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Today's announcement from Oak Ridge that Pup referred to is really exciting. Yurek alluded to it in his conference call, but he didn't give any details. Now that I know it's happening at Oak Ridge National Laboratories (ORNL), I am even more impressed. It is a testament to his character and the strength of his strategic alliances that Yurek is still held in such high regard at ORNL and MIT, where he worked previously.

From the American Superconductor site, "Immediately before signing on with American Superconductor as Chief Technical Officer in August 1988, Dr. Yurek served as a consultant to the firm with responsibilities for overseeing the transfer of technology from MIT, for establishing the company's research and development programs, and for creating strategic alliances. From 1976 to 1988, Dr. Yurek was co-director of the H.H. Uhlig Corrosion Laboratory at MIT where he was Professor of Materials Science and Engineering. His work there on the development of corrosion-resistant alloys led to the invention of technology now used in manufacturing HTS wires. Prior to joining the faculty at MIT, Dr. Yurek was a research scientist in the Metals and Ceramics Division of the Oak Ridge National Laboratory."

While my father was a National Coordinator for Scientific Research, he also served as a consultant at ORNL. He often said that he was working with some of the finest scientific minds in the world at Oak Ridge. (As an aside, when I was teaching in Oak Ridge, it was widely known that there were more doctorates per capita there than any other place in the United States.) ORNL was a premier research facility and produced some of the most dramatic technological advances in chemistry and physics during the 20th century. It seems that tradition is continuing into the 21st century. Bill Madia, Director of ORNL said, "We are excited to join forces with American Superconductor to accelerate the development of this new technology. This is a compliment to the work we have done at Oak Ridge related to finding more efficient ways to transmit electricity in the future."

Quoting from Business Wire today, "We recently announced that we have selected a site in Massachusetts for the world's first commercial manufacturing of HTS wire," said Yurek. "The first commercial HTS power cables, motors, generators and other applications will be introduced on the basis of our first generation wire coming from this plant. We expect the market for these and other applications to expand significantly in the second half of this decade on the basis of our second-generation wire, which will be a form, fit, function replacement for our first generation wire." In an explanation of the technology behind today's announcement, "First- and second-generation HTS wires differ both in terms of wire architecture and the HTS compounds used in the wires. As of now, American Superconductor has over 200 patents, patent applications and licenses related to the manufacture of HTS wires and the applications of superconductors to electric power applications.

In March, after the successful completion of the secondary offering, Yurek told Dow Jones Newswires he is convinced that superconduting cable will "revolutionize" the way electrical power is delivered, comparing it to the way fiber-optics are changing telecommunications. But what is even more important to us as shareholders is his declaration: "We are a manufacturing company and not a research company. His continuing alliances with MIT and ORNL, both with history of breakthroughs in cutting edge technology, make that a certainty.

In my previous post I stated that American Superconductor's future is not dependent upon what is happening now. I reiterate, "With management skills and wise decision-making (both of which this company has consistently shown in the face of seemingly overwhelming odds), American Superconductor can work confidently to bring product to market with years of lead time on other superconducting companies currently struggling to find enough funding to become competitive."

I am continually reading about how other superconducting companies' stocks have shown greater percentage gains recently and are better investments. Look at the bottom line. With the present moratorium on financial backing, as I see it, only American Superconductor has the cutting edge technology, the proprietary position, the management, the strategic alliances, the production capability and the capital to be unaffected by the current volatility and look confidently to the future. As long-term investors, we are "sitting in the catbird seat."


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