Ann: Acquisition of Laser Diode Facility Presentation, page-14

All good questions. I won't pretend to know the answers for sure, but I'll share with you what I believe to be the case:

1.How long will it take for them to adapt the newly acquired fab to their tech?
Probably quite a while. However, I don't see this as an issue because they will continue to operate the Silverwater facility at least in the interim. The currently outsourced manufacturing steps can be brought in house in a staged manner to avoid disruption. Some can probably be done almost immediately while others may take a little longer. I see 1230sqft of "Expansion" in the Fremont facility floor-plan, so ultimately they might be able to relocate the Silverwater fab to there. In the meantime the Fremont facility has ongoing contracts to manufacture laser diodes, so there is no real hurry in terms of facility utilisation. Logistics between Silverwater and Fremont should not be a problem - I imagine they just use DHL or Fed Ex.

2. How many iterations should we expect before the reliability issues are sorted?
Management are still talking middle of this year for commencement of production - so not many. This is of course only for the first devices. However, the process for further devices currently in the development pipeline, should be considerably shorter due to lessons learned. Working in house they can also achieve much faster turnarounds and have the flexibility to stagger production and development cycles through the fab. In the presentation they state that development iterations should increase from the current 4 to 5 per year, up to 48 per year.

3. Once reliability issues have been addressed should we still be budgeting for 10,000 hours qualification or is this a mute point once they announce that reliability has been resolved?
No - yes it will be a moot point. Establishing the manufacturing processes to achieve reliability is the qualification. Duplicating this in house at the Fremont facility may be considered further qualification, but it doesn't automatically imply delay. It can be done in parallel while they continue to engage existing contract manufacturers for as long as necessary.

4. Will the newly acquired fab be economical in relation to other other applications should the desired outcome for GAN not be achieved?
It is currently a going concern operation, contract manufacturing laser diodes. As to it's profitability, I can't say.

Hope this helps. If anyone here has more information please feel free to correct or add to these answers.

NB: The above post is largely opinion and should not be construed as financial advice.