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Alcoa ColorKast Debuts with Samsung

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Aluminum heavyweight Alcoa Inc. (AA - Analyst Report) has achieved a key milestone as its aluminum die casting technology, dubbed ColorKast, has been used by Samsung in its new digital camera, marking the first major push of this innovative technology in the consumer electronics space.  

ColorKast allows Alcoa to make color anodizable aluminum die cast components with high-end cosmetics. This breakthrough technology was featured on Samsung’s new digital camera, NX210, which has a built-in Wi-Fi connectivity. ColorKast’s performance and aesthetic requirements were validated with Alcoa’s South Korean marketing ally Global Kwangsung before its entry to the market. Alcoa said that other consumer electronic makers are keen on using this novel technology in their products.

ColorKast enables consumer electronics manufacturers to develop high-end, lightweight and cost-effective components for portable electronic devices leveraging Alcoa’s proprietary alloy, process and finishing technologies, developed at the company’s technical center in New Kensington, Pennsylvania.

Products made from ColorKast not only have the rich, metallic look and feel of anodized aluminum but are also eco-friendly given the infinite recyclability of aluminum. This results in a better green solution vis-à-vis plastics and/or composites. Recycled aluminum produces 95% less greenhouse gas emissions compared to new aluminum.

Alcoa saw roughly 18% growth in the consumer electronics end market in the last reported quarter. It remains actively focused on boosting its foothold in this fast-growing market. The company sees healthy growth in aluminum content in electronic devices, especially in products like notebooks and LCD TVs, over the next few years.

Use of aluminum in consumer electronics has been growing rapidly as the industry increasingly looks for the metal for its light weight, recyclability, aesthetic quality and the ability to be a heat sink. Given these qualities, the use of the metal is increasing in hand-held and other portable electronic devices.

Alcoa expects the global demand for aluminum to grow 7% in 2012 as it remains confident that the increased consumption patterns in North America, Brazil, India and Russia will contribute to the increased demand. The company projects an 8% growth in Asia (excluding China) this year.

We currently have a long-term Neutral recommendation on Alcoa. The company, which competes with Aluminum Corporation of China Limited and RioTinto plc. (RIO - Analyst Report) among others, holds a short-term Zacks #3 Rank (Hold).

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