Spectra7 Microsystems Inc (SEV)

[SteveSchiets]

A new Belgian investor send me an interesting article this morning. It explain the battle between the copper and the fiber, or as Lebby said in the past 'the marriage'. But at one point optics take over.

https://www.cablinginstall.com/blogs/article/14280135/commscope-copper-in-the-data-center-network-is-it-time-to-move-on

But it's not just the cable. The switch (box) plays also an important role in upgrading DC's to higher speeds. In order to be successful, a company like Spectra7 and/or Credo needs both, imo

https://www.cablinginstall.com/blogs/article/14280135/commscope-copper-in-the-data-center-network-is-it-time-to-move-on


What is not mentioned in the article is that you always need an modulator when you use a AOC cables and thus increase your capex and opex.

AOC is the future, (in the end) Lebby really needs to puts a product in the market to kill off copper. That's not the case today. Copper is still a player.

Speeds are going up per 100G and you have no choice but to use S7 ACCs or Credo's AEC. That's how I see it anyway. DACs are out.

The Sidoti summary of Spectra7:

Spectra7 is fulfilling chips to enable a top global console game makers AR/VR headset due to launch in February 2023.
Spectra7's Active Copper Cable is critical to global datacenter expansion meeting both power and bandwidth requirements, at both lower capital and operating costs.
Spectra7 Active Copper Cables are designed in to all major hyperscale datacenter providers, including AWS, Microsoft, Tencent, etc.

That pretty strong, imo.

In the last interview the question is raised that there were compatibility problems with Microsoft in the past. huh? That's is very strange and, in my opinion, to ask that question that way. I've never heard Microsoft mentioned before nor did I miss it. Plus this is not about the cables but about the switch (in the box).

Microsoft apparently works with AECs because of those compatibility issues. It's a better option I was been told by people who follow CRDO. But something is changing or has changed. If Microsoft is testing S7 tech, that's because of the better value they get from opex and capex.

Suppose S7 can 'show' Microsoft they could build a better system (ACC's with better matching boxes) like they did with Sony then we really hit the jackpot. And I don't think we have to wait for 2024 but that's maybe just wishful thinking.

Now their TAM is 1 billion (cable's) but with better box technology S7 could expand TAM to 3 billion. Also in the interview. And that for a small company with a market cap of under $20M.

I do like our chances here. We are building our revenues. Our margins are improving. Sony and Tencent are revenues. Microsoft expands our TAM and could be potentially be massive.

Spectra7 is a screaming buy, imo