Nanoveu becomes an AI player with its EMASS acquisition…and the potential upside is huge

Nanoveu is the next semiconductor stock on ASX

Years ago, the technology journalist Robert X. Cringely, in his 1992 book Accidental Empires, introduced us to the idea of what we now call ‘semiconductor economics’ – that if a new semiconductor or Information Technology approach is 10 times better than what came before, in terms of speed, efficiency or cost effectiveness, it is likely to displace what had been widely used until that time. And that could lead to significant commercial outcomes for the developer of that new technology.

In this article we’d like to tell you about a new semiconductor stock on ASX that isn’t 10x better, it’s 20x better!

Nanovue acquires EMASS

On 15 October the nanotechnology developer Nanoveu (ASX: NVU) announced that it had acquired a Singapore-based venture called Embedded A.I. Systems Pte Ltd, or ‘EMASS’ for short. EMASS, which had its origins at Singapore’s prestigious Nanyang Technological University, has developed a so-called System-on-a-Chip, or SoC, with 20x the power efficiency of comparable chips.

As we’ll explain, that is a big deal because it has the potential to help create what people are calling ‘AIoT’, that’s the Artificial Intelligence of Things. Which is a multi-billion-dollar opportunity in the making. And with EMASS, Nanoveu can play a role in this space.

The chips are up

SoC is short for ‘System-on-Chip’. As that term suggests, it’s where you build an entire computer system on one chip instead of having all the different parts sitting on a circuit board separately. SoCs are what makes ‘Edge Computing’ possible.

When you’re computing at the edge, you’re doing complex calculations on the chip itself without the need to send the bits and bytes up to the Cloud and back. Without Edge Computing we won’t have things like autonomous vehicles and remote surgery go mainstream, because critical decisions won’t be able to be made in real time without the latency, that is, the wait time inherent in sending data back and forth to the Cloud.

Up until now the catch with SoCs and Edge Computing is getting chips that can run without costing the earth in terms of energy consumption. Which is where the 20x thing comes in. EMASS’s SoC, with 20x the energy efficiency of competitor chips, is a technology to watch given that most Edge Computing applications in the future are going to be power-sensitive because they are typically battery-operated and not connected to the power grid.

EMASS is the brainchild of Associate Professor Mohamed Sabry Aly at NTU in Singapore. Professor Aly, originally from Egypt, gained his PhD from the Swiss Federal Institute of Technology in Lausanne and did post-doctoral work at Stanford before going to Singapore. If you could summarise Professor Aly’s work in a nutshell, it centres around the use of materials at the nanoscale that allow chips to work in three dimensions rather than just two and on better ways to organise chips to get stuff done faster with less power consumption.

Taking a RISC

EMASS was formed to commercialise ideas which Professor Aly developed for a low-energy SoC. Importantly, he architected it with ‘RISC-V’. A computer’s architecture is the way the internal components are designed and organised. Inside your phone there’s likely an architecture called ‘ARM’, owned by a British company called Arm Holdings plc. Inside your computer is likely the ‘x86’ architecture, owned by a company you’ve doubtless heard of called Intel.

But inside EMASS’s SoC is RISC-V and that’s great news for developers because that architecture is completely open-source, meaning anyone can modify, adapt and implement, without any permission from a governing body. So, once EMASS’ technology starts to get used to make SoCs, its can scale quickly.

Highly energy efficient

How good is EMASS right now? Its SoC can take 13 million AI parameters and crunch them at 30 Giga-Operations per second, but do so at less than 2 milliwatts of power consumption. That’s not as fast as names you’ll be hearing about in the future such as SiMa.ai from Silicon Valley or Hailo from Israel, but it’s a heck of a lot more energy efficient in terms of TOPS/W, that is, Trillions of Operations per Second per Watt.

Right now, EMASS can do about 12 TOPS/W. The next best thing is only about 0.6 TOPS/W, from a British company called Sentiant. Importantly, EMASS’ SoC can be made today. TSMC, the Taiwanese semiconductor powerhouse, can fabricate the chips and India’s MosChip Technologies can make the printed circuit board it sits on. And keep in mind that for EMASS it’s 12 TOPS/W right now. Moore’s Law works with these kinds of chips as it does with conventional chips, so over time the TOPS/W will increase.

The applications are legion

The potential uses of EMASS’s SoC are legion, because Internet of Things devices can now be replaced with a device that can do AI (Artificial Intelligence) to become part of the Artificial Intelligence of Things. Before, the IoT was “simply” a network of smart, connected devices. Now those smart devices are still part of the Internet, but no longer necessarily need a connection to a datacentre to function. And with highly efficient AI capabilities these devices can predict what happens next and take action.

Nanoveu will now look to take the EMASS SoC and license it to all sorts of companies doing things like drones, medical implants, fitness wearables and so on. Importantly, Nanoveu wants to take a product it has developed, called EyeFly3D, which converts 2D content to 3D without glasses, and use EMASS’s chips to markedly increase the number of devices it can run on and the applications to which it can be applied. There are opportunities in medical imaging and in autonomous vehicles, among many others.

Commercialising EMASS

What’s next for Nanoveu with EMASS? The company is paying $5m in shares (at 2.9 cents) plus performance rights for commercialisation milestones and the Nanoveu shareholders will have to vote on this. Once the transaction closes, we expect a good deal of time will be spent talking to potential users about licensing agreements, while there will be announcements related to development of the EyeFly3D products and further optimisation of the EMASS SoC itself.

In late 2024, excitement about AI is still present in our capital markets and it’s reasonable to expect Nanoveu can get a good reception for EMASS. So, put Nanoveu on your watch list, because we believe this stock is where Weebit Nano (ASX:WBT) was a few years ago!

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