Atomera, Inc. (ATOM) This autumn 2023 Earnings Name Transcript

Atomera, Inc. (NASDAQ:ATOM) This autumn 2023 Earnings Convention Name February 13, 2024 5:00 PM ET

Firm Individuals

Mike Bishop – Investor Relations

Scott Bibaud – President, Chief Government Officer & Director

Francis Laurencio – Chief Monetary Officer, Chief Accounting Officer & Company Secretary

Convention Name Individuals

Richard Shannon – Craig-Hallum

Cody Acree – The Benchmark Firm

Mike Bishop

Hiya, everybody and welcome to Atomera’s Fourth Quarter and Fiscal Yr 2023 Replace Name. I would wish to remind everybody that this name and webinar are being recorded and a replay will likely be obtainable on Atomera’s web site for 1 yr. I am Mike Bishop with the corporate’s Investor Relations. As in prior quarters, we’re utilizing Zoom and we are going to comply with an identical presentation format with individuals in a listen-only mode. We’ll 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, chances are 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 wish to remind everybody that in at the moment’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, the corporate’s annual report on Kind 10-Okay filed with the SEC on February 15, 2023 and its quarterly report on Kind 10-Q filed with the SEC on November 1, 2023. 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 mirror modifications in expectations with regard to these occasions, situations and circumstances. Additionally, please observe that in this name, we are going to be discussing non-GAAP monetary measures as outlined by SEC Regulation G. Reconciliations of those non-GAAP monetary measures to essentially the most straight comparable GAAP measures are included in at the moment’s press launch which can be posted on our web site.

And with that, I would like to show the decision over to our President and CEO, Scott Bibaud. Go forward, Scott.

Scott Bibaud

Good afternoon and welcome to Atomera’s fourth quarter and full yr 2023 replace name. I consider that once we look again at 2023, we are going to think about it the catalyst yr, the place our first main enterprise deal that drove our success was introduced and our fourth quarter will likely be the place the execution of that mission turned most evident. As well as, we have seen glorious outcomes from clients and companions and robust advances in R&D that may finally lead to extra business licenses. We’ll dive into the main points however first, let me provide you with a view of the business standing and flex Atomera.

As you realize, 2023 was not the strongest yr within the semiconductor business, characterised by unfavorable progress cutbacks in CapEx plans and a few slowdown in spending. As is often the case in any such atmosphere, we noticed elevated curiosity in new design exercise and loads of fab capability to run R&D tons. As we enter 2024, we’re seeing far more optimism as progress prospects pushed by new synthetic intelligence capabilities begin to emerge. We’re pleased to see this since our clients’ money movement will enhance however we nonetheless count on to see modest fab utilization charges which advantages our enterprise growth prospects. That is actually the perfect time for purchasers to undertake MST.

Clearly, the large information of the quarter was the set up of our expertise at STMicro’s fab in Agrate, Italy. In case you’re new to the Atomera title, in April of final yr, we introduced a business license settlement with STMicroelectronics that was essential for our firm in a number of methods. First, it validates our enterprise mannequin and the worth that MST brings to clients after they really respect its capabilities. Second, it’s actually an essential sign to business individuals when a big revered IDM decides to take MSC to manufacturing. Though their selections are totally on technical standards, engineering administration all the time feels extra comfy if different main firms are taking place the identical path that they’re contemplating.

We have now all the time represented our clients out to manufacturing with MST in 6 phases, as proven right here. For ST, Part 4 contains each set up and productization. This slide reveals a tough approximation of the place we’re in that course of with the nice out containers representing objects which have been accomplished. Final yr, we had been ready for some gear modifications to occur at ST earlier than we may begin the set up. We felt fairly sure the set up would occur a brief interval after our final quarterly replace name and it did. Let’s take a look at the remaining steps in additional element.

