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AMSC is working with Consolidated Edison in NYC on a new secure grid using HTS. This is at least partly a response to the blackout in Queens a few months ago. If this works out, it could be huge.

http://www.energycentral.com/site/newsletters/ebi.cfm?id=369
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Just a word of warning. I've been following AMSC since 1999. That would be going on 8 years. Your post: "AMSC is working with Consolidated Edison in NYC on a new secure grid using HTS. This is at least partly a response to the blackout in Queens a few months ago. If this works out, it could be huge" could derive identically from a post in 2000 or 2001, 2004, etc.

This Edison project has been going on forever. The second generation wire was to be the turning point, etc.

We are talking another decade or 2 of time to get any material penetration at all in the market, if then. Fun to follow, fun to watch, but the story has not changed in nearly a decade.

Tinker
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I think you're wrong on what you've said.

AMSC is working with Consolidated Edison in NYC on a new secure grid using HTS. This is at least partly a response to the blackout in Queens a few months ago. If this works out, it could be huge" could derive identically from a post in 2000 or 2001, 2004, etc.

I don't think so.

It's true that infrastructure - all infrastructure - in the US has been under-invested in for many years. But I don't remember anything like an HTS based secure supergrid being funded or even officially submitted years ago - much less co-funded by the Department of Homeland Security. The latter is the reason that the announcement got as much hype as it did..

This Edison project has been going on forever. The second generation wire was to be the turning point, etc.

Huh? Yoiu're mixing things up. And I personally consider 2-g wire progress to be ahead of the curve, not behind it.

We are talking another decade or 2 of time to get any material penetration at all in the market, if then. Fun to follow, fun to watch, but the story has not changed in nearly a decade.

I don't invest in stories; I do invest in companies. And AMSC's story has changed dramatically over the last ten years. It is, in essence, not the same company. Even the HTS wire segment is not doing the same thing now as ten years ago. The first product line expected to be economic - supermachines - which are economic with 1-g wire, have essentially gone to zero. (The market has spoken). In grid applications, 2-g HTS based Fault Current Limiters have now taken the SuperVar's place in the business model - and rightly so: over have a dozen big-name hardware companies are now designing fault current limites to make use of 2-g wire, something that was not happening with supermachines.

On the other hand.......AMSC started a series of acquisitions years ago to make it a real power in the power conditioning industry; and, now, in the wind industry. Revenues for the power systems segment increased 100% the past year - and is forecast to do another 100% this coming year, bringing the whole company to EBIDTAS positive.

Meanwhile, with the strategic shift two years ago to leave 1-g totally and to jump feet first into accelerating 2-g production, AMSC is actually ahead of original projections in terms of mass-producing truly economic HTS wire.

On top of the technical stuff, the company has, in my view, been damn well managed. Each power systems acquisition has been not only an immediate positive to the company as a whole; but was also done on extremely favorable terms to AMSC, better than we had a right to expect.

You may state multiple times that you've been following the company for decades; but I don't buy it.

jp
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JP,

I suggest you do some historical reading on this board, on the L'union board, and some old press releases.

I can say the same thing about CREE as well. This is all de ja vu.

I will state for a fact that the 2g wire was suppose to be the impetus for AMSC to penetrate the market. I don't recall what ate for sure, but I believe 2003/2004, AMSC would be rolling out x miles of wire, blah, blah, blah.

Belief and fact are not always the same. The history is simple to investigate. Even simpler if you lived through it.

As for the present, maybe this time it is different. Maybe this time AMSC is really going to penetrate the wire market. Then again, their power switching business was suppose to be big by now, and the Navy engine project was suppose to be a break through, etc.

CREE is probably the most palatable of this sort of situation. In 1999 the Blue Laser and Power switching were right around the corner, and the new power conducting acquisition may be the most important event in the history of the company. Every year the same promise.

AMSC is similar, and I just could not help but note that exactly what is being stated now about AMSC was stated 5 years ago and even longer. You don't believe me, you don't have to. Read the historical record. The Fool has some good historical posts.

