Weebit Nano - Q2 FY20 Activities Update

29 January, 2020 - Weebit Nano Ltd (ASX: WBT) (“Weebit” or the “Company”) is pleased to provide the following operational update for the quarter ending 31 December 2019 (“Q2 FY20”), along with its Q2 FY20 Appendix 4C cash flow report.

Over Q2 FY20, Weebit Nano made significant progress on its path to commercialisation, improving the manufacturing efficiency of its silicon oxide (SiOx) ReRAM memory technology and achieving independent third-party technical verification by XTX Technology.

XTX Technology’s third-party verification was a significant milestone for the Company, achieved four months ahead of schedule. The two companies are now exploring ways to integrate Weebit’s ReRAM memory technology into XTX products.

Development work on the customised memory module for a potential first customer in South Korea continues, albeit at a slower pace than initially planned given Weebit’s focus on achieving third-party verification.

Coby Hanoch, CEO of Weebit Nano, said: “This was another significant quarter of progress for Weebit on its path to commercilaisation. Outside of a first customer contract, external technology verification is the most important milestone for a new memory technology company. In addition, the efficiency improvements achieved over the quarter mean our technology is more attractive to potential customers given reduced manufacturing costs and improved yields.

“Discussions with several potential semiconductor customers, technical partners and production facilities continue, and we are working to obtain first orders in 2020. The recent progress with XTX Technology strongly positions Weebit to target the discrete memory market”, said Mr Hanoch.

Successful technology verification by XTX Technology

During the quarter, Weebit Nano achieved arguably the most important commercialisation milestone apart from a customer agreement – external verification of its technology. Weebit’s silicon oxide ReRAM technology was successfully verified by Chinese memory solutions provider XTX Technology at its facility.

A joint team of Weebit and XTX engineers confirmed the industry-leading technical parameters of Weebit’s technology at XTX’s Shenzhen facility, reproducing results previously achieved with French development partner Leti. This external verification was accomplished four months ahead of schedule.

XTX provides Flash-based Non-Volatile Memory solutions to about 2,000 customers, including some of the world’s leading semiconductor companies. It is focused on discrete, stand-alone, memory chips (i.e. chips that contain only memory). While entry into the discrete memory market was originally planned at a later stage, the progress achieved with XTX has enabled Weebit to fast track this stream.

Mr Hanoch said: “Independent technology validation, particularly by a potential customer, is a very important milestone on the path to commercialisation. In the case of XTX, they have expressed strong interest in our technology for the discrete memory market and have allocated time and resources to test and validate it.

“Discrete memory chips contain larger memory arrays and are more technically challenging than embedded modules, requiring additional development work before reaching productisation. With XTX, we have now identified what those developments are, and are now defining with XTX how to create a memory product that meets the needs of their customers. It should be noted that these
developments are not unique for XTX and will allow Weebit to address the very large Non-Volatile Memory market once they are available.”

Leti confirms manufacturing efficiency improvements

Weebit improved its manufacturing efficiency during the quarter, continuing to fine-tune the production processes.
Testing conducted by research partner Leti confirmed Weebit arrays can be manufactured for embedded memory applications using just one or two added masks, compared to the 7 to 10 additional masks normally required for current Flash memory. Mask sets in geometries below 28nm can cost millions of dollars, so reduced mask rates significantly lower manufacturing costs.
Leti also confirmed Weebit’s novel methodologies can improve production yield by reducing device malfunctions, thereby increasing the profitability of each device.

“These efficiency improvements are very important for potential customers as well as the future profitability of Weebit’s ReRAM memory technology. Achieving lower-cost manufacturability using a smaller number of masks can reduce manufacturing costs for our customers by millions of dollars, and make Weebit’s technology even more attractive for them.”

Three new patents filed

As a result of the progress made with Leti, Weebit strengthened its intellectual property during Q2 FY20, filing three new joint patents. These patents use newly developed smart algorithms to increase the reliability and yield of ReRAM memory cells and enable scalable ReRAM process improvements.

Two of these patents identify failure modes, in which optimised smart programming algorithms then improve the window margin and array yield. The third patent improves process flows, allowing increased stability at scaled memory cells in geometries of 40nm and below. 

Weebit filed a total of five joint patents with Leti in 2019 as well as one sole patent. According to the agreement with Leti, only Weebit can commercialise the joint patents.

Memory module development

Weebit continues to adapt its SiOx ReRAM technology to meet the memory module requirements of a Tier-2 South Korean potential first customer. This development work on the customised memory continued over the quarter, albeit at a slower pace than initially planned, given Weebit’s focus on achieving external verification of its technology. This means that the mid-year timeframe for the completion of the memory module will likely be pushed out by around four months.

Developing a working memory module is an essential component on the path to productisation and commercialisation of embedded memory IP modules, enabling Weebit’s technology to interact with the rest of the design in a potential customer’s product.

While each design has its own specific module requirements, such as size, shape and number of read/write ports, this initial memory module is being built in a configurable manner so it can later be adapted to the requirements of other projects much faster. It is anticipated that after the first few projects Weebit will be able to automate this process and develop a “Memory Compiler” which can generate future modules almost automatically.

Alongside this development work, Weebit Nano continues to engage and progress discussions with other potential customers and partners.

Looking ahead

Weebit remains focused on productising its technology, securing first orders and achieving revenues.

The work with XTX provides a unique opportunity for Weebit to move into the discrete memory chip market, identifying the needed developments required to productise its technology in this market. Weebit believes it can significantly accelerate entry into this market and is now exploring ways to implement these required developments, given the huge market opportunity this segment represents. Weebit and XTX are currently discussing the next steps of their co-operation.

In parallel to the work on the discrete memory chip technology, Weebit is continuing the development of the memory module for the embedded market and plans to have it available before the end of 2020.

The progress in both the discrete memory and in the embedded memory solutions enables Weebit to progress with multiple commercial discussions with potential customers and Weebit is aiming to achieve first orders in 2020.

In partnership with Leti, Weebit will continue to improve its technical parameters and manufacturing processes, ensuring its technology yields the most profitable results in production. The Company is on track to transfer its technology to a production fab by December 2020.