Enovix ticker ENVX
Having followed this board for several years, I am exceedingly grateful for Saul’s and everyone’s insights. Hopefully this post spurs interest in a company I believe has tremendous potential.
Enovix has designed a high-energy, high-capacity battery with a 100% silicon anode to power the technologies of the future.
The applications for their batteries are limitless: Wearables, IOT, Smartphones, Laptops, Tablets, Industrial and Medical, Electric Vehicles…
This is a “story stock” right now with the critical question hinging on whether one believes the company will be successful in ramping up production. They are not currently profitable.
A number of people on this board own Enphase and will be familiar with TJ Rodgers. TJ Rodgers was the founder of Cypress Semiconductors and served as CEO for 35 years. Five years ago, a struggling Enphase came perilously close to being kicked off the Nasdaq stock exchange. Investors TJ Rodgers and John Doerr intervened to install current leadership, who then executed one of the more stunning turnarounds in cleantech history.
TJ Rodgers is the Executive Chairman of Enovix and in my view is leading another incredible turnaround.
Below links do a better job than I can of explaining the technology and plan forward.
TJ Rodgers explains brake flow technology. T.J. Rodgers Explains Enovix BrakeFlow™ Technology - YouTube
TJ Rodgers cleaned house at the end of 2022 and brought in a new exec management team. They’re highly qualified and with years of relevant experience. The results have been promising. The candor that TJ Rodgers displays when he addresses the issues that plagued the company made me a believer. I highly recommend this video. Special Presentation by Enovix Executive Chairman T.J. Rodgers - YouTube
With the new team of CEO & President Dr. Raj Talluri and COO Ajay Marathe in place, they set benchmarks for the path forward and so far have achieved them.
Investor Presentation April 2023 https://ir.enovix.com/static-files/667425e2-44ef-4ab0-978b-991a2e6be186
From the April letter to shareholders:
First, we produced 12,500 full qual units, which beat our plan of 9,000 units, and was 2.8x over our 4,442 unit production last quarter. This progress was enabled by across the board improvements in yield and productivity in Fab 1.
Second, on March 9, we presented a rigorous Equipment Procurement Review Process Control Review to a special committee of manufacturing experts on our Board – and received permission to launch the fabrication of our 1,350 unit per hour Gen 2 Autoline design – six days ahead of our plan.
Third, we now have a Fab 2 building and over 25 employees in Penang, Malaysia, and are in the process of closing local funding for our first Gen 2 Autoline for Fab 2.
Fourth, although just after quarter end, we closed a $172.5 million convertible debenture to fund Gen 2 Autolines 2, 3 and 4 in our new Enovix Malaysia Fab 2 plant. The convertible debenture was well received and created minimal 7% dilution.
The Gen 2 Autoline will enable us to achieve an over 10x throughput improvement over the current Fremont Line 1, as detailed in a video featuring Gen 2 manufacturing steps narrated by our Chief Operating Officer, Ajay Marathe.
In March, we signed a non-binding Letter of Intent (LOI) with YBS
International Berhad (YBS) to locate our first Gen 2 Autoline in an existing
YBS building at the Penang Science Park in Malaysia. This second
manufacturing facility will allow us to scale production in proximity to
customer assembly, suppliers, and a deep pool of manufacturing talent.
Penang Island in Malaysia is the epicenter of assembly and test for the
semiconductor industry. In addition, the LOI calls for YBS to work with local
banks and government authorities to secure non-dilutive financing to fund
Gen 2 Line 1 and we are seeking at least $70 million.
At 200,000 square feet, the new Malaysian Fab 2 building has enough space
to accommodate four production lines that will be capable of manufacturing
between 38 million to 75 million batteries a year, depending on battery size
(one cell phone battery equals approximately two wearable batteries).
June 15th Enovix announced achievement of Quarterly Milestone Early, Producing 18,000 Cells with two weeks remaining in the quarter.
They recently announced a PO from the US Army https://ir.enovix.com/news-releases/news-release-details/enovix-receives-purchase-order-produce-battery-cells-us-army
78 customers are qualifying Enovix batteries for their products. Meta is believed to have an exclusive through 2024 with Enovix to produce their coming VR glasses.
There is significant short interest betting against this company. But insiders have been buying the stock.
Seeking Alpha article. Enovix Stock: Wins Army Contract, Game-Changing Milestone (NASDAQ:ENVX) | Seeking Alpha
Another Seeking Alpa article. Enovix: Big Disruptive Growth (Advanced Lithium-Ion Batteries) (NASDAQ:ENVX) | Seeking Alpha
Enovix will announce Q2 earnings on July 26th.
Thank you everyone. I look forward to your thoughts.