Release Date: July 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Atomera Inc (ATOM, Financial) is making solid progress with ST Microelectronics on next-generation smart power products, which could result in significant royalty revenue.
- The company has seen strong customer interest and engagement, particularly in the power chip and RF-SOI markets.
- Atomera Inc (ATOM) has successfully recruited new team members, including a new Head of Business Development and Marketing, to enhance its sales and marketing efforts.
- The company has submitted its first proposal under the CHIPS Act, indicating potential for future funding and support.
- Atomera Inc (ATOM) reported a decrease in GAAP net loss and operating expenses compared to the previous year, reflecting improved financial management.
Negative Points
- Revenue for Q2 2024 was only $72,000, indicating limited immediate financial impact from current customer engagements.
- The company has not yet achieved definitive production programs with some of its key customers, such as JDA1.
- Progress in converting customer engagements to licenses has not met expectations, highlighting challenges in closing deals.
- The timing for recognizing significant license revenue from ST Microelectronics remains uncertain and largely dependent on ST's development schedule.
- Atomera Inc (ATOM) is still in the early stages of development for its GaN technology, with potential revenues not expected to be significant in the near term.
Q & A Highlights
Q: Your language didn't really say anything about expectations relative to your initial commentary about how long the ST Microelectronics project would take. Is it fair to say that the timeframe is still in play here or no changes as far as you know?
A: It's a challenging question to answer. ST owns the schedule for this and has specifically asked us not to talk about it. We are all working to push this into production as fast as possible, and progress is going very well. (Scott Bibaud, President, CEO)
Q: You mentioned you're in active negotiations with JDA2 after some good testing results. Can you provide more details and any perspective on the length of time before reaching a satisfactory result?
A: We received promising data from JDA2, and there is interest on both sides to move forward into a license or agreement. Negotiating a contract with large companies can take time due to their bureaucratic processes. Our turnaround on proposals is quick, but their response can be much longer. (Scott Bibaud, President, CEO)
Q: Regarding RF-SOI, you made an interesting press release about some breakthrough on very thin wafers. Can you characterize the potential here, especially from a timing perspective?
A: The announcement with Soitec to make very thin wafers is important as it takes development substrates out of the R&D lab and into production quality. This lowers the barriers for adopting MST for this solution and should help speed up the process. (Scott Bibaud, President, CEO)
Q: Is the timeframe for DRAM similar to gate-all-around in terms of length of time, or is it shorter and more predictable?
A: DRAM manufacturers tend to come out with new nodes every 18 months. Because DRAM is so cost-focused, a small cost advantage makes sense to bring into production quickly. Therefore, DRAM could potentially get designed in and into production faster than other technologies. (Scott Bibaud, President, CEO)
Q: You mentioned that GaN could generate some revenues before the end of the year. Can you elaborate on how that would happen?
A: We have shown our test results to potential partners, and there is a lot of interest. We might be able to make and sell wafers for development purposes before the end of this year. This would signal strong interest in adopting our technology. (Scott Bibaud, President, CEO)
Q: Why are the proposals for the CHIPS Act only now being pursued?
A: The CHIPS Act funding came in waves, initially focusing on large-scale manufacturing and packaging. The recent call for proposals was relevant to our work on compound semiconductors, specifically GaN on silicon. We expect more funding proposals and will respond to those. (Francis Laurencio, CFO)
Q: Why now to push for closing deals? Shouldn't there have been urgency all along?
A: We've always had urgency, but sometimes you need to reassess and make changes. We now have more proposals out than ever, and accelerating their closure will have a bigger impact. Our new Head of Business Development and Marketing, Shawn Thomas, is already making a difference. (Scott Bibaud, President, CEO)
Q: What are the barriers to ST going to production? Do they have the design kit formalized, and what's involved in qualification?
A: There are no significant barriers, but it takes time and effort. Developing a PDK involves several cycles of learning and testing. Once the PDK is locked down, companies typically go into process qualification. MST is helping exceed improvement levels, which should facilitate moving forward. (Scott Bibaud, President, CEO)
Q: Do recent developments with Soitec increase the probability of getting to market while maybe pushing back the timeline?
A: The developments with Soitec improve the likelihood of customers going to market and should speed up the process without pushing out the timeline. (Scott Bibaud, President, CEO)
Q: Is there an update on the foundry license that you've previously discussed?
A: We are continuing to work with the foundry on moving our technology into the next-generation process node release. (Scott Bibaud, President, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
