DorsaVi (ASX:DVL): This sensor business is now the newest ReRAM player

The game has changed for DorsaVi (ASX:DVL) and its investors. For many years, it has had a sensor business focused on the clinical and workplace safety markets that only grew modestly but a recent deal with the largest chain of therapy clinics in the USA is expected to change that.

But earlier this year, DVL just licensed a ReRAM technology from a Singaporean university. Investors familiar with Weebit (ASX:WBT) would know its strong potential and superiority to other workhorse memories technologies. While it will take DVL a few years to develop, we see strong potential to integrate it into existing sensors, and also to enter new applications.

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DorsaVi’s existing business

DVL’s sensors were FDA approved a decade ago and come in various wearable forms depending on the data needed. They have been gradually upgraded over time and are currently having Video AI integrated. Whilst DVL’s sensors are not the only options on the markt, they differ in having regulatory validation, serving as a proactive rather than a reactive solution and how they provide tailored recommendations for intervention.

The clinical-focused sensors solutions providing objective movement assessment, remote monitoring and real-time biofeedback. They are used by individual clinics and elite sporting environments, and they track athlete movement, assesses posture and motion as well as the state of limbs. Immediately after assessment, DorsaVi’s technology delivers a concise report pinpointing any movement dysfunctions, supported by FDA (and TGA)-cleared objective biomechanical data collection. They help clinicians make decisions such as determining whether or not patients are ready to return to sport.

As for the workplace solutions sensors, they analyse worker movement, identify unsafe practices that may lead to injuries, and support organisations and clinicians in mitigating these risks and promoting safe behaviour. These sensors have applicability in several sectors, including manufacturing, retail, utilities, transportation, health care, hospitality, resources and construction.

The sensor business would arguably be luctrative enough without ReRAM. Just taking the clinicians segment, there are >240,000 therapists who perform movement assessments on their patients. Assuming a yearly subscription of $948, this is a potential US$227m revenue opportunity from the Video AI product alone.

DorsaVi has already had a promising year with contract wins and expansions, most notable its three-year agreement with SANO Health and the deal with Select Medical. It has also managed to cut costs significantl as it moved to a Saas model (i.e. from $9.8m in 2018 to under $2m today. Investors should watch for more US clinical, sports or enterprise contracts.

DVL enters the ReRAM space

As we mentioned, DVL has licensed ReRAM IP from NTU in Singapore. To make a long story short on ReRAM, it can replace other older forms of memory technology that can no longer cope with today’s technology demands needing chips that are smaller and smaller, but becoming more and more powerful and also remaining energy efficient.

ReRAM is the exact same technology Weebit is working on. DVL’s ReRAM is slightly different because of how metal oxides are used and how their cells achieve resistive states. It must be admitted that DVL’s isn’t as simpler, cheaper and easier to embed as Weebit’s which uses a silicon oxide design. Nonetheless, its advanced memory cell structure (enabling precise control over defeat formation and preventing excessive current surges during operation) means lower energy consumption, enhanced state stability and facilitates interface activation.

Now of course, it will take time for DVL’s ReRA Mto reach the market. We think 2028 is realistic for commercialisation, although discussions around technical collaborations with foundries and IDMs culd be earlier. But first, development work for a mature technology node, proprietary design and fabrication processes will need to be done.

Big opportunities

Given the durability and scalability of ReRAM, the world could be its oyster once it is commercialised. We see robotics and automotives as being the biggest opportunities. The key use case for DorsaVi’s ReRAM in robotics lies in its ability to handle the vast streams of real-time data generated by sensors, cameras and environmental monitors. These platforms demand reliable, high-speed storage.

As for EVs, it is common knowledge that demand and unit growth accelerate year by year. This is driving improvements in manufacturing efficiency, the rapid expansion of gigafactories and the integration of advanced technologies such as cameras, radar, LiDAR, and AI processors for driver-assistance and autonomous systems all of which rely heavily on memory.

DorsaVi ReRAM can retain data for up to 10 years at 85°C, with testing at 125°C degrees underway, ensuring durability in harsh conditions. Ultimately, 150°C degrees will be required if the company is to address sector like Automotive, where operating conditions are harsh.
With write speeds between 50 and 200 nanoseconds, data from sensors is captured and stored almost instantly, enabling robots to react in real time and execute tasks with precision.

The challenges

AsWeebit Nano and 4DS Memory have demonstrated in the last 8 years, the commercialisation of next-generation memory is complex, and DorsaVi’s roadmap involves execution, funding and market adoption challenges that may impact outcomes. These boil down to both specific risks with the oxide materials chosen in this ReRAM, not to mention the risks of semiconductor IP development generally.

On top of that, DorsaVi does not have a dedicated management team yet for the Semiconductor side of the business that has extensive experience in developing semiconductor IP. We can only presume this will happen in the near future.

There’s Upside for investors

But if the company can get it right, there is an opportunity for a significant payoff. Our friends at Pitt Street Research have valued the company at $0.22 per share, $0.13 per share for the existing sensor business and $0.09 per share for ReRAM. Pitt Street released a report earlier this week explaining the company, its new ReRAM technology and opportunity in more detail and encourage readers interested in more information about the company to check out the report here!

DorsaVi is a research client of Pitt Street. Stocks Down Under directors own shares in DVL.