Nanoco Share Discussion Threads

[sinbad74] 13/11/2016 17:23

Nanoco’s Process
The company’s ‘molecular seeding’ technology uses molecules of a cluster compound to act as templates for nanoparticle growth. This avoids the need for a high temperature nucleation step (ie the process in the formation of a crystal from a solution), which reduces the energy and cost required for scalable commercialisation.
Nanosys (and Hansol) technology
This is based on Dual Injection technology, which involves the injection of one precursor solution into another at high temperature (c350degrees vs 200 in Nancoco’s process) to achieve nanoparticle nucleation. This is a less efficient process given the level of energy consumption and is also less scalable as it is batch based.

[sinbad74] 13/11/2016 17:19

Hansol Chemical is part of Hansol Group, which used to be owned by Samsung and still maintains a close relationship as a key supplier. Hansol has a market cap of $850m and reported revenues of c$500m and an operating margin of 13.3% in 2015. The company has licensed Nanosys' technology and we understand is able to make both green and red dots cadmium free. As stated above, this technology uses Nanosys’ dual injection technology (which is licensed from MIT). Hansol supplied Samsung with film to produce 1.25m TVs last year and their close relationship means that it is unlikely to supply other brands.

[howl01] 13/11/2016 17:08

PC - you make an important point that people lose sight of which is volume - the average punter looking for a new TV now expects 4k HDR - not many but the serious enthusiast is willing to part with several thousand for it. There's a point at which technology is good enough. I personally preferred Samsung's latest qd TV to LG's oled and it was £800 less. Those same models will likely be sub £1000 next year - a reasonable price bracket - expect hot competition from the Chinese with TCL, Hisense etc as well.

[howl01] 13/11/2016 16:31

Syd - think it was discussed on here before but was confusion from an article on Hansol anticipating increase in orders due to Samsung's new Pyeongtaek factory. I can find nothing suggesting Hansol are expanding production. Dow's (and Merck's) business is economies of scale and they licensed Nanoco's seeding process - not Nanosys'. Nanosys themselves couldn't produce green cfqds - the seeding process is Nanoco's strength. Samsung's focus now is to maintain advantage and drive down price - they do this by tying up supply ex Dow.

[perfect choice] 13/11/2016 16:02

It would have to be a distance much greater than half a mile V11SLR (denial of access risk, environmental disruption - business continuity risks would dictate a much greater distance), I would go for different countries but what is more likely is different suppliers entirely as there is always a risk of one company/production process even with 2 manufacturing locations. Consistency though may be an issue and Nano/Dow will need to match Hansol (or visa versa or even mix supply i.e. Nano/Dow for Green CFQDs and Hansol for Red CGQDs, many options here as to what dual supply means?). Another alternative though and more likely short term IMHO, is to split the production range by supplier, i.e. Hansol retains top end SUHD but Nano/Dow introduced for remaining TV range. I think I would prefer that latter option myself as ultimately would be greater volume.

[kuss1] 13/11/2016 15:46

We don't know how long it took Hansol to get production to where it is or how long it will take them to build a new facility. It took Dow 2 years to build their factory and Merck will probably take 18 months for theirs.

I think the problem with small batch synthesis was how to scale it. That was always Nano's claim to advantage. We've been told that Dow's factory can 'supply millions of TVS in its present configuration'. What sort of capex are Hansol facing to expand and how will this affect margins?

Lots of questions.

From that presentation, Samsung seemed clear that it was the science behind their dots which was key not their synthesis ... Dow are also not that interested in the pure science side, they are manufacturers and will focus on scaled production. Really, I see the battle as Nano vs. SAIT on the science and Dow/Merck v Hansol on mass production techniques.

Finally, it's a mistake just to talk about Samsung. What about the rest of the industry. Where will they get their supply from. There just won't be enough irrespective of what Hansol does. I think within 5 years you'll see Qdots in 90% of TVs. Some 200 million sets per year. Samsung growing 40% per quarter as it is.

