After much controversy and skepticism Uni-Pixel (NASDAQ:UNXL) delivered on its promise. On Monday Uni-Pixel delivered a press release announcing that it did receive a $5 million payment from a PC manufacturer for a preferred license agreement for its UniBoss touch sensor, that its printing and plating lines are qualified and production ready, and that it is on target to produce sixty-thousand square feet of touch sensor per month by the end of this month. This is a tremendous blow to Uni-Pixel's skeptics including myself. With this press release all arguments pointing to Uni-Pixel's poor past performance are blown away.
Now Uni-Pixel will no longer be the center of jokes and criticism but should be taken seriously like the emerging disruptive technology company that it is. Even Intel (NASDAQ:INTC) is taking Uni-Pixel seriously by inviting Uni-Pixel to speak at the Intel Developer Forum taking place on April 10 and 11 in Beijing, China.
Also Craig Hallum raised its price target for Uni-Pixel to $58 from $31 quoting that Uni-Pixel has increased credibility and "has a good chance to become a $300+ million revenue company by 2015." Is this increased credibility that makes Uni-Pixel now a serious investment consideration. The fact that a PC manufacturer paid $5 million to Uni-Pixel is a tremendous validation. Being that said, it is difficult to determine Uni-Pixel's future valuation given that its current valuation is based solely on unrealized production capacity. Uni-Pixel's valuation currently can only be determined by determining how much can we trust Uni-Pixel management's ability to deliver UniBoss into mass production. Monday's press release is a giant step forward for Uni-Pixel to gain that trust.
UniBoss is not the only emerging metal mesh touch sensor technology out there. Atmel (NASDAQ:ATML) and Carclo PLC (OTCPK:CCEGF) have united forces to bring to the market another metal mesh touch sensor called XSense. At the 2013 Consumer Electronic Show [CES] Atmel demonstrated a working sample of the XSense touch sensor laminated on a curved surface protected by a piece of Corning's (NYSE:GLW) Willow Glass. Atmel was awarded an innovation award for the XSense touch sensor at the 2013 CES. Currently XSense will hit the market this month on the Asus MeMo Pad.
Both UniBoss and XSense are manufactured using a reel-to-reel manufacturing process where catalytic ink is printed on film to layout the touch sensor circuit pattern and then the film is submerged in a metallization bath where metal adheres to the ink creating a printed circuit on film. Atmel showcased a roll of its XSense touch sensors at the 2013 CES proving that XSense is a true roll-to-roll manufactured touch sensor.
There has not been a side-by-side comparison between UniBoss and XSense. The debate on which sensor is better is still ongoing. Atmel's advocates point out that XSense provides a better visual performance because it is printed at sub 5 microns compared with UniBoss that is printed at 6 microns (plus or minus 1). The size of the printed circuit lines is very important because this will determine how invisible these printed circuit lines will be. Uni-Pixel's advocates claim that Carclo's process to apply the ink is more expensive and can create lamination problems. In my opinion PC manufacturers will be more attracted to UniBoss because of its price and tablet manufacturers will be more attracted to XSense because of its visual performance.
UniBoss and XSense aim to take a bite of a multi-billion dollar industry currently dominated by ITO touch sensors. ITO touch sensors are unpractical for larger screen sizes so this opens a big opportunity for UniBoss and XSense to dip in. Both UniBoss and XSense are facing the same production ramp-up challenges to meet this opportunity. The demand for economical touch sensors is there and is waiting for the supply to catch up with the demand.
Like I said before investing in Uni-Pixel requires a lot of trust on its management ability to deliver. The reason Uni-Pixel has been able to achieve its current valuation is because it is very investor friendly. Uni-Pixel management has been very open to meet with investors to answer one-on-one questions. By being so investor-friendly Uni-Pixel has achieved a very loyal investor following but at the same time it has raised suspicion from other investors.
The real question here is "Can we believe in Uni-Pixel's ability to deliver?" For me Uni-Pixel's credibility has greatly improved since its last press release but I'm not entirely sold yet.
Disclosure: I am long ATML. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.