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Weebit Nano (ASX:WBT) signs 2nd foundry partner. Interview with CEO Coby Hanoch.
October 23, 2023
WBT, Weebit, Weebit Nano
Weebit Nano (ASX:WBT)
We spoke with Weebit Nano CEO Coby Hanoch about WBT’s new industry partner, South Korea’s 2nd largest foundry DB HiTek. This 2nd foundry partner provides further validation for WBT’s technology and may expedite partnering discussions with other foundries and IDM’s. Full transcription below and our latest article on Weebit Nano HERE.
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Disclosure: Pitt Street Research/Stocks Down Under directors own shares in Weebit Nano.
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Marc: Hello, and welcome to Stocks Down Under. Today, we’re joined by Coby Hanoch, the CEO of Weebit Nano. Good morning, Coby.
Coby: Hi, Marc.
Marc: Before we go into the good news that you announced on Thursday, let’s just briefly talk about, you know, how the team is going with everything that’s going on in Israel. How are you doing, and how’s the Weebit team doing?
Coby: Well, it’s a very difficult situation, obviously, when you’re bombed, and have to run to shelter with sirens, and so on. So not exactly ideal life. However, I’m glad to say that the Weebit team, their families are okay. And, you know, we’re keeping the tradition of the Israeli industry of not losing a day, and not changing anything in our schedules and working according to plan. So, yeah, we do have to run to shelter every once in a while, but we’re definitely focused on keeping our milestones.
Marc: Right. And so have any of your team been called up for active duty, and how’s the company in itself as a whole doing? Is it interrupting your workflow a lot? You mentioned, you know, having to go into the shelters every now and then, but… Just wondering about that.
Coby: Well, one of our employees has been drafted. You know, almost everyone is volunteering here and there, and helping out. You have to really deal with that. But overall, as I said there’s a big focus, actually, we doubled down, and make a bigger effort to meet the milestones. And as you can see with today’s announcement, that was part of it.
Marc: All right, good stuff. Yeah, let’s get over to the good news. Because the announcement, that’s a very big deal for you guys. DB HiTek, the number two foundry in Korea. Tell us about DB HiTek, and also about, you know, how long has this deal been in the make? Because you’ve been talking to many, many companies for a little while now.
Coby: Yeah, you know, these kinds of deals take very long to get in place. These big foundries, DB HiTek, we call them DBH for short. And these guys are a very big foundry, very well known, especially in the analog and power domains. You know, we’ve been talking to them, you could say for even, you know, it goes into years. It’s been a long discussion working with them, showing them that everything is good. You know, they did their testing. We’re very happy to have them on board. This is a very big step forward for us. They have hundreds of customers that are now available for us, big customers. You know, they have companies like Intel, and Qualcomm, and Sony, and Toshiba, and Texas Instruments and others as their customers. So now, that we’re working with DBH, we can actually start talking to those customers about using ReRAM.
Marc: So before we go into the specifics of the products that they have, can you enlighten me, Coby, because I saw the announcement this morning was not market or price-sensitive. And obviously, this is very price-sensitive. Can you shed some light on why it was marked not price-sensitive?
Coby: Yeah, that’s one of the things that drives me crazy. This is such an important announcement for us. You know, opens up such huge revenue opportunities. And, you know, we market price sensitive. I have no idea why the ASX, at the last moment, decided to downgrade it to a regular announcement.
Marc: Can you talk a little bit about DBH and the applications, and where we will, at some point, find, you know, Weebit ReRAM in what sort of products?
Coby: Well, they’re well known in the analog space. So, analog products, power management, sensors, you know, displays, etc., that’s where they are very strong. And we’ll be working with them, and working with their customers to really push ReRAM into these applications.
Marc: Right. And so, obviously, you’ve got 130 nanometer process that was qualified at SkyWater. You could say, you’ve got that ready to go, basically, with DBH. They manufacture it at 90 nanometers, but also, they go all the way up to, I think, 350 nanometers. So it’s a wide range that they work at. But, can you talk a little bit about how this relationship might evolve? Would it start at, say, 130 nanometers, go up to 180, or go down to 90? How do you see that going?
