Category Archives: SoftBank, Applied Materials, IP Licensing,

Atomera (ATOM): Facts and Figures as of 3/2/21

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Updated 3/2/2021

With today’s news that Atomera has completed their IP tech transfer and installation into one of the worlds largest multi-billion dollar fabs this signals the start of Phase 5(Qualification runs) followed by royalty generating production parts. In my experience this is a huge milestone for Atomera as this fab upgrade costs the customer $60m/node and they will not sign off on the tech transfer until the equipment is running perfectly. In fact I would expect that the sign off only happened after a full qualification run has been completed. There is no other way to verify it works. A full qualification run would take 2 months which is when the JDA was announced on January 5th. This fits the timetable and was probably the final piece to sign off on the tech transfer. I expect Phase 5 qualification to be 2 to 3 runs covering 6 months putting the fab possibly to be in production in late 2021. Keep in mind the JDA allows other nodes with this customer to skip phase 4 and go right into phase 5.

  • Atomera (ATOM)
  • 22.4m shares outstanding
  • $37.9m in cash, no debt
  • $14m/year burn rate
  • 370 fabs and approx. 500 nodes potential
  • Est. $64m/year royalties per node
  • 13.70m(61%) held by Institutions/Insiders

Atomera is engaged in the business of developing, commercializing and licensing proprietary materials, processes and technologies for the $450+ billion semiconductor industry. We believe that by incorporating MST, transistors can be smaller, with increased speed, reliability and energy efficiency. We believe that MST can be widely incorporated into the most common types of semiconductor products, including analog, logic, optical and memory integrated circuits.

  • Atomera shares outstanding 22.4m
  • Insiders 3.1m or 13.8%
  • Institutions holdings from 13f filings 10.6m or 47%
  • 13.70m(61%) shares held by Institutions and Insiders
  • Float 8.7m shares before retail estimate
  • Estimate retail holdings 6-7m(guess)
  • Estimated Float less than 2m after retail estimate
  • Shares Short 2.2m(1/31), real time 2.8m
  • Cash $37.9m burn rate $3.5m/qrt approx as of 12/31
  • 269 patents with 26 patents issued in 2020 and 1 so far 2021
  • 10 patent applications in 2020 pending issuement

Any due diligence from this site is for entertainment only and not a solicitation to buy or sell Atomera stock. Any estimates are just examples of what is possible and should not be considered financial advise. I have not been compensated in any way and will never be compensated for my reports.

Atomera (ATOM): 61% of shares held by Institutions and Insiders after Q4 filings

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Every quarter I review all the current 13f filings and get an idea of who is buying. Since Q1 the number of 13f filings is up 3x from 23 in Q1 to 75 in Q4. Adding all the 13f filings there are now 10.473m shares accounted for and with insiders holding 3.1m shares approx. 61%(13.70m) of the 22.4m total outstanding shares can be accounted for as of 12/31. I suspect much of the buying in 2021 has been institutions given the increase in volume and price and we will see those filings in another 3 months. With $37.9m in cash and no need to sell shares the number of available shares is shrinking every day.

  • 75(Q4) Institutions/13f filers now own shares up from 23(Q1)
  • Institutions increased to 10.50 up from 10.173k(Q3)
  • 46 Institutions bought/added shares in Q4 and only 25 sold

Atomera is engaged in the business of developing, commercializing and licensing proprietary materials, processes and technologies for the $450+ billion semiconductor industry. We believe that by incorporating MST, transistors can be smaller, with increased speed, reliability and energy efficiency. We believe that MST can be widely incorporated into the most common types of semiconductor products, including analog, logic, optical and memory integrated circuits.

  • Atomera shares outstanding 22.4m
  • Insiders 3.1m or 13.8%
  • Institutions holdings from 13f filings 10.6m or 47%
    • Blackrock Inc. 1.148 million up 148k
    • Valley High Capital 1 million
    • Valley High Limited Capital 1 million
    • Peter Appel 871k down 500k
    • Vanguard 849k up 93k
    • Vulpes Innovative Technologies 743k
    • AWM Investment 578k down 90k
    • Hollencrest 556k up 41k
    • K2 Energy 520k
    • Susquehanna 300k up 214k
    • Geode Capital 271k up 46k
    • Statestreet Capital 245k up 29k
    • Citadel Advisors 240k up 120k
    • Avenir Corp 239k
    • Flagship Harbor 223k New 223k
    • Bard Associates 193k
    • Northern trust 188k
    • Sargent investment 152k up 7k
    • Sculptor Capital 124k up 61k
    • https://whalewisdom.com/stock/atmr
  • 13.70m(61%) shares held by Institutions and Insiders
  • Float 8.8m shares before retail estimate
  • Estimate retail holdings 6-7m(guess)
  • Estimated Float less than 2m after retail estimate
  • Shares Short 2.1m(2/13
  • 10 Day average volume 825k/day
  • Cash $37.9m burn rate $3.5m/qrt approx as of 12/31
  • 269 patents with 26 patents issued in 2020 and 1 so far 2021
  • 10 patent applications in 2020 pending issuement