Our progress since our final replace name has been really outstanding. Since final Could, the ST Engineering workforce has been growing a brand new manufacturing course of utilizing TCAD which additionally contains our personal simulation instrument referred to as MST CAD. In early November, after their EPI instrument upgrades had been full, we offered ST with a crucial IP crucial to begin making MST wafers which triggered the income milestone we introduced on November 14. Though we have all the time guided that set up can take as much as 3 months, the ST EPI workforce was capable of get educated on our expertise to the purpose that they might develop high-quality MST on their wafers which allowed us to cross all their acceptance standards earlier than Christmas. This accomplishment accomplished the formal set up of MST expertise at ST which triggered a second income milestone.

In January, we spent extra time with their workforce serving to to optimize each the EPI deposition course of and the MST design integration. ST has now began manufacturing MST wafers in their very own fab which will likely be used for electrical tons offering silicon validation. As a result of this whole course of is in-house, their cycles of studying on this stage ought to be fast. When ST is glad that they’ve created a totally optimized transistor and manufacturing course of growth package, or PDK, they are going to freeze it. Simply to be clear, we think about this whole effort from set up by PDK to be a part of Part 4. For a chip designer, a brand new PDK is like getting the most recent and best software program with all the most recent options. In my expertise, engineers will maintain off on new chip designs till this PDK turns into obtainable, making a pent-up demand for brand new design begins.

So on this case, we count on that a number of chips will likely be developed in parallel with course of Qual and a few could even take out previous to the Qual being full. For the subsequent a number of years, new chip designs will likely be taped out primarily based on this PDK and can enter manufacturing and begin producing royalties. It is troublesome for us to forecast the amount of those designs as a result of they are going to be in many various purposes and market sectors and can ramp at totally different charges. However as you possibly can think about, over time, the proportion of MST-based designs of their fab will improve considerably.

Once we first introduced this transaction, we believed SDM may get to commercialization in 1.5 years to 2 years. Regardless of the delay in beginning set up, we consider that timing nonetheless holds. Though a lot of this execution is out of our management, we’re laser-focused on doing every part we are able to to make sure ST’s manufacturing ramp of MST is as profitable and as speedy as potential. Our different prime precedence as an organization is getting extra clients below the identical path to manufacturing. So now let me present some updates there.

As you possibly can see from our buyer pipeline, we’re displaying progress in Part 4, reflecting the ST set up however there’s much more occurring below the hood. Within the final name, we spoke concerning the glorious outcomes we had with our JDA 1 buyer and its applicability to considered one of their largest BUs. Growth efforts proceed however we’re nonetheless engaged on placing collectively a enterprise association which is able to meet each our wants. I can guarantee you this can be a very excessive precedence for us however the end-of-year holidays slowed down these discussions and we’re working to get this program shifting extra shortly.

We proceed to be excited concerning the experiments with our JDA 2 buyer that are nonetheless making their means by the fab. Good outcomes right here ought to pave the best way for a license settlement on this space. As well as, we’re additionally in discussions with this buyer about beginning work in one other space as nicely. A pattern we’re seeing within the greater voltage semiconductor space is offering a tailwind to our MST choices. Chinese language firms have began to enter into the low finish of this section which has precipitated a few of the extra established gamers to deal with differentiating their expertise to be greater efficiency.

MST is uniquely suited to ship efficiency enhancements with our SP and SPX applied sciences. And in This autumn, we signed an MST CAD license settlement with a big producer to begin engaged on it which reveals how momentum for each MST SP and SPX is rising. Curiosity in our RF SOI expertise additionally stays robust and now we have a number of totally different buyer wafer runs underway.

Just lately, we had been invited to present a paper, co-authored with Soitec within the San Jose State College on the upcoming IEDM Convention in March which is able to present particulars on how MST on an RF SOI substrate can improve efficiency of each our switches and LNA’s. The IEDM convention which occurs each December is a good discussion board for us and it’s centered on the most recent gate throughout and nanosheet transistors.

Curiosity in using MST for these units has been spreading and has created glorious alternatives for brand new engagements and partnerships. On the geometries being utilized in these superior nodes, new challenges are being raised which demand extra management on the atomic degree than has ever been crucial. Atomera’s diffusion management, discount of random open fluctuation and enchancment in floor roughness scattering are seen as potential to offer the management wanted for these nodes.

In Q1, our workforce has been busy working with a number of superior node producers which ought to finally result in new enterprise. The identical options driving curiosity in superior nodes can be stimulating demand within the reminiscence house and our work with these clients continues to be lively and thrilling.

