It is interesting to note that SPWR in one of their previous CC stated: (correct me if I am wrong)
1) 75% of 2007 poly supply is already located. 2) 27% gross margin and 17% operating margin reached by the end of 2006.
This stands in large contrast to Jeffrey's view:
1) Most of 2007 supply contracts are short-term (less than one year). So the silicon price could be at spot market, which can be expected lot higher than current price. 2) Gross margin of 22% and opertating margin 11.5% by the end of 2006. 22.8% gross margin and 12.3% operating margin in 2007.
Jefferey's report essentially called SPWR management bluffing. All this seems bad news. But it is also interesting even with Jeffrey's strong reservation, their 2007 eps still comes out 55 cents. Although this is sizable lower than the numbers I have seen (68 cents), there still seems good resilience with Jefferey's bearish assumption. I suspect that part of Jeffrey's bearish view is already built into price.
My last post seems to dwarf the technology lead SPWR really had against the peers. It is still interesting that Q-Cell only achieving 16% efficiency ratio when using mono-crystalline. So the back-contact patent at SPWR does contribute higher energy efficiency. In other words, mono-crystalline alone is not able to lift efficiency ratio to 21%. (P.S. In Q-cell's annual report, they did indicate that multi-crystalline generally generates 2% less efficiency than mono-crystalline.)