Any due diligence from this site is for entertainment only and not a solicitation to buy or sell Atomera stock. Any estimates are just examples of what is possible and should not be considered financial advise. I have not been compensated in any way and will never be compensated for my reports.

Atomera (ATOM) year end CC: CEO says 2021 is going to be a breakout year

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Summary. With $37.9m in cash they have never been in better financial shape. The MST technology is installed in one of the world’s largest fabs and the technology transfer will be completed shortly. Multiple additional JDAs and/or manufacturing licenses in the pipeline. When the company CEO says 2021 is going to be a breakout year he is not kidding.

  • CC key takeaways
  • JDA #1 signed in January along with manufacturing license
  • Additional JDAs and/or manufacturing licenses in pipeline
    • JDAs allow additional nodes to move directly from phase 3 to phase 5
  • MSTcad released and getting positive customer feedback
  • $37.9m in cash, $14m 2021 costs (2+ years funding)
  • $400k in JDA fee licensing payments in Q1 or Q2
    • Upon payment indicates tech transfer completed and move to phase 5(qualification) and then phase 6 (Production royalties)
    • Companies don’t go to phase 5 unless they plan to go into production
  • Patent portfolio up to 269 issued and pending
    • Patents up 46% in last 2 years
  • Epi Tool installation covers both 200/300mm wafers and is in final check out before acceptance
First of many JDAs or manufacturing licenses signed

The importance of a JDA is it allows the JDA customer to go directly from phase 3 to phase 5 on additional nodes skipping the integration phase 4 since it was already done on other node. The companies own engineers have been trained in the technology and are advocates for adoption. The first JDA being signed is clear signal to rest of industry they need to be working with Atomera.

EPI tool in final checkout phase before acceptance

This Epi tool is unique in that it supports both 200mm and 300mm wafers sizes. Atomera engineers have been able to use while in the acceptance phase. Down to final few items before accepted. Between the Epi tool and MSTcad software addition of new pipeline customers will accelerate.

Multiple companies with multiple phase 3 engagements
Patents issued up 17% last year and 46% over last 2 years
Customer feedback positive

The below are the question and answer portion of the CC.

How can Atomera impact chip shortage: Example of 200mm fab could install MST technology and it would allow them to reduce die by 20-25% and thus give each wafer 20-25% more capacity.

Is the chip shortage stopping fabs from running wafers using MST. No. Fabs are prioritizing wafer runs and MST technology is top priority so they are getting R+D runs still even though fabs are very busy due to shortages.

Please provide update on previous licensees.

All are very secretive and don’t want any information on where they are at getting out. AKM had fire and is recovering but fully committed to going forward. The other 2 are hopefully moving to Phase 4 soon.

Any due diligence from this site is for entertainment only and not a solicitation to buy or sell Atomera stock. Any estimates are just examples of what is possible and should not be considered financial advise. I have not been compensated in any way and will never be compensated for my reports.

Atomera (ATOM): A true Unicorn in today’s investment forest

Characteristics of a Unicorn

  • Disruptive to industry (adopt or be noncompetitive)
  • No competition
  • Can’t be duplicated i.e. Atomera fenced patent portfolios and implementation know how
  • Hyper Growth Potenial (zero to billions in royalties)
  • Industry recognition (People, papers, patents, Synopsys conference etc..)

