Atomera Integrated (ATOM) offered a complete replace on its progress and future outlook throughout its Second Quarter Fiscal 12 months 2024 earnings name. The semiconductor firm reported a GAAP internet lack of $4.4 million for the quarter, an enchancment from the $5.2 million loss in the identical quarter of the earlier 12 months. Revenues elevated to $72,000 in Q2 2024, up from zero in Q2 2023. The corporate showcased developments in its expertise and strategic collaborations, expressing optimism about changing buyer engagements into tangible income streams.
Key Takeaways
- Atomera is advancing in good energy merchandise with STMicroelectronics, aiming for high-volume manufacturing optimization.
- Collaboration with Soitec on skinny RF-SOI wafers is anticipated to facilitate the adoption of MST expertise.
- The corporate is actively pursuing alternatives in reminiscence expertise, superior node markets, and GaN expertise.
- Financials present a lowered GAAP internet loss and a slight enhance in income, with a money steadiness of $18.3 million as of June 30, 2024.
- Atomera submitted its first proposal beneath the CHIPS and Science Act and expects elevated curiosity in funding alternatives.
Firm Outlook
- Atomera anticipates its engagement with STMicroelectronics to kind the bottom of its income within the subsequent 12 months.
- The corporate expects Q3 2024 revenues to be roughly $20,000.
- Working bills for the complete 12 months are projected to be decrease than beforehand forecasted.
Bearish Highlights
- The corporate nonetheless operates at a internet loss, though it has decreased year-over-year.
- Income figures, whereas exhibiting progress, stay modest within the context of the semiconductor trade.
Bullish Highlights
- Technological enhancements have proven efficiency enhancements between 15% and 30%.
- Optimistic suggestions and curiosity from potential companions in GaN on silicon expertise.
- The DRAM trade’s speedy node launch cycle could result in faster adoption of Atomera’s expertise.
Misses
- Q2 income didn’t meet the excessive monetary thresholds of the semiconductor trade, regardless of enhancements.
Q&A Highlights
- CEO Scott Bibaud emphasised the absence of serious obstacles to commercialization for his or her PDK.
- The corporate is diversifying its method by participating with a number of corporations for the TSI alternative.
In abstract, Atomera is making strides in varied market segments, with strategic partnerships and technological developments setting the stage for potential progress. The corporate’s deal with enhancing system efficiency, streamlining provide chains, and pursuing new market alternatives, comparable to these supplied by the CHIPS and Science Act, are vital components of its technique. Regardless of the present monetary losses, Atomera’s management stays assured of their capacity to ship on their guarantees and obtain business success.
InvestingPro Insights
Atomera Integrated has been navigating a difficult panorama, as mirrored in its monetary metrics and market efficiency. With a market capitalization of $92.76 million, the corporate’s valuation displays investor sentiment and market circumstances. The income progress for Atomera has been meteoric, registering an 8014.29% enhance during the last twelve months as of Q1 2024, which is a testomony to the corporate’s capacity to scale its operations, albeit from a really low base.
One of the notable InvestingPro Ideas for Atomera is its spectacular gross revenue margin, which stood at 89.26% during the last twelve months as of Q1 2024. This means that whereas the corporate’s revenues are nonetheless modest, it is ready to keep a excessive share of income as gross revenue. One other key tip is the truth that Atomera holds additional cash than debt on its steadiness sheet, offering the corporate with a level of economic flexibility to navigate its progress technique.
Buyers ought to notice that the inventory has skilled important volatility, with value complete returns reducing throughout varied timeframes, together with a 12.18% drop during the last week and a 64.08% fall during the last 12 months. These actions replicate each the corporate’s operational challenges and broader market developments. Moreover, the present value is at 38.41% of its 52-week excessive, which might point out a possible low cost for buyers who consider within the firm’s long-term potential.
For these all in favour of a deeper dive into Atomera’s prospects, InvestingPro presents further ideas that may present additional insights into the corporate’s efficiency and potential. There are at present 16 further InvestingPro Ideas obtainable for Atomera, which will be accessed to tell funding selections.
For extra data, buyers can discover these insights intimately by visiting the InvestingPro platform at https://www.investing.com/professional/ATOM.