Lastly, we get quite a lot of questions on how MST is said to the fast-evolving developments in synthetic intelligence. And I can inform you it is intensive. Final quarter, I spoke about how AI will drive demand for extra and totally different sorts of reminiscence which MST will help ship. One other space the place MST will carry large worth is in chiplets. As chances are you’ll know, AI algorithm calls for have change into so large. It is troublesome to fulfill them with single-chip options. The business has reacted to this downside by creating a brand new structure which collects plenty of smaller chiplets on a silicon interposer. The fantastic thing about this structure is that every chiplet might be developed within the optimum course of expertise for its function and the truth that MST offers efficiency boosts that every one these totally different nodes brings huge worth which ought to change into a brand new driver for MST adoption.

I consider we are going to look again at 2023 because the yr once we turned the nook commercially. Our first manufacturing license with ST, adopted by the nice progress we have made in This autumn will likely be appeared upon because the set off for Atomera’s success. Along with ST, we made critical buyer and technical advances in every of our goal product segments. One factor that has change into much more obvious this quarter is that as clients begin to perceive our expertise extra, they provide you with new methods of utilizing MST that we have not even imagined which ought to change into a robust progress driver for our expertise horizontally throughout current clients as our penetration will increase. MST is really a tremendous instrument and the sensible workforce right here at Atomera is difficult at work on masking its potential and delivering it into the arms of future licensees day-after-day. That is the kind of execution that results in a profitable enterprise and I can inform you, I am extra optimistic than ever about our potential.

Now, Frank will evaluate our financials.

Francis Laurencio

Thanks, Scott. On the shut of the market at the moment, we issued a press launch saying our fourth quarter and full-year outcomes with 2023. This slide reveals our abstract financials.

Income in 2023 was $550,000, all of which was acknowledged in This autumn and resulted from set up and acceptance of our MST expertise at ST Fab. Our GAAP web loss for the yr ended December 31, 2023, was $19.8 million or $0.80 per share in comparison with a web lack of $17.4 million or $0.75 per share in 2022. GAAP working bills had been $21.2 million in 2023 which was a rise of roughly $3.4 million from $17.8 million in 2022. The most important driver of the year-on-year improve was a $2.5 million improve in R&D bills, roughly $1.4 million of which was as a consequence of greater spending on foundry providers, metrology and different outsourcing and $739,000 of which was as a consequence of greater payroll and associated prices.

Normal and administrative bills elevated by roughly $634,000 reflecting greater payroll bills in addition to greater authorized charges. Gross sales and advertising and marketing bills elevated by roughly $251,000. Different revenue web in 2023 elevated by $802,000 as in comparison with 2022, primarily as a result of greater rates of interest on money and short-term investments.

Turning to our quarterly outcomes; This autumn 2023 GAAP web loss was $4.6 million or $0.18 per share in comparison with a web lack of $4.3 million in This autumn 2022 which was additionally $0.18 per share. Within the third quarter of 2023, GAAP web loss was $5 million or $0.20 per share. The decrease web loss in This autumn in comparison with Q3 was as a consequence of our This autumn income. Whereas GAAP working bills had been mainly flat at $5.3 million in This autumn in 2023 in comparison with $5.4 million within the previous quarter as R&D bills declined as a result of winding down of actions at TSI, offset by will increase in G&A and gross sales and advertising and marketing.

Non-GAAP web loss for 2023 was $16.6 million and compares to a lack of $14.1 million in 2022. And as with our GAAP outcomes, this was primarily as a consequence of elevated R&D bills. The variations between GAAP and non-GAAP working bills in all durations offered are primarily as a consequence of noncash inventory compensation bills which had been roughly $4 million in 2023 and $3.4 million in 2022.

Our steadiness of money, money equivalents and short-term investments on December 31, 2023, was $19.5 million in comparison with $21.2 million on the finish of 2023 and $20.4 million on the finish of Q3. Over the past yr, we used $14.6 million of money in working actions and we bought roughly 1.8 million shares below our ATM facility at a median value of $7.97 per share. Of these quantities, roughly 320,000 shares had been bought in This autumn at a median value of $7.37. As of December 31, 2023, we had 26.1 million shares excellent.