The top question you always hear is why isn’t my stock trading higher? In the  case of Atomera the answer is pretty simple. While it is a true Unicorn in the sense there just aren’t any other stocks quite like it, it also isn’t what is striking the fancy of today’s investor. Its not a biotech curing some uncurable disease, its not an Electronic Vehicle company that will be lucky to sell 10k vehicles over the next few years, its certainly not launching into space like dozens of companies all chasing a tiny market or one of the mighty SPACs who nobody really knows what they do but prices keep going up. No, its a company that is going to make lots of royalties for years to come as it gets adopted by the world’s largest semiconductor companies. The good news is there are groups of large investors that look for companies with exactly the combination of disruptive technology, quickly ramping revenues with large earnings potential that Atomera brings to the table. The even better news is these investors, whether we want to call them institutions or investment funds, have arrived. This changing of the guard from retail to institutional ownership will also make it much harder for shorts to manipulate the share price. Long term holders paying into the mid 40s last week will make it even more difficult to find shares to cover the very large short position in the stock.

I don’t usually summarize a week’s trading in great detail but I think we are going to look back at this week’s trading as a changing of the guard in terms of share ownership. For a long time retail has played a significant role in the stocks direction. The volume and price over the last two weeks seem to indicate much larger investors or funds taking over the ownership. Ultimately there are only 22.4m shares outstanding and a much smaller amount in the float. After Wednesdays CC there were a lot of sellers who were looking for a reason to sell and were expecting some major announcement that was unlikely to be part of a year end CC. As can be seen in the weekly chart the stock ended slightly down for the week and the chart looks very similar to when its last big step up. The key piece of information that most investors seemed to overlook is the Phase 4 work that is completing in the very near future. This is the installation and tech transfer of the MST technology in one of the worlds largest semiconductors fabs. From the call it should also be obvious that this fab has multiple nodes. Upon completion, in the very near future, the semiconductor company will then start qualification runs and then head into production. Having done tech transfers many times let me assure you that they are already doing qualification runs as part of the tech transfer. The large semiconductor company will not sign off on the tech transfer unless they are 100% convinced it works. So while they still will run qualification samples prior to starting royalty generating production its a done deal once Phase 4 is completed. This is truly a defining moment in the companies history and marks the next step to industry wide adoption. The second JDA, when announced, is another huge catalyst and will accelerate the rest of the industry to adopt. There are also 9 other customers in Phase 3 that can start Phase 4 at any time.

All weekly indicators are indicating continued upward movement with possible breakout to mid 50’s.

Multiple customers in Phase 3 likely to move quickly to Phase 4

Any due diligence from this site is for entertainment only and not a solicitation to buy or sell Atomera stock. Any estimates are just examples of what is possible and should not be considered financial advise. I have not been compensated in any way and will never be compensated for my reports.

Atomera (ATOM): Royalty potential is highest the industry will ever see

Atomera is a semiconductor licensing company whose earnings will come from royalties. Their technology is being adopted in nodes of the world’s largest fabs. There are 370 fabs worldwide and closer to 500 nodes. The large fabs they are working with first, probably have at least 3 nodes each. The example below is just one large node producing 80k wafers/month(see note below) and will generate $64m/year in royalties for Atomera. Each node will generate $205m in extra profit for the fab meaning it will be a huge financial and technical advantage to adopt. Each of the first two JDAs will hopefully have 3 nodes each and the first license will also be 3 nodes. In the first full year of running the first 9 nodes, of the potential 500, will generate $576m in royalties for Atomera. While exact start of the royalties could be as late as 2022 there is also the possibility the first licensee will go into production in 2021.

Modified Atomera slide showing $64m/year in royalties for 1 node
  • NOTE
  • This example uses 80k wafers/month for estimating purposes but the VERY large nodes are capable of 120k-200k wafers per month.

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Industry Definitions:
Joint Development Agreement (JDA) – major contract between two parties enabling technology to be adopted throughout the organization.  Involves significant capital investment, license fees, and proprietary information sharing. In the case of Atomera a JDA allows the company they are working with to quickly adopt the technology on other nodes. In the first JDA after the Phase 4 tech transfer is complete(Q1) and the company moves the first node to Phase 5(qual) they can start installing on other nodes and go from Phase 3 (which a number of customers are in) directly to Phase 5. That is the benefit of a JDA over just a license. As mentioned in the recent CC the JDA is more a teaming of customer and Atomera engineering that allows the customers engineers to do the tech transfers on other nodes much more quickly since it is done with the companies own experts who are much more familiar with their own companies proprietary nodes.

TCAD Software Modeling and EPI tool will speed future developments.

Any due diligence from this site is for entertainment only and not a solicitation to buy or sell Atomera stock. Any estimates are just examples of what is possible and should not be considered financial advise. I have not been compensated in any way and will never be compensated for my reports.

