There is indirect evidence that the amount of material used will be closer to ~40 grams per phone rather than 100 grams (Mesa plant is slated for having capacity to make around 200M phones / yr, assuming 2600 furnaces, 200kg yield per 20 days, you get to 50 grams per phone in perfect conditions. But accounting for kerf loss and other inefficiencies, it would have to be less than that. maybe 35 or 40). Meaning it's not quite as bad as in my original estimate. 100 was a clearly loss upper bound in any case.
And all of this analysis flies out the window if they go with laminates instead. or if Apple does GTAT favor and shares some of their pain (not that I'd expect such a gesture from them).
In any case I really hope they talk about their margin in the CC.
If it costs them an extra $0.5/phone and they're selling it to Apple for $10/phone, say instead of having it cost $7.8 and having 28% GM it costs $8.3 and now they have 20% GM that's pretty huge.
I don't think it's as bad as $0.5 a screen though. I just want to establish an upper bound.
one other comment, if Apple will really be using sapphire laminates, a much smaller quantity of it will be used per phone and the cost difference will become negligible.
How much raw alumina goes into each screen on average (disregarding kerf loss and such, since it gets recycled)? For reference an entire iPhone 5 weighs 112 grams.
From my cursory check at alibaba, price increases very steeply with purity of the material. They need high purity for growing sapphire. Price for 5N purity (99.99%+) alumina is quoted at $20-80/kg there.
If there's a 30% difference between the suppliers used, and say both sub $20/kg range (volume discounts), we could estimate that the extra cost is no more than $5/kg. How much does that work out to per phone? could it be as much as $0.5? In that case it will screw gross margins by 5%.
If you have more accurate numbers to plug anywhere, please post corrections
yes, I see it the same way. major points I'm hoping they do cover in the CC are reiteration of 2014 rev (narrowing if possible) and gross margins from the Mesa operation at 26-28%. There may be some concern here IF they were hoping to use cheaper alumina to get these figures, depending on what Apple pays. If we get both of these the stock should recover a portion of its relative strength. Maybe the market was selling it off based on such a perceived risk to the GM, so it'll really help if TG can address it.
The next ER is almost a non-event compared to the Q3 one we'll get in three months. In fact, the real crucial results from much of what the company's doing should come in at 2015. If we win that year, that's the "war" from my perspective. Still a quite far off, but inching closer.
nobody cares about the size of individual trades, only price and volume. Today volume is very low, the stock is being walked down and people aren't stepping up to buy it. They can't manipulate the market into NOT buying. Today is evidence that nobody wants to catch the falling knife that is MNKD.
It looks like it's firmly downtrending. There aren't even volume spikes as price keeping making new lows. inst money is still scared of catching a falling knife it seems. Post adcom stable price was low $6. To be honest, I expected at least some of the rally to stick post approval. but it looks set to give it all back. Maybe we'll see low $7s hold though.
LDK zombie wouldn't stay dead. They seem to enjoy running at a loss - no matter how big the loss - just for the sake of screwing all the other manufacturers out there. Are they out for vengeance or what? I don't get it.
GT acquired Crystal Systems in 2010. They were not simply a "solar cell developer" before Apple came along. Another thing, they (GT and Apple) were working on making this project since 2012. Go over the CC transcripts again and you'll see.
Oh, and I doubt ER/CC will give us ANY info about what's going on with Apple product timeline or the exact way they will utilize sapphire. We might get a guide down for this year and no changes next year which is -probably- code for admitting there was a yield problem or some other issue with the ramp up at Mesa. or they may reiterate and then the stock may recover some.
write nonsense, then call it "basic accounting", hoping that makes it legit. Nice try. They're the lowest cost supplier of a durable commodity good by a large margin, and you're babbling about writeoffs.
writes it off? are you serious? what, will the sapphire boules rot or something? or maybe you're expecting the market price for sapphire to go under GTAT's cost to make them in Mesa?