Full transcript – Atomera Inc (ATOM) Q2 2024:
Mike Bishop: Hey, everybody and welcome to Atomera’s Second Quarter Fiscal 12 months 2024 Replace Name. I’d prefer to remind everybody that this name and webinar are being recorded, and a replay might be obtainable on Atomera’s IR web site for one 12 months. I’m Mike Bishop with the Firm’s Investor Relations. As in prior quarters, we’re utilizing Zoom (NASDAQ:) and we are going to comply with the same presentation format with individuals in a listen-only mode. We are going to open with ready remarks from Scott Bibaud, Atomera’s President and CEO; and Frank Laurencio, Atomera’s CFO. Then, we are going to open the decision to questions. If you’re becoming a member of by phone, it’s possible you’ll comply with a slide presentation to accompany our remarks on the Occasions and Displays part of our Investor Relations web page on our web site. Earlier than we start, I’d prefer to remind everybody that in at present’s name, we are going to make forward-looking statements. These forward-looking statements whether or not in ready remarks or throughout the Q&A session, are topic to inherent dangers and uncertainties. These dangers and uncertainties are detailed within the Threat Components part of our filings with the Securities and Change Fee, particularly within the Firm’s annual report on Kind 10-Okay filed with the SEC on February 15, 2024. Besides as in any other case required by federal securities legal guidelines, Atomera disclaims any obligation to replace or make revisions to such forward-looking statements contained herein or elsewhere to replicate adjustments in expectations as regards to these occasions, circumstances and circumstances. Additionally, please notice that in this name, we might be discussing non-GAAP monetary measures as outlined by SEC Regulation G. Reconciliations of those non-GAAP monetary measures to probably the most straight comparable GAAP measures are included in at present’s press launch, which can also be posted to our web site. Now, I want to flip the decision over to our President and CEO, Scott Bibaud. Go forward, Scott.
Scott Bibaud: Good afternoon and welcome to Atomera’s second quarter 2024 replace name. Previous couple of months have been very busy time at Atomera with in depth buyer exercise robust product improvement outcomes, recruiting of recent workforce members and our first chip set funding submission. Right this moment, I’ll go just a little outdoors of our ordinary format to provide a complete image of the Firm. Given the present inventory value, we sense there is perhaps a sense amongst buyers that our expertise, revolutionary improvement and buyer exercise are someway stalled. Nothing may very well be farther from the reality. To that finish, I would like to have a look just a little deeper into every of the market segments the place our main prospects are making important progress in the direction of JDAs and or license agreements. First, MST for energy chip expertise, Atomera continues to work very carefully with STMicroelectronics on their subsequent era good energy merchandise, and is making stable progress on a manufacturing launch, which can end in compelling royalty income for Atomera. Throughout this previous quarter, we have had wonderful cooperation, together with in-person workforce conferences with the purpose of optimizing system efficiency and growing a high-volume manufacturing course of. The timing of this developmental effort is ST’s proprietary data, however I can let you know that our groups have a really tight working relationship. We’re assembly on a weekly foundation and sharing a mutual purpose of attending to manufacturing as quick as attainable. This stays our highest precedence. As we’re working with St. Sensible Energy Division, which belongs to their APMS Group, which had $1.9 billion in income for the second quarter of this 12 months. So, the potential of this enterprise could be very engaging. The facility chip section of the semiconductor market total was roughly $33 billion in 2023, so the chance represented by all our potential energy prospects is kind of important. Final quarter, I spoke concerning the giant variety of proposals Atomera has excellent, and that quantity has continued to develop. I’ll spotlight simply a type of giant and diversified prospects who accelerated their work with us because of the ST announcement and monitoring in the direction of integration into the subsequent era gadgets. After reviewing the small print of our expertise, this buyer determined to license our MST CAD software program and spent a number of months modeling how MST might enhance their transistor efficiency. Simulations of their precise gadgets confirmed even higher efficiency features than we had claimed, which has led to a proposal for them for working wafers and licensing MST from us, which we hoped to do within the coming quarters. Subsequent, the SOI market, which is a big and rising section with gross sales of $1.4 billion in 2022 and a 15% progress price going ahead. RF-SOI makes the vast majority of SOI income at present, due to robust adoption in 5G