Tinker
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Here are just 2 posts. The second one is a report from an AMSC earnings conference call. Dig through there you will get that de ja vu feeling as well.

http://boards.fool.com/Message.asp?mid=12711848

http://boards.fool.com/Message.asp?mid=12582267

Tinker
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Yurek says 10000km per year HTS wire production will "just be a drop in the bucket by the second half of this decade."

Here is one projection by Yurek from the 2000 earnings conference call I linked to.

Anyone know how many kilometers of HTS wire AMSC is producing at present for any sort of commercial deployment?

Maybe AMSC really is there, but looking at the stock dilution here, and that the story continues to remain the same year after year, I have my doubts.

One thing that becomes clear after awhile is that management is in place to enrich itself, and a public company becomes a vehicle to create wealth for oneself through continual stock option grants and keeping out that veil of hope that the 10 bagger is around the corner. It is not just AMSC, but practically every development level company. After a while most of these companies simply exist for the stock price. AMSC is producing real technology, real research, don't get me wrong. But I see no evidence that AMSC's products are any more ready to take the world by storm today than they were say 7 years ago.

If this is an erroneous opinion, please provide me some links to educate me about the actual progress AMSC has made. That would be of great value to me and the board.

Tinker
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Tinker,

CREE is probably the most palatable of this sort of situation. In 1999 the Blue Laser and Power switching were right around the corner, and the new power conducting acquisition may be the most important event in the history of the company. Every year the same promise.

You sound like a broken record. Maybe you should upgrade yourself.

Jim
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Jim,

No upgrade needed, I call them like I see them. Anyone have any links to show that AMSC products are any closer to any large scale market than they were for example in 2000?

Tinker
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Tinker,

No upgrade needed, I call them like I see them.

LOL! Like DNDN?

Anyone have any links to show that AMSC products are any closer to any large scale market than they were for example in 2000?

Not me. I'm following AMSC, but not very closely, and any example from 2000, or even 1999, would be irrelevent.

Jim
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Jim,

If you remember, I was correct on DNDN. Remember the AC meeting.

Correct on ELN, correct on VRTX as of late, correct on RMBS multiple times, yada, yada, yada.

Get off the personal kick. I'm into the substance of the investment. If you don't want to go there, that is your issue.

The problem with AMSC, as I stated before, is I don't see anything changing.

There was so hint that it might be. Let me know if you have some real evidence in regard.

Tinker
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Tinker,

If you remember, I was correct on DNDN. Remember the AC meeting.

No, you were wrong. You were pumping DNDN until it blew up.

Get off the personal kick. I'm into the substance of the investment. If you don't want to go there, that is your issue.

If you don't want advice, that's fine with me. However, there might be other people who read these board who might want to know your track record.

Jim
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Jim my investment record is dang good. And unlike most everyone else on the Fool I do it quite often in real time. If you have a problem with me the ignorebutton is a great tool.

As to my prior post any links as to AMSC products with real prospects of material market penetration. Ive provided plenty of links to more of the same.

Tinkering
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Tinker, did you even read my post?
And how can anyone in late 2007 be posting solely Y2k posts and expect to be taken seriously? Particularly when I've already pointed out - in many posts the past two years - how AMSC has evolved in just the last 24-36 months. And you're going back solely to Y2k? You gotta be kiddin' me. You can't even go back to Y2k solely on a company like GE and draw any direct extrapolations. It's - frankly - just plain dumb.

I'll take one more breath and address a couple of things - if you're interested. But we've had a couple of good discussions - intelligent, fact-based assessments - the last year or two on the company; based on research; on visiting the company and talking to the CEO, CFO, and others; of researching the few other companies involved here. And - while this may disappoint a tad - it's all circa 2006-2007. Going over the posts the past 24 months of W.D. Crotty/dduct, and frankly, myself, would be one place for you to start- if you're truly interested in boning up on the company a little.

