Since it takes 4 months to fabricate these chips, then you can imagine that it would likely take 1 year to bring a fab up to speed. You also have to form a contractual agreement with the fab to produce the chips within a spec and at a cost etc. You might spend 3 months or more doing that.
Tower Semiconductor in Israel is currently the only fab that understands the process and has a current agreement to fabricate the chips. They also have a fab in the USA. From what I can see they don't have any other fab for MEMS. So how many wafers can they produce in one year on a constant process? I can't seem to find any information on their production capacity. Spare capacity at that. Anyone have a handle on this?
If you know what the 1st year production capacity is likely to be, then you can work out the size of the initial orders, assume a large profit margin for new tech with limited supply, and then work out what the resulting share price will be.
Given the supply constraints, it would seem that mobile phones requiring billions of chips per year will not be getting this tech any time soon. Not on a large scale anyway. Eventually though.
What will high end speaker companies do then? Will they go bust? Should we be shorting them? Will they still have a role in this? How will they market a difference in a world where the best sound comes from a single chip requiring no box or amplifier? Anyone know?
As for someone buying out the company within the first few years - that might happen, but for the moment the top 20 holders have something like 65% of the company and maybe 50% of the company is held by the top eight I think. Fred owns about 20 - 25% so you would have to convince him that it was a very, very good deal.
AKP Price at posting:
$14.49 Sentiment: Buy Disclosure: Held
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