mobile entrance ends, the place rising bandwidth necessities make continued innovation to satisfy market wants significantly difficult. Our announcement this month of a brand new MST substrate based mostly on Soitec’s main RF-SOI expertise offered a significant step ahead, fixing a standard downside amongst our RF designers, which is detailed in my weblog and Hideki’s presentation at SEMICON. Placing MST on Soitec skinny RF-SOI wafers provides the trade an answer that’s simple to undertake and take a look at as they develop NextGen merchandise. Our prospects particularly requested us to deal with this concern and streamline the provision chain, which is what this announcement was about. This greater high quality substrate will assist pace their improvement, which is necessary to each them and to us. Atomera continues to work with the vast majority of RF-SOI wafer customers, so we’re very properly positioned on this market. Reminiscence expertise, DRAM stays a really giant market section, roughly $112 billion in 2023 or better than 20% of the general semiconductor trade. Atomera is working at varied levels of adoption with greater than one of many main reminiscence producers. Due to the considerably commoditized nature of DRAM, these prospects are laser centered on value, which traditionally has made them late adopters of recent supplies that might have an effect on yield or elevated value, together with bio royalties. As soon as adopted although, new materials applied sciences have lengthy legs and wafer volumes are the very best within the trade. We’re excited concerning the potential for our expertise on this area as a result of we consider it offers actual die measurement and margin enchancment potential for our prospects, even after paying us a royalty. The gate-all-around superior node market is without doubt one of the largest by income and the smallest by system rely, roughly $150 billion in 2023, greater than 28% of the general semiconductor trade. Atomera is working with the key gate-all-around producers on options for the main nodes down to a few nanometers, however we’re additionally exploring improvement on the nodes main from two nanometers down into the angstrom vary. The income potential for Atomera is perhaps the very best on this market section as a result of the price of main logic chips is greater than different semiconductor merchandise. Our MST expertise might add important worth to those gadgets which are on the coronary heart of the AI revolution, driving greater efficiency, decrease energy consumption, and higher yield. On our web site, we’ve got white papers describing precisely how MST offers these advantages. That stated, we’re unsure once we may have the ability to announce one thing particular within the gate-all-around sector. As a result of the event applications are so giant and the timeframes are so variable, however the curiosity and work is actual and the upside for us is important. In every of those segments, we’re hopeful we, we can have JDAs or license agreements to announce within the coming quarters. Now, a fast replace on our improvement and gallium nitride expertise. Final quarter, we highlighted MSTs capacity to behave as a calming layer, relieving structural challenges posed by compound semiconductors. Early outcomes give us nice hope that MST may also help clear up the substrate high quality and warp issues endemic to GaN wafers, which has impeded extra scaling previously. It’d initially seem that GaN is a departure from our core enterprise, however it isn’t. MST GaN can be utilized within the manufacturing course of in the identical method as the opposite functions we have already coated to enhance the yield of a myriad of GaN associated semiconductor merchandise. The facility GaN market alone grew by 41% in 2023 and can seemingly enhance at a CAGR of 46% over the subsequent 5 years, probably exceeding $2 billion per 12 months by 2028. Curiosity by potential prospects and companions has been surprisingly robust. Certainly, we’re already in discussions with 4 potential prospects and companions as a result of GaN is a cloth beneath investigation at most semiconductor corporations lately. We see it as including one other dimension to our current relationships, providing a easy path to adoption. However it’s early days and our R&D workforce remains to be working to show this right into a full product launch. We consider with this excessive stage of buyer curiosity, early revenues from MST GaN is perhaps attainable within the close to time period even presumably later this 12 months. I am going to undergo different buyer actions briefly. We proceed working with JDA1 to maneuver right into a extra definitive manufacturing program, however haven’t but achieved this end result. JDA2, nonetheless, is in lively negotiations with us on a license. Now that we’ve got outcomes from wafer runs accomplished within the final quarter, we hope to make this a complete firm settlement protecting a number of applied sciences. Likewise, we proceed to work with our different licensees to incorporate MST within the subsequent era course of nodes by MST