Bapcha's Stocks

Four Semiconductor Stocks Worth Owning in 2009

SPWR's COGS is 50% higher than the leaders in the business FSLR and SunTech. FSLR and STP are at $2/watt or lower.

Bapcha


On Jan 09 01:46 PM anand wrote:

> As I understand it, SPWRA (or more precisely its joint venture) buys
> polysilicon, produces ingots, converts ingots into wafers (SPWRA
> buys ingots from its joint venture), converts wafers into cells,
> converts cells into modules, and installs modules.
>
> Do you have a good estimate of what SPWRA's cost of goods sold is
> per watt excluding polysilicon (which SPWRA buys from suppliers)?
> What are your projections for how quickly SPWRA's cost of goods sold
> per watt excluding poly will drop over time.

SunPower Is a Semi - It Deserves to Be Valued Like One

PV mayhem. INTC cannot have the kind of growth you are talking about at this point in the company's life, but they did have huge numbers in the 1990's, and their gross margins then exceeded 60% almost through the entire decade [during the 1990's].

I like gross margins - because it is one thing that is hard to "fake" using accounting techniques.

Bottom-line: Semiconductor companies with gross margins between 20 to 30% do NOT deserve premium valuations regardless of growth rate. A technological advantage [like multi-junction] will sure help, but SPWR does not have that.

Bapcha
bapcha.blogspot.com

SunPower Is a Semi - It Deserves to Be Valued Like One

I've worked in the semiconductor industry for almost two decades. In fact, I count the SPWR management as people I can call and talk to at any time - since I worked for CY's CEO for four years.

In the semiconductor business, gross margins are everything. Higher gross margins allow companies to sport higher multiples [PE, PS]. Added to the fact that polysilicon based PV is a commodity business, SPWR has more room on the downside - even at these "beaten down" levels.

Sincerely,
Bapcha
bapcha.blogspot.com

SunPower Beaten up to Buying Opportunity Levels

I disagree. SPWR is a semiconductor company. Look for my article at my site or on Seeking Alpha.

Bapcha