Adisyn (ASX:AI1): Next generation computer chips

Nick Sundich Nick Sundich, January 14, 2025

Up until a few months ago, Adisyn (ASX:AI1) was just one of several managed technology services providers. It was in a lucrative industry, but one that was highly competitive. But the company capped off 2024 by acquiring an Israel-based company called 2D Generation (2DG). 2DG is in the semiconductor space, seeking to use graphene as a material to connect very small transistors – by very small, we mean less than 2 nanometres – one nanometre is a billionth of a metre! Chip giants TSMC, Samsung and Intel are preparing for mass production of very advanced chips at 2nm in 2025!

 

Copper connection wires have become a big problem for advanced chip manufacturers

Transistors are semiconductor devices that regulate or control currents or voltage flow in addition to amplifying and generating these electrical signals. Transistors are a very common technology today and the connections between them are most commonly made using copper. But as transistors (and the chips they fit into) are required to become smaller and smaller, the copper interconnects are running into limits. They get so small that the resistance becomes very high, in turn requiring increased power consumption, which also increases heat on the chip. Additionally, current may leak away because the wire is so thin, which leads to errors on the chip.

Graphene is one of several solutions being researched by the industry, with ruthenium being one in particular. But graphene is the best option because of its high thermal conductivity and strength – it is 200x stronger than steel!

2DG has a technology that uses graphene, based on the principles of Atomic Layer Deposition (ALD). It can be done at temperatures much lower than those needed in other methods, is scalable and repeatable, provides precise control of film thickness and creates uniform layers on the transistors.

 

Collaborations with high-profile industry players

The company has all relevant IP rights, with the company having obtained all economic rights from the university it was developed at (Bar-Ilan University), and it has an exclusive commercial license to develop the IP in return for minuscule royalties and a 10% stake in the company by the university. 2DG has applied for 9 patents, eight of which are pending, while one is in National Phase.

It is working with imec, a semiconductor R&D powerhouse, based in Belgium, along with ConnectingChips, an EU initiative aimed at driving innovation and collaboration in the semiconductor industry with industry leaders, such as NVIDIA (NASDAQ:NVDA).

 

A demo chip by mid-2026 should kick start commercialisation

So, what’s next? The company is hoping to have a Demonstration Prototype by mid-2026 – in other words a 1x1cm chip. It is hoped that the company will speed up this process in the June quarter of 2025 once it has a special ALD tool delivered to it.

Once this has occurred, the company will seek collaborations in smaller projects to find application areas for its technology other than graphene interconnects. There are several areas including energy storage, quantum computing, biomedicine and industrial coatings. Nonetheless, transistors will remain the key market. It is estimated that the market for ALD quipment will be US$6bn by 2032, which would be a near-tripling from today’s levels. 2DG will license out its graphene deposition ‘cookbook’ and ‘recipes’ to future customers, not the required ‘pots, pans and ovens’.

 

Don’t discount the original business

Adisyn has an existing legacy business. For now, the company won’t divest this business and sees it as complementary to 2D. Adisyn was founded in 2012 as DCTwo and focused on providing cloud services from data centres. Over the last couple of years, the company has undergone a strategic adjustment, shifting to generative AI solutions and microservices and expanding onto the East Coast of Australia. The company is targeting SMEs as well as the defence industry in WA.

 

Valuation of A$0.29 per share

Our friends at Pitt Street Research released a report on Adisyn earlier this week. It has valued the company at $0.29 per share – $0.22 for 2D and $0.07 for the legacy business. The valuation for 2D was based on its peers – the average valuation of Audio Pixels (ASX:AKP) and Archer (ASX:AXE) which are at similar stages from a development point of view – and the valuation of the legacy business was based on a DCF model. We encourage readers interested in finding out more details to read Pitt Street’s report here.

It is plausible that 2D could be acquired down the track, although it is difficult to determine what such a deal could look like because it will depend on sentiment from the market and from the acquirer (i.e. how badly it wants the technology).

For the time being, this company has an exciting opportunity ahead of it and 2025 promises to be a big year.

 

Disclosure: Adisyn is a research client of Pitt Street Research. Pitt Street directors own shares in the company.

 

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