UNXL: Cowen Impressed with Tour of Lufkin Manufacturing Line

By Tiernan Ray

Cowen & Co.’s Robert Stone today reiterated an Outperform rating and a $46 price target, on shares of UniPixel (UNXL), the maker of touch sensors for touch-based computer displays, after taking a tour of the company’s manufacturing line in Lufkin, Texas, which reassured him manufacturing of UniPixel’s “mesh” technology is on track.

“We visited the TX operations (8/30/13) and believe progress
continues toward Q4 volume production,” writes Stone. ”

He’s impressed with the machinery the company has installed:

The new plate making tool is 4x higher resolution, capable of 2 micron line widths, which should increase flexibility in designing grid patterns and other sensor features (bezel circuits, ground pads). Another inspection machine checks the plate before it is mounted to the printer drum. UNXL has developed special tooling for aligning and loading the plates, which should make the process highly repeatable and much less dependent on the skill of the operator.

Stone notes progress both at Lufkin and at the Rochester, New York facility where partner Eastman Kodak (EKDKQ) will produce some UniPixel product:

Lufkin has been making long runs (in addition to prototypes and samples) to gauge the impact of various parameters. The goal is to determine the widest possible window, so all sensors can be plated with one recipe. Rochester should be production ready by mid-November (Kodak Capacity Build Appears on Track). Lufkin should begin sooner, once the roll-to-roll tester is in (due in October) and qualification is complete. A manual fixture (with the same head design) arrived the day of our visit, and will allow testing using the same protocol to begin gathering data. Once mounted, a 100% electrical test takes only seconds.

Stone thinks that with 20 “engagements” currently underway for the company’s technology, some new design wins may emerge, without saying what the time frame is: “UNXL may be swapped into some existing designs whenever volume is available, without impacting customer product launch windows; UNXL has qualified two downstream assembly partners and is in talks with four more.”

Stone includes in his report some pictures from the Lufkin facility:

UniPixel shares today closed down 26 cents, or 1.3%, at $19.15.