Weebit Nano's ReRAM technology primed to shake up booming memory chip market

The semiconductor industry is still booming, still top of investors’ minds
One of the main factors at play is a rising demand for non-volatile memory
Weebit Nano’s ReRAM tech has a chance to grab big market share in this hot field

Special Report: As the semiconductor industry heats up, Weebit Nano’s ReRAM technology emerges as a key player in the non-volatile memory market.

As investors are well aware, the semiconductor industry is currently hotter than ever with companies such as Nvidia captivating the market.

According to a recent report from Statista, global semiconductor revenue will exceed US$600 billion by 2025, fuelled by advances in AI technology and rising demand for memory in devices from smartphones to autonomous vehicles.

Memory chips represent one of the largest segments within this market, and the demand for high-performance memory is set to skyrocket.

Non-volatile memory (NVM), which retains data even when powered off, is particularly crucial for devices that require instant startup times and reliability.

NVM does not need a constant supply of electricity to store data, and this makes it ideal for applications that require low power consumption.

“Whatever you do, you need memory to work on it. That’s why this is such a huge market,” said Coby Hanoch, the CEO of one of the world’s leading companies in NVM technology, Weebit Nano (ASX:WBT)

Weebit is the only stock on the ASX now at revenue stage that gives Australian investors a direct link into this global industry.

Weebit’s flagship ReRAM (Resistive RAM) NVM technology fits perfectly into this landscape.

Unlike traditional Flash memory, which has been the dominant player for decades, ReRAM offers significant advantages in speed, power consumption, and endurance.

Hanoch explained that Flash technology has started to hit a wall; its physical limits make it increasingly inefficient for modern applications.

“Moore’s Law states that everything in semiconductors will continue to shrink, and we’re going to smaller and smaller geometries.

“For example, we’ve been going down from 40 to 28, to 22 nanometres, and into the teens. Now you hear about the more advanced ones going down to five, three to even two nanometres.

“As we push for faster speeds and lower power consumption, Flash simply can’t keep up,” said Hanoch.

In contrast, ReRAM’s unique architecture allows for greater scalability and efficiency, making it an ideal solution for the next generation of devices.

“This is why we’re seeing a shift in focus towards ReRAM; it offers the performance that today’s and tomorrow’s applications require.”

The case for ReRAM

One of the standout features of Weebit’s ReRAM is its ability to operate at extreme temperatures, up to 150 degrees Celsius.

This capability is critical for automotive and industrial applications where high reliability is a must. Automotive, for instance, is one of the best-known applications where temperatures can be very high, such as the engine or braking system.

The memory chips on these cars need to be very fast because we’re talking about human lives and when something happens, you want the car to react as fast as possible. Every millisecond counts.

When it comes to AI, the industry has shifted toward performing inference at the edge, rather than relying solely on centralised data centres. This is where ReRAM’s technology becomes crucial.

Hanoch explained that AI has two main phases: learning and inference.

“Learning is data-intensive and happens in large data centres, where enormous computational power is required,” he said.

“Inference, however, is increasingly shifting to edge devices. This transition is vital as it allows for real-time data processing closer to where it’s needed.”

He illustrated this with an example:

“Imagine a security camera that needs to identify threats in real-time.

Traditionally, the camera would send all video data to a data centre for analysis, but this requires significant communication bandwidth and power.

“But with ReRAM, the camera can perform inference on-site, making quick decisions without constant communication.”

Hanoch then added, “ReRAM’s overall capabilities will position it well to support the next generation of smart devices and AI technologies.”

TSMC is not a competitor, but a “potential client”

Hanoch acknowledged that MRAM (Magnetoresistive RAM) serves as an alternative competitor to ReRAM, but noted that MRAM faces significant challenges due to its reliance on magnetic fields.

“When external magnetic fields interact with the magnetic domains in MRAM cells, they can inadvertently alter the stored data,” Hanoch said, adding that this makes MRAM less reliable.

In contrast, he pointed out that ReRAM doesn’t rely on magnetic fields.

