Good afternoon. A couple of questions. First, I want to make sure that I just understand the energy and environmental solutions operating loss on the (inaudible) increase quarter over quarter pretty substantially. How should we expect that to trend over the next couple quarters and what’s fundamentally driving that?
Michael R. Splinter
Yeah, I think most of it is growth in operating expenses. We had a little lighter revenue offsetting that. I think they’re going to see revenue pick up and absorb a lot of that expense. So again, we’re trending for break even pretty rapidly.
Steven O’Rourke – Deutsche Bank Securities
Are the costs rising substantially with the start ups that you have in progress now?
Michael R. Splinter
Oh, yeah. We’re supporting basically eight start ups all over the world and then building out just the normal capability to run a business.
Okay. That sounds good, Mike. If I could follow up on solar a little bit. One for Mike and one for George. When do you expect your customers to first ship GEN 8.5 panels from the get go and when do you expect that will happen with tandem.
And to George, there’s been some deterioration in the balance sheet metrics. The inventory levels are increasing to sort of the highest levels in five years and so are payables. How should we model that as we go forward as you ramp solar. And, also, if you could just remind us what your break even now is in solar and how the profitability will develop as you start recognizing solar revenues?
Michael R. Splinter
So to answer the first part of the question, we expect production panels in single junction coming off the line by mid-year, so we expect them to be selling in the second half of the year. In tandem junction we expect late in the year for panels to be coming off their lines so they’ll start selling production panels at the end of the year.
Satya Kumar – Credit Suisse
In select full panels or are these cut panels from the GEN 8.5 cells?
Michael R. Splinter
Well, the cell is whatever customers demand. As you may know, our line allows for three sizes of panels: quarter size, half size, full size. As we get into production we’ll see more and more, as our customers get into production you’ll see more and more of the full size panels just because as the infrastructure develops they’ll be less costly to install.
I had a question on solar relative to the timing of that cost per watt road map. If you look at one of the major peers out there, they’re going to be at $0.90 incremental cost per watt this summer. So if you’re saying that gigawatt scale fab is roughly, say, $0.80 if I take the kind of mid-range of your guidance that you had said before, what sort of timing do you think that number will be achieved by given that peers are going to be at $0.90 incrementally by this summer? Thanks.
Michael R. Splinter
So Tim, on the second question on the cost road map, the answer is as soon as we have a gigawatt factory up and running, one of our customers has a gigawatt factory up and running in large scale volume, which is going to take some years, it’s probably going to take a couple years to get it at very high volume. I really think specific, very precise cost numbers are hard to make at this time when we’re just first starting up initial factories. I think we’re going to learn an awful lot and as we do we can update with real numbers. Our numbers are theoretical certainly at this point. it isn’t that we haven’t analyzed them in detail. We have, our customers have. Our customers have confidence in them and have confidence in improving over what we’ve projected. But we gotta get into real production and move up the real learning curve and that’s what I think everybody in our company is so excited about. Now is the time to really get after that and do it for real.
George S. Davis
And Tim, I think you see with a lot of competitive estimates that particularly on the smaller form factors that it’s always about cost per watt, but you never get cost per watt installed and that’s a big factor.
What are lead times today? On the call, in the prepared remarks you mentioned that higher capacities are in progress. What are lead times now and what do you think they will be in about six month’s time?
Michael R. Splinter
Well, I mean, we’ve got a number of different solar products all of which have different lead times. On the crystal and silicon side it’s –
Jesse Pichel – Piper Jaffray
(Inaudible) in particular.
Michael R. Splinter
I think six to nine months on the outside and four to six months on certain products. So just depends on which products. And then obviously on the bigger tools for the sun fabs we have a little longer lead times.
Jesse Pichel – Piper Jaffray
And where would those six to nine months lead time on the first products go in another six months? Would you reduce that to three months or six months?
Michael R. Splinter
Yeah. I (inaudible) forecasting we certainly see it a road map to bring it down and I think that’s one of the advantages that both HCT and Baccini saw and joining with Applied is our ability to help them manage the ramp, bring their cycle plants down, all the things that we’ve done in numerous businesses.
What are lead times today? On the call, in the prepared remarks you mentioned that higher capacities are in progress. What are lead times now and what do you think they will be in about six month’s time?
Michael R. Splinter
Well, I mean, we’ve got a number of different solar products all of which have different lead times. On the crystal and silicon side it’s –
Jesse Pichel – Piper Jaffray
(Inaudible) in particular.
Michael R. Splinter
I think six to nine months on the outside and four to six months on certain products. So just depends on which products. And then obviously on the bigger tools for the sun fabs we have a little longer lead times.
Jesse Pichel – Piper Jaffray
And where would those six to nine months lead time on the first products go in another six months? Would you reduce that to three months or six months?
Michael R. Splinter
Yeah. I (inaudible) forecasting we certainly see it a road map to bring it down and I think that’s one of the advantages that both HCT and Baccini saw and joining with Applied is our ability to help them manage the ramp, bring their cycle plants down, all the things that we’ve done in numerous businesses.
Jesse Pichel – Piper Jaffray
That’s fair. And one more question if I could. Sharp recently announced a triple junction product using (inaudible). Do you see triple as a future upgrade in your road map similar to the way that your single junction customers are now upgrading to tandem?
Michael R. Splinter
Actually, I believe Sharp’s triple junction, Sharp has had a triple junction for a long time. They’ve used their own CVD equipment. They created a joint venture with Tokyo Electron to execute this. People are going to explore lots of things to improve the performance and efficiency, but really it depends whether adding that complexity results in reduced cost per watt. So there’s lots of things you can do to improve efficiency, but if they don’t reduce cost per watt they won’t get implemented in the production.
Steven O’Rourke – Deutsche Bank Securities
Good afternoon. A couple of questions. First, I want to make sure that I just understand the energy and environmental solutions operating loss on the (inaudible) increase quarter over quarter pretty substantially. How should we expect that to trend over the next couple quarters and what’s fundamentally driving that?
Michael R. Splinter
Yeah, I think most of it is growth in operating expenses. We had a little lighter revenue offsetting that. I think they’re going to see revenue pick up and absorb a lot of that expense. So again, we’re trending for break even pretty rapidly.
Steven O’Rourke – Deutsche Bank Securities
Are the costs rising substantially with the start ups that you have in progress now?
Michael R. Splinter
Oh, yeah. We’re supporting basically eight start ups all over the world and then building out just the normal capability to run a business.
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Igen, és a fájdalmat tettek követik.
Lehet hogy más a hibás de hirtelen felindulásból sajnos az emberek
sok mindenre képesek.
Lehet, hogy az ami neked most észerű, az másoknak akkor nem lesz az.
Én nem viaskodok veled.
Próbálóm felhívni a figyelmedet ,de nem veszed a lapot.
De tégy belátásod szerint.
Nincs Genesis-sem,OTP-ben utazok
Úgyhogy én itt ,be is fejeztem veled a beszélgetést.
GENESIS
Lassan a novotrade topic okofogyottá válik.:-))
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