CAD and wafer runs. Within the final quarter, we have additionally began participating on some new alternatives, together with inside current prospects. Progress in changing these engagements to licenses on the trail to manufacturing has not met our expectations. We all know that, our capacity to develop expertise and to construct buyer curiosity has been wonderful, however we have to do higher at closing offers. Just lately, we have taken a tough take a look at our gross sales and advertising efforts to attempt to discover methods to enhance. Because of this course of, we determined to make adjustments to start out with bringing on a brand new head of enterprise improvement and advertising, Shawn Thomas. Shawn has the right background to assist us take Atomera to the subsequent stage. Not solely does he have a deep background in system expertise supplies and epi, his detailed understanding of the challenges the trade faces and the relationships he brings will assist Atomera extra efficiently convert our compelling expertise into income producing enterprise. Earlier than wrapping up, I would like to focus on certainly one of our new applied sciences referred to as MST-SPX, concentrating on 5-to-48-volt transistors. On Friday, we launched a white paper detailing what we have completed, however enable me to provide a quick abstract. We’ve got discovered that combining MST with the superior buildings utilized in excessive energy transistors permits us to attain higher efficiency than has been revealed by every other semiconductor maker as seen within the chart on Slide 5, the place decrease is best. That is fairly wonderful stuff. We have additionally calculated that it makes monetary sense for a buyer to implement MST at lower than a 3% enchancment in RSP, however what we’re seeing and what we’re exhibiting on this chart present enhancements between 15% and 30% confirming that our expertise presents best-in-class efficiency and compelling economics for subsequent era energy chips. That is simply one of many newest accomplishments from a workforce that continues to crank out spectacular developments throughout many various expertise segments. At SEMICON West, earlier this month, Dave Thompson, Intel (NASDAQ:)’s VP of Course of Know-how and Analysis gave a chat on the options the trade will want sooner or later for evolving transistor architectures. Just about, all of the examples he introduced up, together with supply drain resistance, channel mobility, dopant management, gate dielectric points, and even gallium nitride the place issues Atomera is engaged on. His message was clear, the trade sees growing technical challenges shifting past 3 nanometers and discovering options would require a powerful cooperative effort by ecosystem companions throughout the trade. That is the kind of assertion that completely validates the route we have been taking it Atomera and exhibits the significance and potential of the work we’re doing at present. For that reason, we’re very optimistic concerning the prospects of our firm. Our ST engagement is progressing properly and may kind the bottom of our income beginning subsequent 12 months, and every of the opposite segments I’ve outlined can develop on high of that base. This previous quarter, we additionally submitted our first of hopefully many proposals beneath the CHIPS and Science Act. Atomera’s potential is being acknowledged throughout the trade, and it is solely a matter of time earlier than a number of of those potential alternatives flip into extra enterprise prospects for Atomera. We’re working very onerous to make that occur. Now, Frank will evaluation our financials.
Frank Laurencio: Thanks, Scott. On the shut of the market at present, we issued a press launch saying our outcomes for the second quarter of 2024. This slide exhibits our abstract financials. Our GAAP internet loss for the three months ended June 30, 2024 was $4.4 million or $0.16 per share in comparison with a internet lack of $5.2 million or $0.21 per share within the second quarter of 2023. In Q1 of 2024, our GAAP internet loss was $4.8 million, which was $0.19 per share. Revenues had been $72,000 in Q2 of 2024 in comparison with $18,000 in Q1 and nil in Q2 of 2023. GAAP working bills had been $4.6 million in Q2 of 2024, which was a lower of roughly $730,000 from $5.4 million of OpEx in Q2 2023, primarily because of a $603,000 decline in R&D bills, primarily reflecting the closure of our outsourced foundry TSI semiconductor within the first quarter of this 12 months. Gross sales and advertising expense decreased by $186,000 reflecting decrease headcount, whereas G&A was comparatively unchanged. Sequentially, our GAAP working bills decreased from Q1 2024 as a result of similar components that drove the decline as in comparison with Q2 of final 12 months. Non-GAAP internet loss in Q2 2024 was $3.6 million and compares to a lack of $4.3 million in Q2 2023, and as with our GAAP outcomes, the smaller loss was primarily because of decrease R&D and gross sales and advertising bills. Sequentially, non-GAAP internet loss declined by $363,000 from Q1 2024 because of our