As Scott talked about, we met the primary 2 milestones below the ST license settlement throughout This autumn, leading to $550,000 of license income. The following grant of license rights to ST will likely be our distribution license which is able to allow them to each manufacture and promote merchandise with MST. These gross sales will lead to royalty funds to Atomera. Whereas we aren’t capable of share the monetary particulars of the ST contract, the phrases are in keeping with our goal mannequin.

Underneath this mannequin, complete upfront license charges have a listing value of over $3 million, with funds growing as we grant clients further rights. As Scott defined in his remarks, timing of entry into Part 5 which is once we will acknowledge income on the grant of the distribution license is essentially below ST’s management. Accordingly, I am not offering steerage on the timing for recognizing that income. I count on that our Q1 2024 income will consist solely of ratable recognition of MS TCAD licensing.

Transferring to our expense steerage; our non-GAAP working bills for 2023 had been $17.1 million and we count on that in 2024, our non-GAAP OpEx will likely be within the vary of $17 million to $18 million. Whereas this can be a wider vary than I offered in earlier calls, that is as a result of unsure monetary impression of shifting from TSI semiconductor to a brand new foundry. Our work with TSI wrapped up in January of this yr. And consequently, our R&D bills in This autumn declined from prior quarters in 2023. We’re making good progress in talks with potential substitute suppliers for foundry providers however nothing has been finalized but.

Whereas the interruption in foundry work will trigger Q1 2024 R&D expense to say no farther from This autumn, we count on to incur some one-time charges as we transition to a brand new foundry and we are going to replace our steerage when now we have extra visibility.

With that, I’ll flip the decision again over to Scott for just a few abstract remarks earlier than we open up the decision to questions. Scott?

Scott Bibaud

Thanks, Frank. As you possibly can see, we made nice progress in the direction of commercialization this previous quarter and in 2023. We’re doing every part in our energy to get ST to manufacturing shortly however we even have an extremely useful portfolio of different potential clients who we’re working to take into the business stage. Our workforce is assured that it is solely a matter of time earlier than we are able to announce license offers that may additional solidify the potential of that Merus enterprise for the longer term.

Mike, we are going to now take questions.

Query-and-Reply Session

A – Mike Bishop

Okay. Thanks, Scott. [Operator Instructions] And proper now our first query comes from Richard Shannon of Craig-Hallum. Richard, please go forward.

Richard Shannon

Thanks, Mike and thanks, Scott and Frank, for getting me in your name right here and congratulations on the nice success of indels yr right here. Possibly a few questions associated to STMicro about the timeframe to productization of 1.5 to 2 years right here. It sounds such as you’re speaking about some very attention-grabbing work with them. I do not wish to get out forward of my skis right here however there’s any motive to suppose that, that timeframe may very well be on the decrease finish of that simply due to all of the engagement you have been having. I do not wish to learn an excessive amount of into it however I simply wish to get your ideas there, Scott.

Scott Bibaud

Sure. As I stated, we won’t predict the timing of it. They have not really given us a schedule that they are making an attempt to hit. Nonetheless, I’ll say the progress we have made in simply the final couple of months, we did — since we did the set up is de facto fast in our expertise they usually have the potential for shifting very quick. As soon as MST is put in inside somebody’s fab, they will actually crank up the engines and end up these new wafer experiments in a short time. So, there’s some likelihood, I might say. I might say I am nonetheless holding to the 1.5 to 2 years from our announcement date final Could however there’s an opportunity it may very well be on the sooner finish.

Richard Shannon

Okay. Whenever you say have we gotten the schedule from STMicro, would you count on that? And how much — any means you possibly can characterize what which means? Is {that a} regular strategy of citing any Sengupta course of? Or is there any specifics to Atomera that create the deviations from the traditional, I suppose?

