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RESEARCH: Weebit Nano, Clear Line Of Sight To Revenues

FYI | Nov 04 2019

By Pitt Street Research
Weebit Nano Ltd. ((WBT)) is developing an emerging computer memory technology that combines the best of today’s mainstream memory technologies, such as DRAM and Flash memory.

WBT’s SiOx ReRAM is non-volatile like Flash memory and is nearly as fast as DRAM. Due to its superior properties, including speed, data retention, power consumption and endurance, ReRAM is expected to complement and, most likely, partially replace some of these dominant memory and storage technologies.

Flash, DRAM, SRAM etc. are used in a wide range of products, such as micro controllers and sensors, which are found in most electronics used in consumer, industrial, automotive, medical and military applications. In other words, WBT’s addressable end-markets are large and very diverse.

Collaborations are the key to commercialisation

To date, the company has demonstrated working megabit arrays at 40nm resolutions and is currently targeting 28nm, which would be more than sufficient for most memory applications. The company has recently announced several collaborations in two key target markets, i.e. with China-based XTX and Kitec Design in Korea.

We believe such partners, with their elaborate local networks, will prove to be the key to successful commercialisation. The collaboration with Kitec has already resulted with a first potential customer in Korea.

Investment case: From lab to fab

Weebit Nano is currently entering the monetisation phase for its technology and is moving away from being a pure development company, i.e. the lab. We expect embedded ReRAM applications will present the first commercialisation opportunities in the near term.

The market for embedded ReRAM, is expected to show very strong, long-term growth as it starts to complement some of today’s mainstream memory technologies, such as NOR Flash and SRAM. There is even potential to replace NOR Flash in certain applications.

On the back of some of the aforementioned industry collaborations announced in 2019, we expect the company to be able to start landing commercial licensing deals in 2020, paving the way for SiOx ReRAM to eventually move into production fabs.

Valuation of $1.65 per share

If Weebit Nano can secure multiple customers, in the embedded memory space initially, we believe the shares can rerate towards valuation levels seen in recent M&A transactions in the semiconductor IP (Intellectual Property) and memory industry, i.e. towards A$1.65 per fully diluted WBT share.

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