEO of Arc went to school together...SUNY...I believe so they go back a long ways. GT had originally licenced the HEM technology from Crystal Systems for Silicon PV applications while CS kept it for Sapphire applications.
If you look up Chandra Khattak and sapphire patents there must be close to 12 + with his name...maybe 20 +.
GT tended to use law suits as an offensive strategy. It kept the small guys tied up in litigation vs. marketing and sales growth.
Probably not frivolous but enough to slow them down.
The 2000 furnaces are essentially the same as the ones in Salem NH and those were primarily used to grow Sapphire for LED substrates and some optical applications..lenses, windows and lasers. Salem was aka Crystal Systems and that tech team was primarily responsible for the scaling activity to 262Kg.
The original systems were in the 100Kg range I believe.
These boules need to be cored 90 degrees to the growth axis to get C plane sapphire for LED's so there is a lot of waste material. Arc Energy grows theirs such that the C axis is the growth axis so there is in concept less wasted material.
Arc is very small and privately held but have crystal growth experience from Crystal Systems and St. Gobain.
Not sure which plane the phone windows were going to be but Apple did have a patent for a laminated window that used both C and R plane sapphire.