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Tessera Technologies Inc. Message Board

  • bad.gnome69 bad.gnome69 May 11, 2010 9:36 AM Flag

    Teens won't last long

    Big ride down to 19 already, remember if you took my advise you shorted at 24. Hope you're up big money, I know I am. From here we dive to 12. Charts don't lie, just people.



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    • Tech, they said that they plan to use a fabless model for Optics and I assume that they will do the same for Cooling.

      - Rummy

    • Thanks rummy. I haven't chimed in on an earnings call since I sold my core position and have only traded in and out since. Interesting info on the mfg piece. The optics make sense since they bought the optics biz a while back (was it Digital Optics?) so assume they already have a mfg facility for the optics. Where would they manufacture ionic cooling? The margin argument makes sense but will assume that any mfg they do will be subbed out to a fab somewhere. Would be interesting to understand what sort of cost/margins/volumes would be involved, which should start to clarify as they get closer to shipping.

    • Tech, the quoted material below taken from the Q1 Earnings Call Transcript may shed some light on why TSRA is going to a product model on some of its technology. Although the quoted material dealt with Optics, I would imagine that the same reasoning would apply to Cooling.

      I personally think that the shift to a product model was also driven by a desire to avoid dealing with patent and royalty litigation and collection issues with Chinese manufacturers.

      Hope this helps.

      >>>So as we’ve been looking at Imaging & Optics and evaluating all of the opportunities that confronting us, which there are many and how we can address them more flexibly perhaps than we have in the past, if we stuck strictly to a licensing model whether it was embedded in the chip or not, it would limit the markets that we would be able to address because you need a certain amount of scale to make licensing a viable economic activity.

      Whereas if you’re shipping a product or you’re closer to shipping a product, you don’t need -- you can participate in smaller markets, get a bigger chunk of the revenue, be closer to the customer, not be a subject to the vagaries of the supply chain as we sometimes are when someone else misses a schedule and we have little control over it.

      And so, as we’ve been evaluating that, we see opportunities to ship products with very high gross profit margins, a lot of intellectual property in them but instead of licensing somebody, we would actually ship them a product.

      Now, I would say you that is what we do in micro optics. We ship lens systems. There’s a tremendous amount of intellectual property associated with those lens systems, therefore, there’s a limited amount of competition and as a result we have very good, I would say excellent gross profit margins.<<<

      - Rummy

    • Carlos nice update. One question, why would they sell silent cooling as a product when they've never been a product company? Seems out of character to jump into the manufacturing and product fray when that has never been their niche. Seems logical from the standpoint that production wouldn't be able to utilize existing mfg infrastructure but would also require that the business model change. No evidence to suggest that yet. Just curious what makes you suggest that?

    • Thanks Carlos. As always, you respond with an enormous depth of knowledge that, in this case, serves to confirm my intuition.

      This is a funny message board that I feel is weighted on both ends - using a school grade analogy we seem to attract many "A" grade posters and many "E" grade posters with not a lot in between.

      - Rummy

    • Mean while as I predicted its getting beaten slowly down and out of the teens. Long steady grind down boys, 17s fall soon, then 16s. ET CETERA.

      REMEMBER PRICE WHEN I SAID SHORT THIS PIG. If you'd lissened you would now be worth millions.

    • Thermal cooling is progressing very well. They are in development stage with 2 major PC OEMs. The key idea is THIN, SILENT, and LIGHT. One OEM has a working prototype now, it does work, and TSRA is in process of sorting out details for outsourced manufacturing, likely in Taiwan or China (Tessera will likely sell silent air cooling as a product). I expect to see products shipping around early/mid 2011 time frame. I believe one customer is a well known maker of mp3 players, touch smartphones, thin PCs and now touch screen tablets. Even if true, Tessera like all suppliers to that customer would be prohibited by contract from ever publicly confirming the relationship, even once product begins to ship. :)

      IMO the opportunity is as big as whatever you think for tablets, netbooks, and ultra thin notebooks can be. Estimates for these markets are in the range of 20-40mm, 30-40mm, and 10-20mm respectively. I am not clear what the ASP will be yet, but assume a range of $5-15 depending on the application.

    • Hi Carlos, glad you are still around.

      What is your take on the Thermal Cooling opportunity. You always seem to be well versed on TSRA new products.

      Hope the market gyrations have not been too unfriendly to you

      - Rummy

    • I forgot about Szabo. Thanks for the refresher.

      A stock will trade for $4 that has more than $8 in cash per share and has positive earnings and positive growth. Right. What a pro.

      Waiting for IP... um.... bad... to use his crushing capital and take us all the way down. In the meantime we can enjoy his victory dances for calling a stock lower in a down market.

      What a clown.

    • Umm, IP. Remember, when you are signed in as the Gnome, you have to pretend you can't spell and you can't speak in complete thoughts.

      That post belonged under your IP signon.

      And please also remember never to post under Szabo.

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