Replies to post #6979 on Rim Semiconductor Company (fka RSMI)

[milerman]

Nothing 100% and a successfull protoype is just that and nothing more.. It should lead to revs but we know the history of this company and I hope history does not repeat itself..

miler

[WHP03]

In a word, yes. Look for intitial orders to be taken late Q1 - early Q2 for delivery in late Q2. Q3 2003 promises to be a time of significant revenue and profit generation. The completion of the prototype and the release of the first product's spec sheet between now and yr end will indicate Cooper/Ketch's timelines can be trusted.

[spokeshave]

austin01: That depends...

Primarily on what the specs *are*. In my feeble mind, I see the following as influencing potential revenues:

1) The attractiveness of the specs: Everyone is making a lot of hoopla about specs being released before year end. I hope that happens. However, I also hope that the specs live up to expectations. Of course, it is difficult to determine expectations since the only thing we really have to go on is the statements from the company that the technology will be faster than any existing technology. How much faster is the key question. If it is revealed that NVEI can only improve on existing technology by 10%, I think that there would be little hope of real revenues. Again, in my feeble mind, I would expect to see a *significant* improvement over existing technology in order for a small broke company to break into a very competitive market. To me, significant means at least twice as fast/far as any existing technology.

2) Manufacturability of the product: Not only does a prototype need to have specs that meet the market demands, but the final product must also be manufacturable - not always a given in the semiconductor industry. This should not be a problem for NVEI since they will basically be using off-the-shelf manufacturing techniques to produce an ASIC.

3) Market demand: I believe that conceptually, there is a huge market demand. However, from a practical standpoint, the telcos and suppliers are essentially in a spending freeze right now. Any capital investment for these companies must represent an excellent ROI. If NVEI delivers as promised, the ROI would almost certainly justify the investment.

4) Price Point: This dovetails with market demand and customer ROI. Obviously, if the product is priced so high that ROI is reduced to an unacceptable level, nobody will buy. Price point will depend greatly on #1 above. NVEI will never succeed if their price point is merely a percentage of product cost. After all, semiconductors are typically very inexpensive to manufacturer, especially if someone else has to bear the Fab overhead expenses. The product markup must be based on proprietary goodwill. That is, NVEI must be able to charge a lot for something that did not cost a lot to manufacture solely because nobody else can do the same thing.

5) Competition/Patent Protection: I can think of very few examples of a company that has brought a significant technological advancement to market, where a competitor did not eventually figure out how to do essentially the same thing, yet not infringe on patents. This is a real risk, and is exactly why NVEI has not released any technical details to date. When they do, they must be ready to hit the ground running and also prepared to fight infringement cases viciously. If NVE Iahs what they say they have, every communications semi manufacturer in the world is going to be trying to figure out how they can do the same thing legally.

I am sure there are other factors, but these are the ones I see as most significant.