decrease working bills, in addition to a $52,000 enhance in income. The variations between GAAP and non-GAAP working expense in all durations introduced are primarily because of non-cash inventory compensation bills, which had been roughly $1 million for every of the durations introduced right here. Our steadiness of money, money equivalents and short-term investments on June 30, 2024 was $18.3 million in comparison with 19.3 million on the finish of Q1 2024. Throughout the latest quarter, we used $3.2 million of money in working actions in comparison with $4.1 million within the first quarter of this 12 months. Throughout Q2, we bought roughly 669,000 shares beneath our ATM facility at a median value per share of $3.82, leading to internet proceeds of roughly $2.4 million. As of June thirtieth, we had 27.6 million shares excellent. Income in Q2 was $72,000 and consisted of $50,000 of engineering providers income from cargo of wafers to a buyer in Part 3, and the steadiness from recognizing three months of MST CAD license income. For Q3, we anticipate our complete income might be roughly $20,000 consisting of MST CAD license income. As we have acknowledged beforehand, the subsequent main income milestone beneath our settlement with ST would be the grant of the distribution license upon completion of their qualification course of, which is basically depending on ST’s improvement schedule by which we’ve got restricted capacity to regulate. Accordingly, I can’t present steering on the timing for recognizing this license income from ST. Transferring to our expense steering. Our working bills thus far this 12 months got here in considerably decrease than we had budgeted because of decrease R&D spending on accountable lack of TSI and decrease gross sales and advertising headcount. So, for the complete 12 months, we now anticipate our OpEx to come back in decrease than my earlier steering. We anticipate that 2024 non-GAAP working expense might be in a variety of $16.25 million to $16.75 million. Along with our current enterprise improvement rent, we anticipate so as to add at the least yet one more headcount this 12 months in gross sales and advertising to assist speed up closing offers. We’re additionally planning so as to add engineering headcount to make sure protection of all our expertise areas and to help changing prospects to manufacturing. With that, I am going to flip the decision again over to Scott for a couple of abstract remarks earlier than we open the decision as much as questions. Scott?
Scott Bibaud: Thanks, Frank. Atomera continues to make robust progress, and we’re assured that we’ll convert extra of our many buyer engagements into license and manufacturing alternatives within the close to future. As I stated earlier, ST ought to kind a income base for our enterprise, whereas the opposite thrilling segments mentioned at present will assist us to construct a diversified, sustained enterprise round that first deal. Thanks, as all the time on your help. Mike, we’ll now take questions.
A – Mike Bishop: [Operator Instructions] Our first query comes from Richard Shannon of Craig Hallam. Richard, in the event you would unmute and go forward and it’s possible you’ll start.
RichardShannon: Let’s examine right here. Perhaps simply to comply with on an necessary matter for the final 12 months with announcement of ST right here. Your language did not actually say something about expectations for relative to your preliminary commentary about how lengthy this may take. Is it truthful to say that that timeframe remains to be in play right here or no adjustments so far as your or how would you characterize that given that you simply’re restricted in what you within the verbiage you’ll be able to inform us, Scott?
ScottBibaud: Sure, I believe that, it is a difficult query to reply, Richard. So, as I stated in my ready remarks, ST owns the schedule for this. They particularly requested us to not speak concerning the schedule. So, to the extent I say something about my authentic estimate, which was an estimate about what I believed a typical firm would do, then I form of I used to be saying they’re working behind on high or after that. So, what I can say is that each one of us are working to push this factor into manufacturing as quick as attainable, each them and us, and we’re working very carefully collectively, and I believe progress goes very, very properly.
Mike Bishop: We’ll must have to simply accept that and hopefully look ahead to some extra last information in some unspecified time in the future within the close to future. Thanks for that Scott.
RichardShannon: Second remark you made right here within the ready remarks could be very fascinating associated to JDA2, we’re centering lively negotiations after some good testing outcomes. Any extra element that you would be able to provide there? And perhaps give us perspective of different negotiations you’ve got been previously. I do know that that they are by no means quick, however any characterization you’ll be able to recommend of what is perhaps regular for a size of time earlier than attending to a passable end result?