What value is the Atomera ( ATOM ) IP to companies like Apple, Tesla, Synopsys, Applied Materials and SoftBank

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Edited on 2/13 to add section on what type of company is likely to be interested in acquiring Atomera after the next JDA is announced.

Atomera is an Intellectual Property licensing company that plans to generate royalties based on three unique revenue streams. The companies technology is used in the semiconductor materials space that currently has a Total Addressable Market (TAM) of $450b with a CAGR around 7-10% or growing roughly $35-45b/year. By 2025 the TAM should be well over $600b.

The three unique royalty revenue streams will be from the following: wafer sales, individual piece parts and specific technology patents used in specific applications.

Wafer royalties. Large wafer manufacturers, like some shown below, will pay a 2% per wafer royalty to manufacture wafers with MST technology. These wafers will then be used to manufacture parts that can take advantage of the low resistance super high performance wafers. As soon as one of the large wafer manufacturers start selling these unique wafers the rest must follow quickly in order to stay competitive. Also companies like Qualcomm and Apple will demand multiple sources for these wafers. My guess is at least 7 large fabs will be producing these wafers within the next 2 years as these become standard across the industry.

3 out 4 of top 5 in 2021 possible producing MST parts

Individual piece part royalties. These will be for companies like STMicro, Qualcomm, Apple, TI etc. who are designing parts that will take advantage of the MST properties for lower power, size, voltages etc. Two example calculations will be provided for two of the companies that have licensed MST technology already. For this example Qualcomm was used as the large fabless company but it could be Broadcom, Apple, Google etc…

Licensing of specific patents for unique piece parts. The company has received many patents for specific technologies like memories, image sensors, varactors and waveguides. I suspect these will all be licensed as families and will provide another revenue stream down the road. This is not calculated here and each family could be sold to specific companies given their specific nature.

Valuation of first JDA (large wafer manufacturer)

  • Atomera and Market Leading Semiconductor Company Sign Joint Development Agreement for Use of MST in Future Devices
  • Announced it has entered into a Joint Development Agreement (JDA) with a leading semiconductor provider for integration of Atomera’s Mears Silicon Technology (MST) into their silicon fabrication process. 
  • This latest agreement is part of Atomera’s effort to develop deeper and more strategic relationships with selected customers through JDAs – an agreement format that is well suited to large customers who have multiple production nodes, process technologies and product divisions.
  • https://ir.atomera.com/websites/atomera/English/3110/news-detail.html?airportNewsID=24a8d292-7f66-42ca-a29f-ec0645d0b5d0
Use $58m per node for model
  • Assumptions
  • As stated in PR first JDA is with leading semiconductor company
  • Use mature valuation per node of $58m/year royalties
  • As stated in PR this will be multiple nodes and product lines
  • Use 3 nodes in model
  • Valuation
  • 3 nodes x $58m/node = $174m/year in royalties from first JDA that was just announced

Piece part estimates for STMicro and Qualcomm. These are just a few of the many companies I expect to adopt the MST technology. The royalty will be 1-3% depending on how critical the technology is for the part. For ST will use 2% and for Qualcomm 3% since I believe the new Qualcomm 5G parts will require MST to meet the power requirements of next generation cell phones.

STMicro. Use total chip sales of $9.56b for FY19. Use range of adoption of 10%, 25% and 50% with royalty rate of 2%. Brings royalties of $19m, $48m and $96m. For this example will use $48m/year possible for this license.

Qualcomm. Use chip sales of $5.3b which only covers area of QCT, RFFE and IoT chip sales. Using range of adoption of 10%, 25% and 50% with a 3% royalty rate. Royalties would be $15.9m, $39.6m and $79.2m. For this example will use $39.6m possible for this license.

Current valuation for first JDA and 2 current licenses.

The JDA that was signed would bring in $174m in royalties and the two licenses an additional $87.6m. Roughly $260m/year in the first full year of running. Given their costs of roughly $10m/year the potential earnings would be $250m/year divided by 22m shares. Since the company has $37m in cash there is no further reason to dilute. Earnings potential $11/share based on 1 JDA and 2 out of 3 of current licenses. Using a PE of 20 gives target price of $100-150 by end of year based on what is currently known. Target of $220 in 2022.

