American Superconductor Achieves Key Manufacturing Development Benchmarks for its High Performance Second Generation Wire

American Superconductor Corporation, a leading electricity solutions company, today reported achieving significant manufacturing development benchmarks for its very high performance, second generation (2G) high temperature superconductor (HTS) wire. Presenting data at the U.S. Department of Energy Superconductivity Peer Review Meeting, the company also announced initiation of manufacturing scale-up plans based on these latest results.

AMSC achieved electrical performance levels of 330 Amps, 10 percent above the commercial threshold performance level of 300 Amps set by the U.S. Department of Energy (DOE) for 2G HTS wires. The wires - laminated with copper - have a "neutral axis" architecture, a particular wire architecture that produces the superior level of strength and durability needed in commercial applications. AMSC also presented high performance results on greater than 30-meter lengths -- triple the length of its previously reported results - of 2G HTS neutral axis wire with end-to-end electrical current in the range of 160-185 Amps for standard one-centimetre wide wires. The results are documented in a white paper available at http://www.amsuper.com/products/htsWire/documents/2GWhitePaper-July04_000.pdf

David Garman, Acting Under Secretary for Energy, Science and Environment at DOE, noted that "These results are a significant milestone on the pathway to creating more secure power networks and to increasing the electrical efficiency of large-scale electric equipment."

"The combination of both very high electrical performance and longer lengths of these wires is compelling," said Alex Malozemoff, executive vice president and chief technical officer at AMSC. "With this confirmation of our manufacturing development strategy, we are now well positioned to successfully execute the next phase of our 2G HTS wire manufacturing plans, which we expect will yield a significant volume of high performance, commercially viable 2G neutral axis wire next year."

David Paratore, AMSC's president and chief operating officer said the company now expects to scale-up its 2G HTS wire manufacturing process in two steps. "First we'll finalize conversion of our current 2G development facility into a pre-pilot production line by the spring of 2005 to produce and ship more than 10,000 meters of 2G wire during the fiscal year ending March 2006," he said. "Second, we plan to scale-up to full pilot production in order to achieve an annual production capacity of approximately 300,000 meters of high performance 2G HTS wire by the end of calendar 2007."

Already budgeted capital expenditures and related costs for the pre-pilot production line are expected to be less than $5 million and will be incurred largely in the fiscal year ending March 2005. As previously disclosed by the company, costs for the pilot production operation are anticipated to be $15-$20 million beginning in the fiscal year ending March 2006.

Paratore said AMSC has orders for more than 550,000 meters of its present commercial first generation (1G) HTS wire which it will manufacture and ship in its current fiscal year ending March 2005. "Typical commercial production lengths for individual 1G wires manufactured at AMSC are over 1,000 meters and have the highest electrical performance -- over 350 Amps per centimeter of width -- of HTS wire produced anywhere in the world," he said. "AMSC now expects it will achieve scale-up to production of 1,000-meter lengths of 2G HTS wire in the pilot production stage by the end of calendar 2007, which will signal the beginning of the market transition from first- to second-generation HTS wire."

AMSC has shipped discrete quantities of prototype 2G HTS wire to customers in the U.S., Japan and Germany over the last six months. The 2G wire to be produced in both the pre-pilot and pilot operations over the next one to three years is targeted for use in near-term commercial applications -- such as SuperVAR(TM) synchronous condensers, motors and generators -- and for use in prototype power cables, maglev trains and MRI medical systems.

Paratore described the patented 2G HTS wire manufacturing process used to achieve AMSC's new high performance results as modular. "Using this process, we can readily add modules to the original production line to increase overall capacity as customer demand continues to grow," he said. "We believe this will put us in an excellent position to meet future demand growth while controlling the rate of capital investments."

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