ScottBibaud: To start with, I believe on the final name, we talked about that we had gotten some early peak at some knowledge from JDA2 that appeared promising. We ended up attending to see the remainder of that knowledge and it did truly are available in and appeared excellent. And so, this curiosity on each side to attempt to transfer this ahead right into a license or in an settlement, and our purpose is to actually make {that a} license that permits them to make use of our expertise throughout any of the applied sciences that they’ve of their firm. As to the timing of negotiating a contract, it’s extremely onerous to say. I imply, the difficult factor is whenever you’re working with very, very giant corporations, they have an inclination to have a little bit of a bureaucratic strategy of licensing applied sciences in with determination makers in lots of completely different locations that must be touched. Prior to now, we’ve got negotiated some licenses which have gone fairly shortly and solely a matter of some months, after which we have had others which have taken for much longer. I would not say that they take a very long time as a result of there’s like tremendous onerous negotiations and we’re at loggerheads and might’t attain settlement. It is extra often the case the place we submit a proposal, they must get settlement from a bunch of various teams to barter the subsequent step on that. It takes time to prepare that. And so, typically our turnaround on any proposal they make to us is in a day or two, and their turnaround will be for much longer, so onerous to foretell.
RichardShannon: Most likely not surprising, however look ahead updates right here on that one quickly. So good to see some progress there. Let’s hear, your subsequent query is on RF-SOI, you made an fascinating press launch a couple of weeks in the past about some breakthrough on some very skinny wafers. I assume we have been listening to from you on the very robust testing outcomes for years on this space. And based mostly on the final name plus this press launch, you talked about right here, it looks as if it is a fairly main breakthrough when it comes to perhaps attending to getting nearer and — getting nearer to a license for which I do know you’ve got working with the vast majority of the wafer begins within the trade right here. Is that this a good technique to characterize what you suppose is happening? Is it too early to inform or simply any characterization of the potential right here, particularly from a timing perspective in that area that is been seemingly lively for therefore lengthy?
ScottBibaud: I might say, the evolution of the options that we have had in RF-SOI have come some methods through the years. Within the final greater than a 12 months, we have identified about utilizing a lot thinner wafers to start out placing our MST down on, and we’ve got been thinning these wafers ourselves or our prospects have been thinning these wafers in order that we are able to put the MST down. But it surely’s a problem to skinny RF-SOI wafers as a result of there’re causes some high quality points on edges of the wafers. And so, this announcement that we’re working with Soitec to make these very skinny wafers is a vital one. It takes the event substrates that we’re working with form of out of the R&D lab and into one thing that may very well be a manufacturing high quality system. Will that assist make folks transfer quicker? I believe it completely will. You are asking about whether or not it will assist them transfer to licenses. I can let you know that our prospects who’re saying, hey, that is one thing we’re frightened about, we would like them know whether or not there will be a manufacturing high quality substrate for us to work for. And this type of offers the reply. And so, it lowers the obstacles for folks adopting MST for this actual answer.
RichardShannon: Truthful sufficient. Good to listen to. Perhaps a pair extra questions from me. I am unsure if I heard or received the language proper right here whenever you had been discussing in your ready remarks about gate-all-around and DRAM. I do know that you’ve got heard particularly the gate-all-around is one thing that is going to take a while, which I do not suppose is an enormous shock to anyone. Is the timeframe for DRAM one thing comparable when it comes to size of time or is that one thing that you would see being shorter and extra predictable?
ScottBibaud: Sure, not simple to foretell proper now, however with DRAM, they have an inclination to come back out with new nodes each, I believe each 18 months. Very fast, I imply, they’ve — they continuously have a node ramping up a node in quantity manufacturing and a node ramping down, as a result of as I stated in my remarks, DRAM is so value centered {that a} small value benefit is sensible to carry into manufacturing. So, I do consider that with the DRAM guys, you’ve an opportunity to get designed in and get into manufacturing quicker than among the different ones, as a result of they’re continuously turning their course of notes.