I will state for a fact that the 2g wire was suppose to be the impetus for AMSC to penetrate the market.

No, that's not correct. The 'penetration' was to be done - completely - with one g wire; and that original schedule had one g wire dominating not only through this year, but to and beyond 2010. Remember that 2g wire was originally not in the plan as being necessary, at all, to initial profitability and penetration. That turned out to be wrong on a couple of accounts:
- by all accounts, through 2004, 2g wire was perceived as a necessary requirement for a long-term economic perspective for power line applications only.
- 1-g wire was considered economic in supermachine applications; ie,
- SuperVar rotating machines for the grid; ie, "grid shock absorbers'.
- large ship motors; and, large ship generators.

- It was recognized - up through 2004 - that 1-g solely as power cable was going to be uneconomic, since it had cheap copper to compete against. The 2004 time period started to change that economic equation, of course, as the price of most raw materials - and especially copper - started to skyrocket. After all, when AMSC was first started in the late '80s, there was no truly spectacular growth in China and India yet; those companies didn't dominate in demand for raw materials. None of that was foreseen; certainly not to the extent it has really happened.
So the need for second generation wire became clear; i.e, that wire more cheaply produced than 1-g, which would be economic even in straight power cable applications head to head with cheap power. BUT, it was recognized, then, that 2g wire would not be as good electrical performance wise as 1-g wire; just cheaper.

That's what changed in 2005: long-term DOE R&D funding, as well as AMSC's own producibility work, made it clear for the first time that 2 g wire could not only be produced - but that it probably could be produced in volume, and performance-wise even approach that of 1-g wire. The company then made its 2nd big strategic change: seeing that 2g wire could, with a full court press, be brought on years earlier than thought- and be just as good as 1-g wire - AMSC made the gutsy move to scrap 1-g wire entirely. and focus on bringing forward the new, improved, 2-g wire sooner, not later. The entire 1-g wire was written down to zero; the remaining inventory has been sold off slowly over time, with about 179k meters currently left on the floor in Massachusetts. That old, abandoned, one-g wire is what is being referred to in those ancient - and, now irrelevant - Y2k postings that you cite.

It was also recognized when announced that this shift - while bringing true, HTS economic profitability forward - would in the years immediately following 2005 look like a downturn, since they would not be manufacturing and selling new 1-g wire. They were very upfront about that. I think that it's clear now in 2007 that they made the right decision in 2005, And by most accounts they are probably the current leaders in the world in 2-g producibility - and a 2-g producibility that's ahead of the original curves. (In fact, it's ahead of where they were predicting when they made the strategic shift: then, they said that they thought they could get to producing 360k meters/year of 2-g wire by Dec. 2007. Now, it looks like by that date they will be at the 720k meters/year level. Not bad at all).

(The first big strategic shift by AMSC, by the way, was diversifying into the non-superconcuting power systems business. Something that diversified the company while HTS was being fully developed; and that played into the very real need for electrical power quality increases as well as infrastructure revitalization. It was extremely prescient: that purchase by AMSC led, eventually, to the last two acquisitions of the past 12 months - including that of Windtec. Post the acquisitions, that power systems business now is growing at 100%/year; and will bring the entire company to EBIDTAS positive next year. And the company is, right now, a 65% wind company - something not envisioned at all back in those ancient Y2k posts you cite).

I don't recall what ate for sure, but I believe 2003/2004, AMSC would be rolling out x miles of wire, blah, blah, blah.

You're correct, that's all 'blah'. Because you're referring to old 1-g wire production, which it was announced in 2005 would be abandoned in favor of 2g. That was the gutsy -and, it looks like, correct - decision. By solely focusing on outdated Y2k posts, you've totally missed the point that the (old) product your talking about is no longer even in production. (Which turns out to be a good thing - as they projected).


I can't address CREE. I don't know anything about it. Either.

Cheers,

jp
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jp,

I can't address CREE. I don't know anything about it. Either.

