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  "documentTitle": "Monolithic Power Systems (MPWR)",
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  "authorName": "Ben Axler",
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  "presentationDate": "2019-10-09 00:00:00",
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  "notes": "Uses a testimonial from a former engineer to anchor the thesis of a diminishing moat.",
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      "text": "But no edge lasts forever, particularly in China were intellectual property and proprietary processes are harder to police.",
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      "text": "Engineers also speak of defect problems with MPWR chips that often go undiscussed by management: Warranties have generally risen: Prior to August 1, 2005: Provided a standard 90 day warranty; 2005-2013: One year; 2013-Today: One to two years.",
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      "text": "MPWR had a process innovation 15-20 years ago. Their designs use 15-16 masks. Typical power control chips used to use 30; MPWR's process was materially cheaper. Each mask takes 1 - 1.5 days at the foundry, so MPWR's process cut foundry time in half. Masks cost around $20 each, so cutting them in half reduces the processed wafer costs to about $450 from around $750.",
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      "text": "But no edge lasts forever, particularly in China were intellectual property and proprietary processes are harder to police: We believe the Chinese have copied that process, and the very simplicity of it is a barrier to moving up to digital chips. In competitive areas such as consumer electronics, we hear that the Chinese can undercut MPWR's 50%+ margins to as low as 10%.",
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      "text": "When MPWR came public, there is little disagreement it had a disruptive way of approaching power management solutions. The Company fought hard to protect its intellectual property, and succeeded. Based on our industry research of talking to engineers and people familiar with MPWR’s end markets, we believe it is becoming increasingly clear that the Company is slowly losing its technical edge.",
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      "text": "MPS had an innovation edge about fifteen years ago that made their process much cheaper and they built a business based on that, but right now it’s limiting them from getting into the higher end business and the low end business, has been kind of eaten up by the Chinese.",
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      "text": "MPS had an innovation edge about fifteen years ago that made their process much cheaper and they built a business based on that, but right now it’s limiting them from getting into the higher end business and the low end business, has been kind of eaten up by the Chinese. — PhD Electrical Engineering, Former MPWR Engineer",
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      "text": "1) California Court Upholds Jury Verdict in Favor of Monolithic Power Systems Against O2 Patent Claims; 2) Monolithic Power Systems Prevails in Contract Dispute With Linear Technology Corp.",
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