Scott Bibaud

I do not suppose there’s something that is a deviation from the traditional on this case. That being stated, I’m not aware about what they think about a standard growth timeframe for an analytic product like this. I do know that for a few of our clients, they might have completed quite a lot of that growth work in Part III. And after they get to Part IV, they’ve most of it completed. However as individuals will bear in mind for ST, they did their Part III work a very long time in the past, form of put it on the shelf and now they’re form of — they’re taking this they usually’re doing it for a brand-new course of node. So, they do have some work to attempt to — I imply, I feel they are going to get superb outcomes on their first run however their purpose is to unfold MST in quite a lot of locations, to allow them to get good outcomes throughout an increasing number of parts of their designs.

Richard Shannon

Okay, truthful sufficient. And a follow-on query on the subject STMicro right here. We have talked about this for the reason that day that you simply introduced this again in April of final yr however you talked about — I suppose I am going to seek advice from it as a halo impact of driving different firms to wish to undertake MST. Possibly you can simply characterize any of the discussions that you simply’re having. And I suppose the important thing for me is do individuals must see this in manufacturing and really chips popping out the manufacturing unit earlier than they pull the set off? Or do you suppose this may be an accelerator catalyst earlier than then?

Scott Bibaud

It is undoubtedly already an accelerator and catalyst. In conversations with clients now, we’re discussing our enterprise mannequin and what we might wish to see from them, they are saying, sure, I acknowledge that ST is doing it after which we go on from there. However that is nice as a result of prior to now, they might say to us, no one has ever completed this earlier than. So why do you suppose we must always do it? So, it is actually a giant sport changer.

Richard Shannon

Okay, nice to listen to there. You talked about this final quarter by way of — and now you might have — I feel you used the phrase license for MS TCAD with the massive analog producer. Is that this an instance of this halo impact? Or is it separate and even began earlier than ST was publicized?

Scott Bibaud

I feel it is undoubtedly an instance of the halo impact. After all, we had been going to persuade these guys earlier than we introduced ST and we really did work with them. However seeing ST has precipitated them to take it to the subsequent degree. And I hope that the MSTcad is step one in form of shifting alongside to doing an precise set up and license. Though we have not introduced that but however that is what we hope is the trajectory.

Richard Shannon

Okay. Nicely, you form of co-opted my follow-on query on this subject which is what are these subsequent steps right here, each internally that you can characterize plus any public occasions, so to talk, just like the license as you simply talked about.

Scott Bibaud

Sure. I imply for those who take a look at what I talked about for the productization effort for ST, they’re beginning all of their work with TCAD; An MS TCAD is an add-on to a normal TCAD that provides the MST stuff into it. So, for any of our clients, it might be — within the semiconductor business, I might say the vast majority of producers are a — they wish to see precise bodily outcomes on a chunk of silicon earlier than they decide. However for a few of the gamers within the business, they wish to run simulations first after which make their choice to maneuver to silicon. And so, I feel it is actually good that they are doing each paths. We’re ready to help them on each paths and it reveals the seriousness. It is not a small deal to dedicate just a few engineers and some very costly Synopsys TCAD seats to working completely on integrating MST into your course of expertise. And so we hope that goes someplace is nice.

Richard Shannon

Okay. And I am assuming because you described this as a big analog producer that that is one thing they’d set up and use internally versus working with any person else like maybe a present engaged Atomera buyer. Is that truthful?

Scott Bibaud

Sure. I do not suppose they’d work with an engaged Atomera buyer. I feel each firm within the globe at the moment is even when they’re an IDM; they’re in all probability fab mild, so that they use some exterior foundry in addition to inside capability. So these guys may go in both route however — sure.

Richard Shannon

Okay. Two fast questions and I am going to get a line right here. I am positive there are a few others to wish to ask questions right here however simply associated to GD1 right here. Sounds such as you made some progress in discussions with some enterprise models there but it surely did not detect something that was imminent and also you’re simply hopeful. I do not wish to put phrases in your mouth, so perhaps you possibly can simply characterize the dynamics there. And do you suppose you have gotten previous I do know at this level in sure different studying cycles you have gone by them with them, I feel, over the past two — I feel it has been greater than two years, appropriate?

