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4DS Memory (ASX:4DS) shares plummet on technical hurdles and production delays

Technology
ASX:4DS      MCAP $158.7M
04 November 2021 12:03 (AEST)
4DS Memory (ASX:4DS) - Managing Director & CEO, Dr Guido Arnout

Source: 4DS Memory

Semiconductor maker 4DS Memory (4DS) has nosedived on the ASX today after revealing to investors some technical hurdles in the production of its memory cell technology.

The company said test work for its third non-platform lot wafers found some potential “modest degradation” in endurance for the memory tech.

Specifically, 4DS maintains that while the endurance of its memory cell tech is still “several orders of magnitude better” than conventional flash memory, the third non-platform lot wafers performed worse than the company’s second non-platform lot, on which test results were reported back in February.

Effectively, the latest round of test results means 4DS has had to extend a working contract with international research and development firm Interuniversity Microelectronics Centre (imec) to take on more testwork for the third platform lot wafers.

“These testing challenges highlight the need to switch from using non-platform lots to using platform lots which include imec access transistors,” 4DS said in a statement.

“The third platform lot will also include a test chip: an imec 1 megabit array using
4DS’ ReRAM cells.”

The company said by adding imec access transistors to the 4DS resistive random-access memory (ReRAM) memory cells, the companies will be able to more precisely measure the tech’s endurance and retention.

However, the new round of testing for the technology delays 4DS’ development timeline by roughly three months.

The imec contract extension

4DS said it would first take on a memory stack etch mask change and other etch process optimisation work, meaning it expected the start of the third platform lot to occur in early 2022.

This means the tech’s out-of-fab date is now slated for July 2022.

As such, the company has had to extend its contract with imec, which was due to expire on December 31 this year, by one year.

Under the renewed contract, 4DS will pay imec an extra €600,000 (A$933,000) for the first seven months of 2022, at which point the companies will review the requirements for the balance of the rest of the year.

Meanwhile, imec is still entitled to a royalty of 8 per cent of 4DS’ license income, capped at €5 million (A$7.8 million).

Shares in 4DS Memory broke out of a one-month suspension this morning, tumbling 45.71 per cent to a 2021 low of 7.6 cents as of 10:58 am AEDT.

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