AKP (ASX) Ann: Response to ASX Query Letter

Originally posted by BobF ↑

You clearly are enthusiastic for xMEMS. Their product appears to be good, and I have no reason to doubt it, so I have no reason to criticise it or argue with you over that.

But I think you are missing the point about AKP's technology: namely that it is not principally aimed at the earphone market. If one takes any earphone out of ones ears and listen to it, the quantity of sound it produces in your hand is orders of magnitude less that AKP's chip is designed to produce. That is the difference. AKP's chips basically too loud for earphones without software adjustment. But even that is now feasible.

AKP's product with 1024 absolutely identical pixels is also harder to make than xMEMs simpler devices I think. There is a lot more novelty in what they have created, and as a result it has been harder to anticipate what problems will occur. From AKP's disclosures, the problems with their product have all had to do with the actual engineering of the devices during manufacture by the FAB, so they have the functionality that the designs require. As nobody has ever made a product like AKP's before it is not surprising that there have been surprises. If you have worked in a FAB you should know that. So I do not believe your dismissive assessments of either AKP or EM are accurate. I have invited you to provide any evidence to support your easy dismissal of both companies, and the FABs that are providing their services. I am still waiting for any information to substantiate those claims. Until then I personally regard your posts as being of dubious merit, and merely represent a biased predisposition to dismiss the one you don't want to win the race. The fact that you claim to hold AKP stock suggests other motives may also be in play.

So which FABs are AKP's MEMS wafers being outsourced to? If you know so much about what they are capable of making, please let the rest of us know, so we can follow those lines up for ourselves to see what their expertise includes. Naturally it would be interesting. Holders would know that AKP had selected both EM and the FABs on the basis of their supposed expertise in MEMS.

Where did you get the idea that AKP's early versions 1 and 2 were ready to be turned into products at Tower, but were not? According to AKP they were not ready. Holders of the stock are well aware that those developmental wafers were not ready for turning into actual products because they fell short of their specs in multiple ways. These versions were not the current GEN-I or GEN-II designs. GEN-I was developed at EM, and GEN-II was only made possible by those various developments made with help from EM.

CIDM is not a name that EM invented but one that is already well used in China, even if it is still a novel idea that is growing. The idea that EM has no FAB's that it "owns" ought not surprise anyone. The fact that it can bring together AKP and 3 separate FAB's into a functioning arrangement is all very good news to us. That is what makes the CIDM idea valuable to AKP. We have always understood that AKP was a 'fabless' chip producer, that had to work with other FABs in some cooperative form. Owning a FAB is hugely expensive. But one of the disadvantages of being "fabless" is that you are dependent on the good will of the FAB in question. As we have seen with the 6" wafers, this still happens to some degree. The FAB had a pre-existing scheduling commitment. As a result AKP's work got delayed. A problem yes, end of the line? No.

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Excellent post BobF. Summarises the position clearly as far as we are able to understand from given information. One issue which I would like to add which you may care to clarify however. I understand EM are responsible for physically doing the packaging part of the manufacturing process? This is EM proprietary process which they have protected by patents under AKP guidance. We have been told this IP is protected between AKP and EM with a written agreement.
We then have the question of AKP's secret sauce, presumably installed in the ASIC software?
Like yourself and others on this forum I am waiting (im) patiently to read reports of the results of independent testing of the AKP Gen II MEMS. Only then will we be able to compare performance with other so called competitor products.