Scott Bibaud

Sure. I imply we have completed quite a lot of stuff with them. We have proven them quite a lot of knowledge. And by the best way, we’re persevering with to do technical work for them to point out them much more outcomes of issues that may be completed with MST. We began in discussions with them on the enterprise aspect in form of within the fourth quarter. And no, we have not accomplished that but. I do not suppose that is that uncommon. And clearly, we won’t give particulars of precisely the place we’re on these discussions however these are the sorts of issues that take a while. And over the Christmas holidays, we actually did not decelerate however each large firm has received quite a lot of issues occurring on the finish of the yr with purpose setting and reorgs and compensation discussions and every part. And so, I undoubtedly really feel like they had been a bit distracted on the finish of the yr. And so in January, we began to actually attempt to get it ramped again up. And hopefully, we’ll make higher progress now.

Richard Shannon

Okay, truthful sufficient. And the final query, I am going to soar on the road right here. You signed a license with an unnamed fabless RF buyer, I feel, again in like 2018 or one thing like that; I have never heard a lot about them since. You talked each quarter about what feels like some bridge engagement in RF SOI usually. Possibly simply characterize what the precise buyer has been doing since that announcement or just lately? And does that overlap with any of the commentary on RF SOI you had talked about at the moment prior to now…

Scott Bibaud

Sure, sorry; it undoubtedly overlaps. We’re nonetheless working with that buyer. We’re nonetheless doing growth with them and we hope that turns into one thing superb sooner or later; in all probability may have completed a greater job in my ready remarks of connecting that specific buyer with our RF SOI work however that’s one thing that’s persevering with and we’re fairly enthusiastic about.

Mike Bishop

Our subsequent query comes from Cody Acree of Benchmark.

Cody Acree

Congrats on the progress this yr. Frank, if we might be actually clear in your steerage for Q1, you stated ratable STMicro license. Are you able to simply be clear on what you are anticipating for the primary quarter?

Francis Laurencio

Sure. No, I used to be not referring to STMicro. I used to be speaking to license income from MS TCAD. So sure, that is — and people will not be massive quantities. So, I did not go into particulars however I feel prior to now, the most important we have had of income from a single on this quarter from MS TCAD was below $10,000. So, this can be a bigger engagement but it surely’s nonetheless form of in that vary. Sure, that is separate from STMicro.

Cody Acree

Any impression in your delay with TSI? I perceive the R&D push, the lumpiness, that may are available subsequent yr however — or later this yr. However is there any enterprise impression on that delay?

Scott Bibaud

We do not see any enterprise impression from the delay. None of our wafers would go to a buyer of any form, whether or not it’s — actually with ST, they’re now put in and doing every part in fast turns of their fab. However for purchasers that may have been sending wafers to us for MST deposition, that by no means disflow by TSI both. TSI was solely a automobile for us to have the ability to do inner R&D testing. And so, it has no impression on clients. By way of longer-term R&D, sure, extended incapability to work with the foundry would have some impression on us however we’re not seeing that. We really had a a lot greater spend within the first 3 quarters of 2023 than we had in earlier years with TSI. Now a part of that was value will increase and form of sooner turnaround however we had been capable of — as we form of received into This autumn, anticipate that they had been winding down and run fairly just a few wafers that we are able to use for extra inner testing and for TCAD calibration. And in order that’s maintaining us loads busy now. And we’re very shut in discussions with signing up a brand new foundry. So, we do not anticipate that that is going to harm us commercially in any respect.

Cody Acree

Glorious. And Scott, perhaps are you able to discuss a bit extra about this engagement with MST, SP and SPX, the brand new engagement that you simply talked about in your ready remarks.

Scott Bibaud

Sure, I am unsure what else I can say about it. So perhaps you possibly can simply discuss what it means to license MS TCAD. So our MS TCAD is a software program bundle that sits on prime of Synopsys’ TCAD software program and it offers individuals to investigate the efficiency that MST may carry. This explicit buyer needs to do form of a complete evaluation of how MST may get added into their product line. And so which means it is a reasonably large set up for them. And so we’re charging them at a month-to-month degree to have the ability to use it and we’re offering fairly a little bit of help to them. Now that — what’s often the case for purchasers who’re specialists in greater voltage expertise is they don’t seem to be going to make use of our MST SPX or SP packaged product however they are going to take a look at how we do this after which they use the tips we discovered to how — in order that MST could make their product higher.