“This makes ReRAM a more reliable choice for various environments, especially as we move towards more advanced applications.”

ReRAM is also much cheaper to manufacture than Flash or MRAM. We’re talking about less than 10% added cost to a silicon wafer, compared to more than 20% for Flash and up to 40% for MRAM.

Also, Hanoch said a common misconception is that large foundries like TSMC (Taiwan Semiconductor Manufacturing Company) pose a threat to smaller companies like Weebit.

Currently, TSMC is actively developing its own ReRAM technology, but Hanoch believes that Weebit’s independent status gives it a unique advantage.

He underscored a critical point: TSMC is not designed to tailor components to customer specifications, which is exactly where Weebit Nano excels.

“Foundries like TSMC primarily sell wafers,” emphasising that the real innovation lies in enabling companies to create advanced systems on a chip.

“We’ve already had customers come to us for modifications that TSMC simply wouldn’t entertain,” Hanoch said.

“We’re the only independent provider of ReRAM that can offer it to anyone,” he said, highlighting the company’s strategic position in the market.

Also, despite TSMC’s dominance, Hanoch pointed out that major manufacturers often seek a second source to avoid dependency.

“So TSMC is not a competitor; they are a potential client.

“TSMC’s expertise in manufacturing and Weebit’s cutting-edge technology can create a powerful partnership,” he added.

Star-studded board

To guide a high-tech company like Weebit through a complex landscape, an experienced board is essential.

The calibre of Weebit’s Board and leadership team is world class, with many hundreds of years of accumulated semiconductor and NVM-specific experience.

David ‘Dadi’ Perlmutter, the chairman, has a strong background in technology investment and was instrumental in Intel’s growth. His team invented the Pentium processor.

CEO Coby Hanoch himself has extensive experience in engineering and sales, having driven significant revenue increases at Verisity and Jasper.

Dr Yoav Nissan-Cohen, executive director, boasts nearly 40 years in the high-tech industry, co-founding Tower Semiconductor and advancing semiconductor device physics.

Dr Atiq Raza, non-executive director, meanwhile, is a veteran in microprocessor technology, known for his leadership at NexGen and AMD.

“Having a board filled with such accomplished individuals ensures that we remain at the cutting edge of our field,” said Hanoch.

Road map ahead

Weebit’s long-term strategy is to work with the world’s Tier 1 foundries (semiconductor manufacturers that make chips for other companies) as well as integrated device manufacturers (IDMs) and product companies.

The company has stated that its operations in Israel remain unaffected by the ongoing military activities, as its lab is situated in a secure location equipped with a bomb shelter, an uninterruptible power supply and continuous software and data backup to the server.

In FY24, Weebit marked a major commercialisation milestone, receiving its first IP licensing revenues totalling $1 million for the year.

The company signed a licensing agreement with Tier-1 foundry DB HiTek in South Korea, which further validates the quality of its embedded ReRAM

Under the IP licensing model, Weebit will generate revenue from foundries, IDMs, and product companies via licensing fees for design and manufacture; engineering fees for design and process support; and royalties per customer use.

Royalties will then be received once customers begin shipping end products.

Hanoch explained that investors need to be a bit patient, because in the semiconductor industry, “these kinds of agreements often take years of negotiations”, and that with big customers, it’s roughly an 18 to 24-month cycle until they actually move into mass production and start generating royalty revenues.

He noted that until a technology is “silicon proven”, companies are hesitant to fully commit, as “everyone knows they need ReRAM”, but they are waiting for others to take that initial leap.

“There’s always that level of caution, and everyone wants someone else to make the first step.”

But Weebit Nano is already actively engaged with over a dozen foundries and iIDMs, and Hanoch said he hopes to “finalise significant deals soon”.

“Many companies have faltered in this space, but our experienced team has navigated through challenges, and we’re well-positioned to capitalise on the growing demand for innovative memory solutions.”

This article was developed in collaboration with Weebit Nano, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.