Tinker's posts about Cree where his distorted recollections from 1999, not even Y2K. Tinker claims to be an expert on Cree but couldn't even describe its business, products, markets, etc. without going to the Cree web site.

Jim
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Thank you all for the lively, informative discussion.

I'm not selling AMSC yet, but any time management hypes and does not produce, post Sarbox, is a yellow flag. See EEE, XNL, ENT. Contrast with ENER where you could have made or lost money with sincere management depending on your entry point.
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I'll take one more breath and address a couple of things - if you're interested. But we've had a couple of good discussions - intelligent, fact-based assessments - the last year or two on the company; based on research; on visiting the company and talking to the CEO, CFO, and others; of researching the few other companies involved here. And - while this may disappoint a tad - it's all circa 2006-2007. Going over the posts the past 24 months of W.D. Crotty/dduct, and frankly, myself, would be one place for you to start- if you're truly interested in boning up on the company a little.

Thanks for the reference info, jp.  I do not have your length of perspective on AMSC but share the view that it is not the same company now that it was two years ago.
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I will state for a fact that the 2g wire was suppose to be the impetus for AMSC to penetrate the market. I don't recall what ate for sure, but I believe 2003/2004, AMSC would be rolling out x miles of wire, blah, blah, blah.

It is interesting to look at the past in order to determine if a management team is good at getting the future right. To say AMSC has been good would be incorrect. But, to ignore today's company without looking at its technology is as wrong as projecting the past as a straight line to the future.

It would also be foolish to not look at Sumitomo (the big fish in the superconducting wire pond) and see if they were optimistic with their projections. Trouble is, they make very few projections because superconductor wire is a very small part of their business. They are a big unknown in terms of R&D.

I thought the key to AMSC's superconducting future was higher temperatures. For example, tests showed that 348 superconductors with today's performance levels can already be utilized to produce a 36.5-MW (49,000 horsepower) HTS ship propulsion motor capable of operating at 38 degrees Kelvin -eight degrees higher than the operating temperature of the 36.5-MW ship propulsion motor that AMSC is shipping to the U.S. Navy this year, which utilizes the company's 1G HTS wire.

The company stated, "Our objective is to increase the operating temperature of large-scale electrical equipment, such as motors and SuperVAR synchronous condensers, much further - to about 55 degrees Kelvin - which will increase these savings further."

That sounded good in 2006. But, consider this. SuperPower (a partner with Sumitomo) is producing wire that operates at 77 K.

http://www.superpower-inc.com/20070227.aspx

AMSC has had great success with Windtec. That is what is driving this stock. If AMSC' 2G is going to be a market leader has yet to be proven.

Just one person's opinion (who doesn't own the stock).

W.D.
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The company stated, "Our objective is to increase the operating temperature of large-scale electrical equipment, such as motors and SuperVAR synchronous condensers, much further - to about 55 degrees Kelvin - which will increase these savings further."

That sounded good in 2006. But, consider this. SuperPower (a partner with Sumitomo) is producing wire that operates at 77 K.

http://www.superpower-inc.com/20070227.aspx

AMSC has had great success with Windtec. That is what is driving this stock. If AMSC' 2G is going to be a market leader has yet to be proven.

Just one person's opinion (who doesn't own the stock).

W.D.


Thanks, W.D.

It seems SuperPower is, in addition to a Sumitomo partner, a wholly owned sub of "Philips Holding USA, the US holding company for Royal Philips Electronics N.V., following Philips' November 2006 acquisition of SuperPower's previous parent company, Intermagnetics General Corporation."

At 77 degrees K, the SuperPower cable appears capable of operating at nearly 50% higher temperature than AMSC's 55 degree Kelvin product. SuperPower, on the other hand, is not yet positioned to produce its cable on a mass scale. AMSC will have large scale production capacity for its cable on line before the end of the year and has established relationships with GE and Siemens.

It would be nice to hear Yurek address the issue of 77 K vs 55K during the upcoming conference call.
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