So, we’ll practice them put all the tips within the commerce into their growth after which they will change their current designs to get greater efficiency ranges out of these. I talked a little bit bit about this pattern the place greater voltage ships goes to China. We’re seeing that an increasing number of. And so undoubtedly, most of the gamers are attempting to both make their current portfolios, greater efficiency for decrease prices so then compete higher with these with the Chinese language fabs.

Cody Acree

After which lastly, simply you talked about some elevated curiosity in DRAM round a chiplet technique. Are you seeing engagements within the DRAM which can be materials? Or is that this simply extra street map plausibility?

Scott Bibaud

Now we have been speaking to DRAM producers for a short while now. We do not have something to announce there but however we undoubtedly are nonetheless in discussions with plenty of firms there. It is not particularly associated to chiplets however it’s one thing that I feel can be utilized in chiplets similar to any reminiscence expertise. However we’re speaking to individuals about DRAM. We’re speaking to individuals about different reminiscence architectures and we’re even performing some work on how MST may assist to vary reminiscence architectures to make them extra conscious of the wants of AI reminiscence calls for. So once more, plenty of issues that we’re engaged on in R&D that we have not introduced but however that we hope will flip into one thing quickly.

Cody Acree

Would you characterize these as pretty early stage but?

Scott Bibaud

Our work with DRAM producers will not be early stage however a few of the different work, I might say, is earlier stage, sure.

Mike Bishop

A few questions on the Q&A line right here. Scott, you talked about tech within the ready feedback. Are you — the query that got here in is, are you concerned with Soitec Know-how Good SIC going into manufacturing with STMicro this yr?

Scott Bibaud

Sure. So now we have been working with Soitec for plenty of years. As you guys know, we have been speaking about RF SOI and the advantages we carry there for a very long time. And most — I might say, proportion of that RF SOI that is delivered to the market is delivered by Soitec. So now we have been working with them to make sure that our product works nicely with theirs. We have now not introduced any form of a partnership with them or any form of engagement with a joint buyer, just like the query you are asking about STMicro however we actually hope that any buyer who can be utilizing RF SOI can be very interested by working with each us and Soitec.

Mike Bishop

All proper. And one for you, Frank. There was a remark concerning the improve in gross sales and advertising and marketing bills within the fourth quarter. Do you wish to deal with that?

Francis Laurencio

Sure. This sort of applies really throughout all areas of working bills. However as you noticed, we had the $550,000 of income in This autumn which is a vital milestone. One of many issues that impression our bills throughout all departments is the annual bonus that we accrue as we obtain sure milestones. And so with an essential milestone like that in This autumn, that actually elevated the quantity of bonus accrual within the quarter. In any other case, although gross sales and advertising and marketing might be very spotty. There’s quite a lot of journey and we actually spent quite a lot of time this yr touring to clients. However I would not learn something extra into that different than simply journey and total throughout the corporate, accrual of bonuses which isn’t all the time linear each quarter.

Mike Bishop

Okay. And there is a request for an replace for — concerning the Chips Act and the information that we put out final yr. And I used to be questioning, Scott, for those who may present an replace on the CHIPS Act.

Scott Bibaud

Sure. After all, we talked final yr about what — I imply we predict the CHIPS Act actually offers a tailwind for us in some ways and particularly the institution of the brand new nationwide semiconductor growth heart that they are speaking about. So, now we have gotten concerned and quite a lot of that, as you realize, our announcement is about our involvement out in Arizona with Arizona State College. However the different factor concerning the CHIPS Act is to — within the early rounds of RFQs that chipset has been placing out, it has been about individuals constructing fabs. First, the large firms, constructing fabs after which some medium-sized firms. We weren’t actually eligible for these however we’re doing quite a lot of work to get engaged with the federal government at totally different ranges, so we may very well be eligible for work on the CHIPS Act in different areas. And so once more, nothing to announce there however I might inform you that, that is one thing that we’re engaged on.

