Thank you for reading Part I. It is now time for part 2, where I will go more in detail with the business as it looks today.

After getting the VC funding we started on doing a lot of parallel tasks such as expanding our management team and spreading it out in the US, EU and China. We started the development of the Asetek LCLC, which is different in basically all aspects from retail grade liquid cooling. The IP of this solution goes many years back, but we never really started the development until we got the VC funding.

In order to be able to support the big OEM's like HP, Dell etc. we also had to build a professional supply chain, step up all our internal processes and all these things are what we have been doing the last couple of years.

Going back to the product the main difference from retail grade liquid cooling is that is has to last 5-7 years without defectives such as liquid evaporation, noise, pump failure, performance degradation, leaks etc. On top of this the product has to sustain minus 40'C storage temperature (perhaps the customer has a warehouse in Alaska) and plus 60'C storage temperature (perhaps the customer has a warehouse in Dubai), withstand a huge amount of shock and vibration, like when the PC is thrown by DHL or UPS or when the PC is transported in the back of a truck on a bumpy road across Australia.

All these requirements are very difficult to live up to and Asetek has spent huge amounts of efforts on expanding our lab facilities, we have tested hundreds of products for thousands of hours and in order to be credible we have worked with world-leading life time laboratories to actually document that our products will work for the right amount of time. Many companies claim their solutions have 50,000 hours of life time, which is about as far from the truth as it gets. NO retail class liquid cooling system on the market today that I know gets even near this life time. Obviously a very few PC's will actually be used for 5-7 years, but that is a requirement of the OEM's and a qualifying criteria.

Recently a hardware enthusiast with questionable journalistic education, writing for an enthusiast web site wrote that he was a bit disappointed about the materials in the LCLC, and that the materials were cheap. This is unfortunately a typical statement from a member of the enthusiast press not knowing better. In order to avoid leaks in the huge temperature range that I described before and with very different coefficients of expansion on the various materials in the LCLC, all materials have been selected very carefully.

Of course we could have chosen pink garden hose, gold fish in the liquid, a propeller in a transparent plastic house and gold plated cold plate - and although this is considered to look cool in distant parts of the world, such hoses just have a huge liquid loss, and the liquid will simply evaporate through them in no time (no time in this context could be 1-2 years). That is OK in an DIY system, where you regularely flush your system and refill, but not in an OEM PC. The tubing in the LCLC is one of the most expensive parts in the system, and is made of a material in the "Teflon-family" so please do not assume it low quality just because it does not look like Las Vegas.

Another unique thing about the LCLC is that it is integrated in to a small entity and is just as easy to install as any air cooler, meaning that the OEM can easily adopt it on the manufacturing line. The LCLC is a platform and we offer it with a variety of configurations, different sizes of radiators etc.

From a performance point of view many are intrigued by large tubes and pumps, but the point is to have a balanced system in order to obtain the right performance. One of our customers would not buy our system, because he claimed that it would not perform on par with an enthusiast grade system. After testing it he had another opinion. It actually performed just as well as a ½" tubing enthusiast $250 retail kit... I am not claiming that the LCLC can beat all retail grade liquid cooling on the market on sheer cooling performance, because it cannot, but all things considered (cost, size, life time, reliability, weight and all the things that matter for an OEM) the LCLC beats anything that I have seen.

The current LCLC that ships in for example the HP Blackbird has great performance and is capable of overclocking the CPU just as much as for instance the Peltier turbo charged Delphi unit (Coolit supplies the TEC radiator to Delphi, and Delphi supplies to Dell), and on top we are able to cool the graphics as well. The Delphi unit is very well engineered (and I highly respect both the product and Delphi) but its size and cost will prevent it from ever going mainstream.

