4DS Memory share price plunges as semiconductor company initiates strategic review

• 4DS share price dives 67pc after coming out of trading halt
• Board orders strategic review, puts tech development on ice
• imec and Infineon ties cut as execs depart

There’s nothing like a trading halt to get investors on edge.

But when 4DS Memory (ASX:4DS) came back onto screens this morning, the relief didn’t come.

Instead, the stock went into freefall, down as much as 67% (per Market Index) after the company noted it was halting development and pulling the plug on two key collaborations.

For a company that’s spent years chasing a breakthrough in next-gen memory, today’s announcement was concerning.

The board has ordered a strategic review, which includes a pause on tech work and disengagement from imec, its long-time Belgian R&D partner, and Infineon, the German chipmaker that only last year agreed to design a custom ReRAM test chip.

That’s a hard swallow for holders, who only weeks ago were told the Sixth Platform Lot, 4DS’s first set of 20nm test wafers, had already been fully analysed, with a completed root cause study confirming etch residues shorted out the memory devices.

The company at that time said further process optimisations would be necessary to succeed in scaling from 60nm to 20nm.

The reality check

4DS’s technology – Interface Switching ReRAM – has always been pitched as the heir to DRAM, with the holy grail of persistence, speed, and endurance in one package.

But the semiconductor landscape isn’t standing still.

AI has turbo-charged demand for bandwidth and endurance, and right now, DRAM is doing the job.

That puts 4DS in a bind.

Investors have already funded years of R&D in the hope the Sixth Platform Lot could prove the tech could scale from 60nm to 20nm.

Instead, the company admits it would take materially more capital and time to try advance development further, without certainty of hitting the benchmarks demanded by global markets.

Weighing other opportunities

Today’s release also confirmed two big departures.

Chief Technology Officer Dr Ting Yen will leave within three months, while Chief Strategy Officer Peter Himes has already gone.

Both were central to 4DS’s development story.

The Infineon design agreement, signed only last December, has been terminated.

The collaboration with imec, the company’s longest-running research partner, is also being wound down. For shareholders, that’s a dramatic reset.

Instead, the board is now talking about “adjacent or complementary technologies” in the AI ecosystem, and looking at ways to monetise its patent portfolio, which the company says still represents real IP value.

It will also weigh “market-aligned opportunities” and other pathways to realise value.

The review is expected to run about three months with investors invited to a Q&A webinar to address shareholder concerns.

There’s still some money in the bank

The June quarter showed $9.25 million cash in the bank for the company.

“While the decision to undertake a strategic review is difficult, it is also the right decision,” said Chairman David McAuliffe.

“This strategic review is about ensuring that our capital is deployed in a manner which is most advantageous toward creating shareholder value in a fast-moving industry.”

The board also thanked shareholders for their “extraordinary patience and commitment” through the journey.