[syd777] 13/11/2016 15:44

How0l, it's been dicussed here before, I think it came with Hansols results.

[v11slr] 13/11/2016 15:41

I hardly think QDs are going to cause a TV to explode. Dual source will be to allow continuity of supply in case of fire etc. So maybe that would be satisfied by Hansol mirroring the production in a different facility 1/2 a mile down the road.

[fil340] 13/11/2016 15:35

It has become clear that CFQD will roll out to Samsung's entire LCD TV range in a few years. At which time they'll need a new flagship model. This flagship tech will take the form of QD colour filters which will allow OLED-like off-angle viewing. And colour filters will require even more CFQD than the backlight film. It's beginning to look possible that CFQD demand will exceed supply by this time next year. Which was a risk stated in Nanoco's 2016 annual report.

[perfect choice] 13/11/2016 15:31

And the more they expand supply solely from Hansol, the bigger the risk of supply distribution if anything goes wrong with that supply.

Samsung are in a great competitive position of getting ready to extend the benefits of CFQDS into the rest of their TV range as they have already publicly stated is their intention. That will shake up the market.

As kuss1 said:

It is standard practice for Samsung to dual source supply. This is a strategic decision. Look what happened to their supply of batteries in the recent problems with their mobiles. If anything goes wrong with Hansol's manufacture they need to have a second source.

[howl01] 13/11/2016 15:27

Where did you see additional plant construction mentioned Syd?

[v11slr] 13/11/2016 15:26

So any supply from Dow to Samsung would only be temporary?

[howl01] 13/11/2016 15:25

Because Hansol is a contract manufacturer in this instance - they have no proprietary product.

[syd777] 13/11/2016 15:23

Hansol is going to expand its production with a new factory,but that's over 12 months away.

[v11slr] 13/11/2016 15:17

Re: Samsung. Why can't Hansol just expand their production? Didn't take them long to begin and if the demand and profits are there from Samsung it would be the obvious thing to do.

[fil340] 13/11/2016 14:49

Samsung have shown themselves to be smarter and nimbler than LG in this particular game. So it would surprise me enormously if they left Dow's output untouched. Why allow LG the full production output of the Cheonan facility? Samsung can expand their own very lucrative SUHD range by tapping Dow, and simultaneously slash LG's volume of CFQD sets. If the quality of Dow's output is at or better than Samsung's 2015 CFQD offering, then Dow's only concern will be whether they can keep up with demand.

[kuss1] 13/11/2016 13:56

I also think it's overly pessimistic to assume there will be only one global supplier of cad free Qdots. There will probably be a number. Science always catches up. It has taken SAIT some 15 years to get there. Given Nanosys expertise they may be 5-6 years behind. I think Nano are more or less there with their new generation of dots.

On Hansol, some interesting broker comments here. Essentially Hansol's revenue from Dots next year at around $60 million. Some 3-5 million TVs. Samsung want 20 million Qdot TV's. They want to push their advantage while they still have it.



Samsung Electronics' quantum dot TV is another factor driving Hansol Chemical's earnings. Since Hansol Chemical is supplying Quantum dot TV material to Samsung Electronics alone, the increase in TV sales volume will return to Hansol Chemical's earnings. Quantum dot TV is expected to sell 5 million units at just over 3.5 million units at the beginning of the year.

In particular, Hyundai Securities expects Hansol Chemical, which supplies 100% of its materials, to benefit the most from Samsung Electronics' next-generation International Electronics Expo (CES) Hyundai Securities estimates that Hansol Chemical's quantum dot material sales will jump 33% from W53.6bn this year to W71.2bn next year.

[kuss1] 13/11/2016 13:40

how101,

Thanks for that link. Great post.

It just reinforces what's been said. The tech behind Hansol's production comes from SAIT. No way Hansol could have done the pure science but they have applied a batch process to manufacture the dots.

