Weebit Nano (ASX:WBT) has a great start to 2025 and signs its biggest license deal yet

Weebit Nano (ASX:WBT)

On 2 January 2025, Weebit Nano (ASX:WBT) announced the third license deal for its ReRAM technology, in this case with American chip manufacturer ON Semi (NASDAQ:ON). ON Semi is a so-called Integrated Device Manufacturer (IDM), which means it designs and manufactures its chips in-house. By contrast, fabless chip companies, such as Apple or Qualcomm, only design their own chips, but outsource production of the actual chips to semiconductor foundries, such as TSMC and DB Hitek. The latter is another one of WBT’s customers.

We believe this license deal with ON Semi is potentially WBT’s large deal yet. ON Semi generated revenues of US$8.3bn in 2023 and is by far the largest of WBT’s 3 current customers. ON Semi is Nasdaq-listed and has a market capitalisation of US$27bn at the time of writing.

ReRAM for ON Semi’s TREO platform

ON Semi aims to integrate WBT’s ReRAM in its TREO platform for analog and mixed-signal applications, such as chips for power management, sensor interfaces and communication devices. In turn, these have their end use in areas such as Automotive, factory automation, robotics and healthcare.

These chips are built on BCD at 65 nanometer (nm) resolutions, which makes this the most advanced node for WBT’s ReRAM to date. BCD alludes to the family of chip manufacturing processes (Bipolar-CMOS-DMOS) that can be integrated on a single chip. Bipolar is best for analog applications, CMOS (complementary metal-oxide semiconductor) is best for digital processing, while DMOS (Double diffusion metal oxide semiconductor field-effect transistor) is ideally suited for power and high voltage applications. By combining these processes, you create a very versatile semiconductor.

An initial license fee, royalties to follow later

WBT will initially receive an up front license fee from ON Semi as well as non-recurring engineering fees. As usual with every new customer, WBT will need to work with ON Semi on the engineering side to integrate the ReRAM technology into the customer’s chip. It will then need to be manufactured, tested and qualified. Once that is done, which can take quite some time, the chip can go into volume production at which point royalties to WBT should start flowing.

More deals to follow in 2025

We expect WBT will be able to do more commercial deals in 2025. The company has been in discussions with many IDM’s, foundries and product companies, and has tied its financial bonus to the number of commercial deals it can do this year (3 minimum). So, while we’re off to a very good start to 2025, expect more good news to come!

Check out the full research coverage of Weebit Nano by Pitt Street Research here!

Disclosure: Pitt Street Research/Stocks Down Under directors own shares in Weebit Nano.

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