Mike Bishop

Okay. And I see Richard Shannon has his hand up. Richard, did you might have one other — a follow-up query?

Richard Shannon

I did, Mike. Thanks. Scott, I will reask Cody’s final query on a special subject. He requested form of the maturity of labor within the DRAM house and thanks for that reply right here. However I am going to flip round and throw it on the superior nodes. And I wish to get your replace on and finally characterizing the state of affairs there relative to DRAM or different dynamics and the way that workflow is in keeping with work you have completed in different areas like energy and RF SOI, etcetera.

Scott Bibaud

Sure. I feel it is attention-grabbing. It is not precisely the identical kind of labor that we’re doing in energy and RF SOI. Let me deal with just a few issues. First, within the superior nodes, the sizes that you simply’re working with are so small that it actually has required us to do new R&D to show our capabilities to show that we are able to develop a movie and ship it on the tiny course of geometries that they’ve and once we do this if it could actually nonetheless be efficient. And so, now we have completed that and we did that working together with a few of the superior node clients who’ve actually guided us in the direction of what they would want if we had been capable of carry them some options. We have additionally — I feel prior to now, we have put some papers out and perhaps even some white papers about another issues which can be very helpful. Considered one of which is the floor roughness scattering enhancements.

That is fairly technical however there are totally different scattering mechanisms that occur in transistors after they’re sending electrons throughout them they usually impede the mobility of electron movement. As you get to very, very small course of geometries, one of the crucial troublesome scattering mechanisms that is gotten very — has gotten rather a lot worse is the floor roughness and we really proved that MST is a really uncommon answer or no less than enchancment to floor runes scattering. And in order that’s one thing that is garnering consideration from quite a lot of business individuals.

After which really, earlier within the fall, we put out a white paper and I talked a little bit bit on the earnings calls about random dopant fluctuation. Once more, at very small course of nodes, you possibly can think about when you have a characteristic in your transistor, that is solely a number of silicon atoms broad and you’ve got open fluctuation and some dopants shifting into the unsuitable place is an actual downside. So, one of many large benefits of MST is that we will help to tamp down that separate scattering. I imply, sorry, that random in — and that’s additionally true for — I imply, nearly all of these issues are additionally true for the reminiscence makers. Now the reminiscence makers will not be coping with the identical extremely tiny geometries that they are working with in superior nodes. However they’re having comparable issues with the areas that I simply talked about.

So let me reply one different little a part of your query. One of many attention-grabbing issues about our options in these areas is that a few of them might be applied on a blanket wafer, that means that we are able to make an MST wafer that does not need to get built-in into the remainder of the method movement. It will be form of on the beginning wafer that they use to run issues. Once we begin speaking about one thing like that, to start with, it has the potential to be simpler to combine and subsequently, sooner time to income. Secondly, it offers us a possibility to companion with some gamers within the business who’re wafer suppliers. And if we had been ready to do this, then that may give us a very easy channel into getting success at a few of the semiconductor producers.

So, the place individuals use a lot decrease temperature manufacturing processes, they will use these kinds of options and that is true for essentially the most superior nodes and for generally in RF SOI as nicely.

Mike Bishop

All proper. So, one final query from the Q&A line right here and that’s about MST at STMicro and if it is going for use in additional than the Good Energy merchandise.

Scott Bibaud

Sure, nothing to announce there but, clearly. STMicro is a giant firm. I feel they’re studying about our expertise and one of many issues they will do with this new set up of their fab is simply attempt it out on different applied sciences. So, we’d be delighted in the event that they tried one thing else out and determined that it was good for them. And we will definitely be encouraging that kind of conduct.

Mike Bishop

All proper. Nicely, if you wish to proceed with any closing feedback. Scott?

Scott Bibaud

Certain. All proper. Nicely, I wish to simply thanks all for becoming a member of us at the moment. I am happy to have shared with you our efforts towards commercialization and expertise growth this previous yr. 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 might have further questions, please contact Mike Bishop, who will likely be pleased to comply with up. Thanks once more in your help and we sit up for our subsequent replace name.

Mike Bishop

Thanks, Scott. And this concludes the Atomera Convention Name.