In the OEM space performance is measured in many ways - not just pure cooling performance. Cost, size, power consumption etc. The LCLC probably costs 25% of the Delphi unit, and uses 5% the power under full load! Yes - Delphi can claim the lowest CPU temperatures, and Asetek can claim higher system performance simply due to the fact that we can overclock both the graphics and the CPU. Finally and more important - with our price points we can enable other and more mainstream segments allowing us to reach real volumes.

The LCLC is only the first product in the line, we have many upcoming and even high(er) performance units and they will all be true to our design criteria of low cost, low power consumption, small form factor etc. You have only seen the beginning

So where is all of this going? As I mentioned in Part I we have not forgotten about the end users, and our first market where we are going to claim market leadership is in the OEM gaming PC space. Our first major win was HP, with their Blackbird, but this is only the beginning! Soon you will be able to buy gaming PC's pre installed with Asetek LCLC technology on a global scale from many different players. The great thing is that you can now buy a pre built PC with technology inside with a heritage from the VapoChill and WaterChill days :) This is what I mean when I say that the enthusiasts can still go and buy genuine Asetek engineered solutions. On top of that we are working with a number of retail players that will most likely take the LCLC and or the graphics coolers retail, as first example being NorthQ.

Getting back to the HP Blackbird, this is in my view the greatest gaming PC on the market right now. I have read many so called "press" reviews and end user comments that they could build something better for half the price. To those of you I can only say that you do not have a clue about the market this product is made for. Go back to your cave with your forklift to carry your LN2 cooler and have fun. I am not saying this because we supply the liquid cooling, but because I now know how the big OEM's engineer their products. I love overclocking, and I think it is a great and fun market place to be in, but do not mix it up with the OEM gaming market, because it is not.

I am an enthusiast myself, I have personally bought quite a few different gaming PC's (one of them obviously being a Blackbird) and I have built more than 50 high end PC's over the years. I personally overclocked a PII (Slot type) 333MHz to 620MHz with a VapoChill and won a price for the highest overclock of the time, so I feel qualified when stating that you get something for the extra money when buying a branded gaming machine. I noted that the new Dell XPS 630 even uses standard ATX motherboards now, meaning that upgrades will be a breeze.

I understand that if you are the type that love going to Fry's collect all items, buy a huge chassis and go home having fun doing the actual assembly, you are probably not the right girl for a pre built machine. However if you like to have a painless high performance PC with a cool design, and you have your fun using the machine rather than building it, I would recommend an OEM built PC any day. We ALL know that the motherboard, hard drive, memory, CPU etc. is all the same whether you buy from HP or you build it yourself. I also hear arguments like "I want to have something that looks unique" Well what unique is there about buying a Thermaltake chassis that all the other enthusiasts also buy at Fry's?

So if the hardware is all the same, what do you actually get for your money when you buy the HP Blackbird? First of all you get a liquid cooling system that you cannot buy at Fry's  (at least for the time being). You do not have to worry about re filling it with liquid or whether it will drip liquid on your 3x $400 graphics cards in SLI and it is silent - not only for the first 12 months. Secondly you get a chassis that you cannot buy elsewhere. Whether you like the design is a question of taste, personally I love it, but there are just so many great features that you will see when you work with the machine.

Also with PC’s from a big OEM you get something that is tested, tested and tested! It is tested in all possible conditions and configurations, meaning that you will not have to bother with incompatibility, instability caused by condensator xx overheating because your motherboard does not get enough airflow etc., you can bet that it will survive a bumpy ride in your car and you will get a supported product, where you do not have to carry parts back and forward if something becomes defective and you cannot figure out what it is. Will you get better performance than if you buy the parts yourself? Absolutely not, and that is not my point. Again if you like building it yourself and that is your hobby, continue with that and do not buy an OEM built PC.

The gaming market is only our first market. There are many other products/segments that could potentially benefit from liquid cooling and we already have many other customers and markets in the pipe line, where we will show ground breaking value propositions that only can be achieved with our liquid cooling. I will get back to that later, as there is no reason to inspire the competition at this point in time.

ASE