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XSense New Weapon: Licensing

|Includes:Atmel Corporation (ATML)

We are engaged in active discussions with major ecosystem partners... to ensure that substantial capacity is available to support the forecasted rollout of large-screen systems. Steven Laub at Atmel's 2013 Q1 earnings call

What this means?

Green River Assets has started a rumor that Atmel is trying to license XSense in Asia.

He has interpreted this move as that Atmel is trying to get away from XSense but it is clear from the CC call that Atmel has big plans for XSense.

The only barrier that Atmel has is capacity.

XSense is built using a photo sensitive film made by Carclo PLC.

The film can be molded using regular photo-lithography equipment.

The same equipment used for ITO.

So the only thing that Atmel has to do to rapidly expand capacity is sell the photo-sensitive film to Asian module manufacturer and they can form the film using their equipment and just ad metallization and presto, instant XSense manufacturing facilities ready to meet capacity.

Going XSense will bring new live to all those Asian ITO manufacturers.

It is a win win situation for everyone involved.

Carclo the manufacturer of the photo-sensitive film doesn't care who does the photo-lithography they just care about selling more film.
Atmel will get a commission as the middle man and make some money selling touch controllers to the licensees.

Disclosure: I am long ATML.

Stocks: ATML