Who is most likely to buy Atomera

Many people who look at Atomera ask the question if the technology is so great a large semiconductor company would have bought them years ago. This is the least likely scenario. Just like we are seeing with SoftBank trying to sell ARM to Nvidia none of Nvidia’s competitors who use ARM are excited about licensing from a direct competitor. This is exactly the same problem a large fab would have if they owned the MST technology and another large fab wanted to license. Can you imagine Samsung doing installation on a TSMC node? Not going to happen. But companies like Apple insist that multiple companies be able to produce their parts so they force companies like Qualcomm to develop multiple companies to produce their parts. So while I expect every large fab to adopt MST over the next several years the installations will need to be done by companies that are not direct competitors to the fabs themselves in terms of making semiconductors. The list below is likely a good starting point in who would be interested in acquiring the company and the second JDA will certainly bring interest once it becomes obvious that industry wide roll out is starting.

Who would be interested in owning Atomera and why

Why would companies like Tesla and Apple be interested in an IP company? It wouldn’t primarily be because of the royalty stream but instead be leverage over the large fabs to make sure they get their parts first. The industry is seeing a shortage in fab capacity and major automobile and electronics manufacturers are seeing shortages in electronic part deliveries. Since this is probably not going to change in the future having this leverage over the fabs would insure their parts are delivered on time.

Synopsys, Inc. provides electronic design automation software products used to design and test integrated circuits. With the release of MST Cad, which is a speciality program to allow designers to design parts taking advantage of the unique properties of MST. Given they are one of the industries top simulation companies they have the unique ability to understand the value of the MST technology. They are in perfect position to purchase the IP and license to other semiconductor companies given their long relationships with everyone in the industry.

Applied Materials, Inc. provides manufacturing equipment, services, and software to the semiconductor, display, and related industries. They have been a long time partner and are critical for modifying the semiconductor equipment that is used to make wafers to implement MST. They are in the unique position, working with all the fabs, to take advantage of selling equipment specifically to take advantage of MST. This would give them a proprietary advantage in the space. Any of the semiconductor equipment partners they are working with would also be potential acquirers.

SoftBank Group Corp. is a Japanese multinational conglomerate holding company headquartered in Minato, Tokyo. SoftBank owns stakes in many technology, energy, and financial companies. The are best known in the IP licensing space having purchased ARM holding, a processor company, for $32b in 2016 and is now selling it for $40b to Nvidia. ARM only creates and licenses its technology as intellectual property (IP), rather than manufacturing and selling its own physical CPUs, GPUs, SoCs or microcontrollers. This is the perfect company to buy or invest in Atomera. While they could just purchase they may decide to take an equity stake in the company and then help speed up adoption by providing resources and contacts within the space. I would guess they could speed adoption to 50% penetration by several years.

Large fabless companies Qualcomm and Broadcom will also be possible acquirers. While not considered in the original analysis since I did not think an individual semiconductor company can own this technology since it needs to be adopted across the industry it is possible that a fabless semiconductor company could. Since these fabless companies would not be competing with other fabs they could license the MST technology without directly competing with the fabs. In fact the fabless semiconductor companies are in the unique position of needing multiple fabs to adopt as soon as possible and this would help get fab priority for parts and also control their costs by earning royalties.

Where do I think Atomera is headed

Ultimately, as investors, what we really want to know is where is the company headed? With the first signed JDA there is no longer any doubt the company is moving forward and also little doubts about future JDAs. With this info it is going to be much easier for a potential acquirer to figure out what this is going to be worth. The majority of royalties will fall right to the bottom line as there is little overhead in counting wafers and cashing big checks. So if in a few years down the road, cash flow will be over several billion a year, the question is what can you get away with paying right now for this future payoff. My guess is between $2-3b or 100+/share. Another key piece is could an acquiring company, that is much larger, ramp this technology faster. Absolutely. 20 current employees become 200 and huge seminars every month draws in the remaining half of the semiconductor industry they have not had the bandwidth to work with. Thats one possible scenario and a company like SoftBank has entire departments that do nothing more than model these type of deals to decide who to purchase and at what price.

All Tool Suppliers potential acquirers
3 Unique Patent Portfolios to license

Special thanks to @Benph from stocktwits on royalty calculations.

Any due diligence from this site is for entertainment only and not a solicitation to buy or sell Atomera stock. Any estimates are just examples of what is possible and should not be considered financial advise. I have not been compensated in any way and will never be compensated for my reports.