RichardShannon: That is sensible. Very fascinating. Perhaps I am going to comply with up on that one just a little bit later. An fascinating matter there. Two questions for me. One for every of you, Scott, the final one for you is said to GaN right here, I believe your remark was that varied approaches to enabling that enterprise, however at the least certainly one of them might generate some revenues earlier than the top of the 12 months. Perhaps you would elaborate on precisely what you imply there and the way that will occur.
ScottBibaud: Sure, completely. And I believe it is necessary to grasp, this isn’t even a launched product from us but. We solely received our first outcomes earlier this 12 months, however we have gone out and proven our take a look at outcomes to quite a few potential companions and there is lots of curiosity. So, I believe there is a respectable likelihood that we can make wafers for improvement functions for our prospects and perhaps promote them a few of these wafers earlier than the top of this 12 months. So, it is not going to be income that is like important sport altering income for us, however it will be a sign that individuals are very all in favour of probably adopting what we’ve got.
RichardShannon: Are these GaN on silicon or GaN silicon carbide or GaN on GaN?
ScottBibaud: It is GaN on silicon, and what we’re doing is we’re placing MST on the silicon and earlier than they develop the GaN, and after they develop the GaN and naturally, there is a bunch of intermediate layers that they develop earlier than then that the standard of the GaN that finally ends up on the highest is way greater than what they might get with out the MST.
RichardShannon: Final query from me, and I am going to soar out of line for Frank right here. Simply shortly on the OpEx a decrease quantity right here for the 12 months, and I believe your causes make sense right here. I assume my query is with the current rent you introduced plus a pair extra that you’ve got talked about right here at present. So would you anticipate to see a run charges or a complete quantity for subsequent 12 months perhaps near that vary you had earlier than, or how would you characterize these new adverts coming in later this 12 months?
FrankLaurencio: I believe that we’ll see form of going into subsequent 12 months a run price much like form of the information that we gave initially of the 12 months. So, we had a high finish of that information at round $17.25 million, once we went into the 12 months. And so, we do not give a selected information past type of the present 12 months, however you are proper to consider it as form of normalizing it with the — I believe the massive variable there nonetheless stays the foundry alternative. As a result of absent doing that, the R&D line would nonetheless stay under form of the place it was initially of the 12 months. And previously, our outsourced foundry spend was round between $1 million and $1.5 million a 12 months. I am not saying that we will bounce again to that stage, however a few of that may come again in when we’ve got a TSI alternative.
Mike Bishop: A number of questions coming in on the Q&A line right here. And the primary one is concerning the CHIPS Act and the query that CHIPS Act clearly was introduced some time again, and the query is, why are the proposals for the CHIPS Act solely now being pursued?
FrankLaurencio: I am going to take that one. I used to be very concerned within the submission that we did simply final week truly. So, the CHIPS Act cash form of got here in waves, first was centered on giant scale manufacturing services to carry type of a provide chain and the manufacturing of chips again on shore. The second was form of a recognition that even in the event you did that, you continue to had an enormous reliance on abroad package deal for chip packaging. So packaging was form of wave two. And now, we’re seeing a transfer in the direction of improvement of recent supplies applied sciences, particularly the decision for proposals that went out, which was nonetheless simply an early form of name for matters the place ones that expressed an curiosity in a bunch of compound semiconductor areas related to the DoD. And as such, these are issues that will be very related to our work on compound semiconductors and particularly started on silicon that Scott was simply speaking about. So, I believe it was the primary time that we discovered a really related match. That being stated, we anticipate to see extra funding proposals and we’ll be responding to these. And these are issues that you simply do in partnership with others. So going by the method, what we have noticed is as our title will get in and will get identified amongst a few of these businesses by responding to a related proposal, we must always see extra even outbound curiosity in the direction of us. And that is actually one thing we’re hoping for.
Mike Bishop: One other query is concerning the pursuit of offers and the questions. Why now to push for — to shut offers, should not there have been urgency all alongside?
