QTMM Summary Re: Display Market
Quote:From where we sit and what we have read and gleaned, the market is dead set on going "cad free", so the fact that QMC was able to produce heavy metal free quantum dots "with increased uniformity and enhanced stability" is a big deal and put them in a very exclusive club of manufacturers that can do this AND do it in a high volume production process. This is the key - as the ability to produce heavy metal free quantum dots is out there and can be done by a number of other quantum dot manufacturers, but it is our belief that QMC's proprietary "continuous flow chemistry" patents for high volume, low capital (and what we understand to be relatively low operating) cost production is a key value driver in differentiating themselves from competitors. In that release QMC stated they had been producing and shipping samples of these cad-free dots to a number of consumer electronics manufacturers for testing. The fact that at this stage of the game many of these manufacturers were still in the dev stage of integrating quantum dots into their designs made us confident that the supply agreements for future product build up was still very much in play and that is the next plank in our thesis - which is the fact that QMC has focused on high volume production scale up and not product design. Now, several of QMC's competitors have focused more on product design and integration and that strategy has worked out well so far as several of them have been named as suppliers to electronics manufacturers in the early stage of the product adoption cycle. Our contention here is that now that the CE manufacturers are seeing that this technology has legs, the discussion has progressed to the more advanced, "next generation" integration techniques and the key product parameters are not drop in design capability but are now starting to center on: overall quantum dot performance, ability to rapidly scale up annual capacity and the biggy of course - price per gram - which are all categories that QMC has focused their efforts and we believe they will score highly against their competitors in each of these specification categories. Among much of the topical evidence we see on this front is the fact that the DOW/Nanoco partnership has made several less than stellar announcements of late related to their joint quantum dot manufacturing facility in Cheonan, South Korea as well as the fact that Samsung has chosen not to purchase quantum dots from them.
A big part of that platform is the fact that they will be taking delivery of a second micro-reactor in Q2 that has an annual capacity of 2 tonnes/per year (that's 2 million grams!). Combined with their first pilot reactor, this will put them at an annual capacity of 2,250 kilograms (or 2.25 million grams per year).
We see a very bright future indeed for QMC and their shareholders over the next couple of quarters as this industry gets past its infancy and moves towards the mainstream (and we haven’t even talked about quantum dots in solid state lighting, anti-counterfeiting, solar energy and a host of other applications that will likely follow on closely behind the flat panel industry).