Coby: So, I don’t know right now to say, you know, Dongbu, obviously, or DBH have many different process nodes. The agreement opens the door to license the technology to additional process nodes at DBH. And we’ll be talking to them, you know, let’s first get the 130 going, 130 is the sweet spot at DBH. So, we’ll be focusing on that. But once we have it qualified, I think it’s quite obvious that we’ll be talking about expanding it to additional process nodes.
Marc: Right. What’s the timeline for qualification, you think?
Coby: You know, semiconductors as you know, this is a domain that works in long terms. We will start working with them now on transferring the technology. Once we finish doing that, we will go and manufacture the initial lots. And, you know, that takes months as well. And then we need to do the qualification, which takes months as well. So, to be realistic, you know, we’re talking about a process, you saw that with SkyWater, it took about two years. We hope to do it faster than that, but those are the order of magnitudes that we do. We will be working with their customers before qualification. I believe that, maybe unlike with SkyWater, that we didn’t manage to bring a customer before we actually qualified, we’ll be working hard to try to get customers on board in parallel to the qualification process.
Marc: And then, of course, the ever-recurring question about revenues. How would it play out with these guys in terms of, you know, the license fee, NRE, royalties, all that sort of thing? What can investors look forward to in the near term, so to speak?
Coby: The business model is like I presented many times before. We’re licensing the technology to DBH, and we’re transferring the technology to them. Obviously, they’ll be paying us for these things. We’ll be working with their customers, and licensing the technology to their customers. And we expect to get from their customers license fees and potential NREs. The big thing is the royalty at the end. So, we’ll be focused on the royalty moving forward.
Marc: Right. And I assume you’d be announcing when you sign deals with DBH customers, you’ll probably announce that as well, right? In terms of the deal itself, and what type of product, etc.
Coby: Well, you know, at a certain point you stop announcing every new customer. So, you know, we will be letting the market know about the bigger deals. You know, the first ones, we will be letting the market know over time when we’ll start having more and more customers. Obviously, we won’t be announcing every single one of them.
Marc: Right. I noticed that DBH also licensed Adesto’s technology, in 2018. Whatever happened to that deal?
Coby: Well, I think, as you know, Adesto was acquired by Dialog, which was acquired by Renesas. And Renesas had no interest in this technology. Eventually, GlobalFoundries acquired whatever was left of it. I believe that somewhere along the line that agreement with Dongbu was terminated. To the best of my knowledge, right now, Dongbu is 100% focused on rebuild.
Marc: And then for the remainder of 2023, you mentioned you expect maiden revenues as well in this year? Can you update us a little bit about that, what your expectations are there?
Coby: Well, like I said in the past, we do expect some initial revenues. They will be very small, they won’t be something significant. But it will still be an important milestone when you start getting first payments from customers, from foundries, and so on. So we are still expecting to get some initial small payments before the end of the year.
Marc: All right. Last question, Coby. When we last spoke, probably about a month ago, you mentioned that the possibility of signing another new deal in addition to DBH before the year is out. How confident are you that that will still happen?
Coby: We’re making good progress with several companies right now. You know, it’s always a tough negotiation, you know, and you need to answer more questions, and they have more requests, and so on. But I believe that we will have additional announcements before the end of the year.
Marc: All right. That’s good to hear. So, yeah, exciting few final months of the year then for you, Coby. That’s [Crosstalk 00:10:58.767].
Coby: There’s so much going on, there really is so much going on. I’m sure that this announcement with DBH will enable us to move forward faster. We are making good progress with some of the other foundries already. Foundries, IDMs, and with customers. So, there’s a lot of work going on behind the scenes. Obviously, we can’t report anything until we actually have a signed agreement. So right now it still is a lot of work in the background, but there’s a lot going on. And I really hope we’ll be able to start announcing more of these deals in the next several months.
Marc: All right. That will be a great Christmas present, Coby, for all shareholders.
Coby: Thank you.
Marc: All right. Thanks, Coby. Thanks for your time. Take care.
Coby: Okay, thank you.