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Cypress Semiconductor Corporation Message Board

  • floppy_6 floppy_6 Feb 14, 2006 9:21 AM Flag

    5-7% increase Solar module ASP

    while wafer prices increase 15-20%, this is stated within STP's CC. Margin looks like to be depressed in 2006.

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    • Just wait and see not just for ic's anymore.
      Try autoline for panels.
      Someones spending that ipo money on it.
      Watch the ramp be fasted than thought
      Thats what ive heard.
      The numbers this qt may even get me to buy Spwr if all gos well.
      Planned on waiting a couple qts to do anything but i can see Spwr at 60 min if what im hearing comes to be.
      Still watching from the sidelines all cash.
      And my friend at Apple says Cys not allowed to comment on anything apple related so just watch consumer products sales for posoc to keep increasing is all you can do. China fab may be cranking them out for Cy to fill the voids is a good possiablity. All you can do is watch the sales figures for the qt on the parts and compair to the last qt.

    • cynyse,

      The autoline is for packaging ICs, not photovoltaic wafers.

    • cynyse,

      I should say that after hearing the latest 2 cc recently. I turned lot more positive about SPWR. If there is only one survivor left, it should be SPWR.

      Valuation another issue beyond anyone's guess. Sunpower does have tremendous technology.

    • Who else slices their own wafers?
      Early stages or not Cy taught them the process to make them cheep and the auto lines will crank up production like you could not belive unlike the others.
      Also i heard the tinner they got the better the output. So thin you can bend them in half without breaking and if the grains the right way roll up like a cigar. Stp and Q cell cant claim that. ALSO spwr re did the huge contract and are not locked in on prices poly shortage will hurt the others more than Spwr.

    • Cyboardlurker,

      One thing we might agree with each other is either SPWR fair value at $25 or $45, CY deserves to go up. CY current valuation reflects very little SPWR valuation at all.

      You can check into Q-cell site http://www.q-cells.com/2_eng.php

      Without double-check again, I recall their gross margin is around 30%, operating margin is around 15% and is producing nice profit now. So what I am buying is not only cheaper Ev/S stock, I am also buying a solar maker really making profit. How they make that kind of profit? In 2005, they already have 270 MW capacity fully on production line, SPWR has 25 MW with the new 25 MW just ramped. VOLUME make a big difference in manufacturing efficiency. Q-cell's technolgy is nothing enviable - just 15% efficiency coversion. Their growth is not much - only to increase to 350 MW level. Expanded capacity fully rely on the JV with ESLR. They take two firms' technology together not even able to match up SPWR. But I am a number person, I rather buy cheap and profitable company than a technology leader not making money. Yes SPWR has an ambitious expansion plan to reach 300 MW level. But that is sometimes around 2008 to be really fully ramped. Only at that time, SPWR can expect the same VOLUME manufacturing efficiency like Q-Cell achieved. (p.s. 300 MW expansion plan will cost $250 millions)

      Well not so many geniuses in this world can correctly predict oil price in 2008. So for every pragmatic reason, I stay with Q-cell. P. S. Q-Cell is $90 now, I start to buy Q-cell a month ago at $60 with 4.2 EV/S. How dull was German investors lack of imaginery ability for vision, how brave American investors is to vision the full future potential?

      I don't want to talk about STP, their ER CC is totally a mess. I am not even sure of the numbers of shares their EPS is based on. But STP I believe is at the same manufacturing efficiency like Q-Cell, they just ramped up their latest line to reach 150 MW.

    • I agree that thinner wafers probably won't fully offset increased poly costs, but it should help. Thinner wafers will also improve SPWR cell efficiency a little, increasing revs/wfr.

      From what I can see, QCE don't have the same growth potential as SPWR, so it makes sense that SPWR would be priced at a higher multiple. STP and SPWR are both priced around 6x 2007 estimates.

    • Simon,

      I have the transcript of ER CC. I can e-mail to you if you can write a briefing back to this board.

    • Cyboard,

      If you mean the earnings conference, I can't find it either.

      Simple Simon

    • Last Sept. Crude Oil peaked around $71. Today it closed at $57.65, a 19% haircut.

      If this trend continues, who need Sun/Wind/Wave/etc.?

      On the other hand, if this proved to be a fluke, Oil goes up again, recession is around the corner. Do you see the inversed yeild curve lately?
      http://finance.yahoo.com/bonds/composite_bond_rates
      So where Semi goes?

      "Between rock and the hard place,"

      ZC

      • 2 Replies to zcecile
      • Zcecile,

        Actually my original post was emphasized on "15%-20% increase on wafer price". In 2006, solar module ASP only increase by 5-7% while wafer price increases by 15%-20% according to STP's estimate. This paints somewhat uncomfortable picture to solar makers' gross margin. Although technology addvancement, such as higher energy conversion ratio, may offset some increase on COGS, Wafer price simply increases too fast for solar makers to absorb.

        As one moron put it, CY can't reach $20 without SPWR reaching $50. I guess we can't expect much from SPWR now. We have to hit the target by our own core CY.

        As for SPWR's real valuation, I really feel that SPWR's stock price should be decreased by at $4 - $5 to match the valuation of STP. The current stock price is largely supported by thin flow and short-squeeze.

        Although SPWR's EV/S value is a bit lower than STP, STP already makes profit and its cost structure boasts the most efficient one. STP does commit other laughable mistake - a Chinese CFO unfamiliar with US reporting method but I think that somewhat minor issue.

      • Don't forget that those are spot market prices. I would think to get a better idea would be to look at the price of oil on a monthly chart for the last 15 years. It averaged about $20 during the nineties and really started to see upward pressure beginning in 2002.

        The consistent buyers dollar cost average of oil keeps trending higher.

 
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