Nanosys have not licensed cad free tech to Samsung. Their license applies to an historical IP synthesis necessary for production. As I posted before, Nanosys are now in serious trouble. QD vision is dead and Nanosys are on their last legs. They can't manufacture cad free and cadmium has no future.

ME seemed pretty certain that Hansol don't have sufficient capacity. Nano now on their 8th generation tech. Dow have paid for this newer version and it is good enough to attract Wah Hong and Merck.

It is standard practice for Samsung to dual source supply. This is a strategic decision. Look what happened to their supply of batteries in the recent problems with their mobiles. If anything goes wrong with Hansol's manufacture they need to have a second source.

But never mind Samsung, what are the rest of the industry going to go? It is not the competition with OLED that is relevant for most producers, it is the gap Qdot TV's have with other LED TV's. That gap is growing not narrowing. Samsung's next generation of Qdot TV's will set new standards and the following year again. Existing tech is straining to keep up. It will fall further and further behind.

You have to accept that Samsung are two years ahead. I now believe that. But it's two years since Samsung brought out their first Cad free TV's and now LG are ready and probably a few others.

On a wider issue, Qdots will dominate the industry for many years and that growth will be swift. I think Nano/Dow/Merck will be part of this new industry.

[fil340] 13/11/2016 13:31

The video was interesting - thanks for the post. Number of interesting snippets drop out. 1/ Samsung will not deal with cadmium, in any amount, ever. They could have launched good optical quality cad-QD five years ahead of CFQD. 2/ Samsung have all the latest tech for OLED, but do not see a commercial future for it in the big-screen market. 3/ View angle issues with LCD are due to the thickness of the colour filter. QD roadmap aims to eliminate this problem in the near future. 4/ The photo of the mass-production plant was "courtesy of Hansol". The numbers quoted indicate Hansol can provide CFQD for 3m tv's. 5/ The Samsung CFQD tech is 1-3 years ahead. This suggests Dow are providing samples of a quality equivalent to Samsung's gen-1. CFQD sets. Which in turn suggests Hansol will be providing dots for the 2017 flagship models, leaving the bulk of the CFQD range to Dow. Unless, of course, Hansol have enlarged their manufacturing base on the quiet, and are gearing up to supply 100% of Samsung's requirement.

[howl01] 13/11/2016 12:19

Woody - I took from presentation that Samsung capacity is indeed limited - around 50% at most of projected requirements and in the near term they are committed to qds. We're missing some comparative data regarding Dow/nanoco cfqd vs Samsung/Hansol - one of the oko responses did mention 'similiar' optical performance of nanoco's dots compared to Samsung's 1st generation in 2015. The report also cited the rate at which cfqd improvement was happening and projected to surpass cad tech. I suspect there's not much in it - at most a generation behind. Nanosys on the other hand appear years behind in development. Samsung pay license fees for the InP core synthesis route only. Makes sense commercially to me that Samsung tie up supply from Dow. Only other possibility is doubling of capacity in house with Hansol and I would have thought there would have been some evidence reported of that already.

[andycapped] 13/11/2016 11:59

Well I would say the main thing missing is what was said in ME's last presentation regarding Hansol's capacity- that they lack the capacity to supply for Samsung's projected demand.

So that leaves the question, where else can they get CFQD's from to make up the difference?

[woody33] 13/11/2016 11:21

I may be missing something here, but the Samsung presentation suggests that they are pretty well advanced in their CFQD development and production so not sure if they need QD’s from Dow. On the upside, the outlined advantages of QD over OLED make it inevitable that LG will have to make a significant move to QD if they are going to keep a good share of the TV market….and there are'nt many CFQD supplier options!!

[kenirogas] 12/11/2016 10:02

That's because all the stock at Runcorn is out of spec ;-)

[syd777] 11/11/2016 20:20

Meeting DEMAND is a big risk.