Plenty of mfg space available up Hollister Ave into Goleta. They can get a cheap lease with a purchase option. CAPEX should be nowhere near $80MM unless they're REALLY ramping up production - It'd be nice if they have that kind of initial demand, of course!
There is information in the HTS peer review charts and I think in some of SCON presentation charts as well that 50% or more of the HTS wire cost is in the HTS material deposition phase. The HTS layer has critical thickness parameters. It must be thick enough to have the necessary current density performance but not too thick so that it cracks when it is wrapped in a cable.
As I understand it,the SCON RCE-CDR process is able to put down a thicker layer of material in any given pass through the deposition chamber, thus it requires fewer passes to complete the deposition process thereby reducing costs. There is also cost differences with the actual processes used themselves. This is part of what SCON claims is their cost advantage.
ACtualy JQ claimed there was significant differences in overal equipment costs, pointing specifically to AMSC which I believe is simply due to the complexity of AMSC's process.
My guess is that the $80 Million they have identified will be enough for then to acquire land and fabricate quite a few lines. They may not do them (the lines) all at once simply because of the need for skilled folks to setup the lines and then, of course operate them. As I mentioned in an earlier post, training will be significant.
Now all of this is making sense. I thought it was strange how she popped up on the last CC out of no where. She was tipped off that SCON was working on this process and an announcement was imminent. She was very good and asked great questions....unlike the neophyte from MDB.
Someone mentioned on the board that SCON completed the trial last year and waited until they issued stock options (which I believe was their yearly bonuses).
I expect a lot more analysts on the next CC. Maybe it's time for Buchanan and JQ to hit NYC and wall street.
I see you guys have been paying attention.
Equipment costs for big production vacuum machines aren't so different from process to process because you have to control basically the same things. Pilot machines can vary a lot depending on their size and throughput. I think Quiram must've been referring to the pilot processes, and as R2 pointed out he was probably only talking about the supercondutor layer. For what I can figure out SCON's advantage is machine operating costs not equipment costs. My guess is that they will have to raise a similar amount of money as AMSC did to really have production capability. But first, of course, they need to show that their process is indeed more efficient/cheaper than their competitors.
Well, here's my take on whether or not SCON will really go into the manufacturing.
The recent SEC filing had a great deal of text dealing with the issuance of Preferred shares, unlike any previous filing. Furthermore SCON got a legal opinion (to forestall NASDAQ or other's from protesting SCON's actions regarding the filing.). The Preferred share thing is the big leverage to prevent a hostile takeover, so I see it as current SCON management telling the world don't you dare try to takeover without our consent.
JQ was very intent when he answered the question about capex and the very low cost associated with putting 1 km production line in place. That in effect was an announcement to future investors that the proceeds of any future stock sales would be put to good use.
Regarding the AMSC order, as JQ characterized it, it was an order placed in advance so as to commit AMSC's production capacity for the order well in advance of the time that the HTS wire was needed. That prevents competitors from getting a production committment and considering the very limited supply sources for 2G wire, is a good business strategy. AMSC had to raise capital to build out their production capacity to fulfill the order and of course that capex requites lots of lead time. The specifics were of course all discussed during the discussions between AMSC and their Korean customer.
I agree that it doesn't make sense to expand their present location, but they cannot range too far afield and keep their people with the relevant and essential experience involved as they should and must be.
I like what they are doing regarding their production. They are building sequentially two production lines for their 1500 km capacity. The first line will be the one on which they make the most mistakes and hopefully will learn from them and be able to apply that to the second line. Of course they will make mistakes on the 2md line too, because that's the nature of human beings (excepting me of course!) LOL! Thus then can tweek the processes on the first line until they get the right quanity of wire with the best yield. Then they can use the lessons learned in the fabrication of the 2nd line. The 2nd line will prove out the consistency of their process and give them (and potential investors) confidence that they can continue to add capacity by build more lines. Thus a big hunk of the $ 80 Million will be for the real estate to locate the larger factory. They can even start with a fairly good sized piece of land with a small building and gradually add more buildiong and more lines as demand rises.
That said, there will sure be many hurdles for SCON to overcome before it all comes to fruition. One of the questions that investors have to consider is whether the present management team has the ability to make it happen??
No warren I listened to the call today. JQ stated they could build the two 1km machines for around $10K. It was fairly late in the call when the female (Elaine clay I believe) from Jeffries & Co. as the question about capex. Probably between minute 26 and minute 29/30 near thge end if the CC.
I only reported what JQ said in the CC. I don't know anything about the details of the processes that AMSC or SuperPower use, but JQ stated a number which I didn't write down but which was very much larger. I suggest you listen to the CC. It's available on the SCON website under "vents"
Their facility is actually located in Goleta which is in the county of Santa Barbara. They're located in an industrial park but it's very small. They're planning to enlarge their facility but nothing to meet worldwide demand.
Their facility is big enough for a typical R&D Center. They will have to buy/rent more space to really manufacture the product. It's a good problem to have but SCON will not handle it in SB.
IMO GE will come in and either offer a Joint Venture (60% chance) or buy the technology......Notice I said the "technology" and not the company. I've seen it before with small technology companies.