ScottBibaud: Sure. I imply, I believe we have all the time had urgency to shut offers. I do say, I do suppose we maybe thought that we had been doing all the proper issues, and typically it’s important to sit again and say, all proper, we’re not doing the proper issues and what’s going flawed? And in addition, in some unspecified time in the future, regardless if you realize precisely what is going on flawed, it’s important to make some adjustments. And I believe, typically after you make these adjustments, it turns into clear to you what would’ve been flawed previously. And I believe to a sure extent, we’re in that spot. I might say proper now we’ve got extra proposals out than we have ever had in that previous. And so, now being able to speed up closing of them can have even a much bigger bang for buck than it did earlier than. However sure, I am very excited concerning the capabilities that Sean is bringing the workforce. Simply previously week and a half that we have had him on board, it’s extremely clear that he can go and speak to folks that and assist in ways in which our prior workforce could not. And so, I am actually optimistic that is going to make an enormous distinction.
Mike Bishop: One other query right here is about ST and the query is why. What are the obstacles to ST going to manufacturing? And did they’ve the design package, the PDK formalized and what’s concerned in qualification?
ScottBibaud: Sure, I believe within the investor deck, I present the method of going to manufacturing to excessive stage for many semiconductor gamers. And I do not suppose ST is considerably completely different. As you are growing your PDK, you are making an attempt quite a few issues, often in simulation software program, in our case, in MST CAD, and then you definately’re taking these simulations and also you’re designing chips that you would be able to placed on wafers after which run them by manufacturing, after which take a look at to see in the event you get good outcomes. And often as you make a PDK, you undergo a number of cycles of studying of that, the place you run some and also you get good outcomes, you make extra tweaks to get higher outcomes, and also you make extra tweaks to make higher outcomes. After which lastly, you are on the level the place you lock down a PDK, after which after you have the PDK, then the businesses will sometimes go right into a course of qualification the place now they’re actually simply working wafers to solidify the manufacturing course of. I imply, remind me of the query, Mike. Was the query is ST…
Mike Bishop: The obstacles to principally in the direction of commercialization, if…
ScottBibaud: Sure, I do not suppose there’s any obstacles in right here. The one factor is it takes effort and time to do that. After all, if the Firm had set a purpose of reaching a sure stage of enchancment earlier than they’d go to manufacturing, that will be a barrier. I believe that is one of many large issues that MST is doing. It is bringing the flexibility to our prospects to actually exceed the extent of enchancment that that they had thought they may obtain. And so, we’re very assured that that may enable them to maneuver ahead. I would not essentially name it a barrier, however I assume you would consider it that means.
Mike Bishop: Concerning, RF-SOI do current developments with Soitec enhance the likelihood of attending to market, whereas perhaps pushing again the timeline?
ScottBibaud: I do not suppose they make — I believe they might enhance the probability that a few of our prospects would go to market, as I used to be speaking to Richard about earlier than. Our prospects can be more than happy to see a top quality firm like Soitec providing a thinned, SOI wafer like this in manufacturing that they may deposit MST on high of. And so, that is eliminated one of many issues they’ve, and due to this fact, I believe it’ll pace time to market, however I do not suppose it pushes any of the time to market out.
Mike Bishop: And do you’ve an replace on the foundry license that you’ve got beforehand mentioned?
ScottBibaud: I believe I stated in my ready remarks that for the Foundry, we’re persevering with to work with them on shifting our expertise into to make it adopted by the subsequent era course of node launch.
Mike Bishop: And is there an replace on the TSI alternative?
ScottBibaud: Sure, so for the TSI alternative, we’re a number of completely different corporations to do this work, whereas with TSI, we’re actually focused on the method node that they had. What we’re discovering as we exit to the market is that there is quite a few completely different distributors that may present us with some providers and every of them has a special suite of course of nodes which are engaging to us. So, it seems like we’ll most likely be engaged with multiples of that we’re already working with a couple of. And we are going to most likely find yourself working with a basket of corporations as an alternative of 1 essential firm like TSI for our R&D companion.
Mike Bishop: And that wraps up the questions, Scott, so if you wish to make your closing feedback.
Scott Bibaud: Certain. Thanks all people for becoming a member of us to listen to the progress being made inside Atomera. Please proceed to search for our information, articles and weblog posts, which can be found together with investor alerts on our web site, atomera.com. Ought to you’ve further questions, please contact Mike Bishop, we’ll be joyful to comply with up. Thanks once more on your help and we look ahead to our subsequent replace name.
Operator: Thanks. This concludes the Atomera second quarter 2024 convention name.
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