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I went back to the annual SEC filing to review the competitive landscape. Here is a link to the filing:

http://phx.corporate-ir.net/phoenix.zhtml?c=86422&p=irol-SECText&TEXT=aHR0cDovL2NjYm4uMTBrd2l6YXJkLmNvbS94bWwvZmlsaW5nLnhtbD9yZXBvPXRlbmsmaXBhZ2U9NDIyNTQ3MCZkb2M9MCZhdHRhY2g9b24=

Here is what I found:

A related group of organic materials called “nanotubes,” though not superconducting, show unusual conductive properties at room temperature and are being considered for wire applications; however, many fundamental problems remain in developing a practical wire from these materials. We monitor worldwide developments in this interesting but still very exploratory area.

Science continues to conquer new frontiers...

We have also developed a strong portfolio of patents related to second generation, or “2G,” HTS wire manufacturing, with more than 85 worldwide patents and patent applications pending, and licenses to more than 50 worldwide patents and patent applications owned by others, as of March 31, 2006.

This reminds me that many of the breakthroughs in HTS were at IBM and universities. Note the company does not outline which of these patents are licensed exclusively.

We believe the manufacturing steps that we currently utilize in the manufacture of 2G HTS wire will produce 2G HTS wire at substantially lower costs than the manufacturing techniques being pursued by competitors that are developing 2G HTS wire.

This is an important statement but, until others are manufacturing and selling wire, this cannot be verified.

There are many companies in the United States, Europe, Japan and China engaged in the development of HTS wire, including Sumitomo Electric Industries, Intermagnetics General, European High Temperature Superconductors, Nexans, Trithor, Fujikura, Furukawa Electric, Showa, THEVA, and Innova Superconductor Technology.

No shortage of competitors there.

Competition for our PowerModules™ includes products from ABB, Alstom, Siemens, Mitsubishi Electric, Ecostar, Inverpower, SatCon, Semikron and Xantrex. The HTS motor and generator products that we are developing face competition from copper wire-based motors and generators, from permanent magnet motors that are being developed, and from companies developing HTS rotating machinery, including Converteam (formerly Alstom Power Conversion), Doosan Heavy Industries & Construction, GE, Ishikawajima-Harima Heavy Industries Co., Rockwell and Siemens.

There are plenty of competition here too.

There are pages of comments about markets, competition, and technology in the SEC filing. I have only shown a brief snip. If anyone wants to know AMSC before buying the stock, this is a great place to find all the details worth considering.

So, is there too much to worry about?

The Electric Power Research Institute (EPRI) has estimated that electricity as a percentage of total energy use in the U.S. was 25 percent in 1970, has recently reached 40 percent and will increase to 50 percent by 2020.

This percentage could be even higher if electric vehicles start to be charged at consumer homes. But, remember that there is a worldwide need for conservation and growth. More efficient motors are needed as much as products that make the grid more reliable. AMSC has an interesting position in this market but it is very small company with a giant size potential market (one reason there is so much competition). Some times the little guy wins. Many times they get stomped into the competitive landscape.

W.D.
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