Weebit Nano - Q3 FY20 Activities Update

29 April, 2020 – Weebit Nano Ltd (ASX: WBT, Weebit or Company) is pleased to provide the following operational update for the quarter ending 31 March 2020 (Q3 FY20), along with its Appendix 4C cash flow report.

During the quarter, Weebit Nano further progressed its commercialisation activities, which included initiating a new development program with Leti for the standalone memory market, signing a Letter of Intent for a partnership with Chinese semiconductor company SiEn (QingDao) Integrated Circuits Co., Ltd. (“SiEn”) focusing on the embedded memory market, and the release of a new ReRAM Silvaco simulation model.

New development program with Leti to address the standalone memory market

In February, Weebit Nano commenced a new development program with its French research partner, Leti, to accelerate its entry into the standalone (or discrete) memory chip market. This three-stage program broadens Weebit’s development scope with Leti beyond the embedded nonvolatile memory market and follows the successful external verification of its silicon oxide ReRAM
technology by XTX Technology last quarter.

As standalone memory chips have larger memory arrays, they require a smaller more sophisticated ‘selector’ to isolate memory cells. This enables writing only to the specific cells needed, without impacting other cells. Leti has been developing a selector for this market for several years and will enable Weebit to significantly fast-track its development of a standalone memory chip.

Coby Hanoch, CEO of Weebit Nano, said, “While we are focused on delivering the memory module to the embedded market, we had a unique opportunity to leapfrog our standalone memory development, enabling us to address this market sooner than we planned. This segment provides significant long-term growth opportunities for the Company.

“The ‘selector’ in standalone memory chips is technically much more challenging than the one used in embedded modules and is a critical element for this market. Our increased partnership with Leti will save us years of development time and significant costs, allowing us to reach productisation within the standalone market significantly faster than anticipated.

“There is strong interest in our ReRAM technology from potential customers and partners, including XTX Technology, who recently validated our technology. They are looking to integrate next generation memory technology into their products, and we are now working with them to identify the next stages of development.”

Weebit initially aimed to demonstrate the ReRAM cell for the standalone memory market by mid2021. This is now being extended by three months due to the temporary shutdown of Leti as part of COVID-19 containment measures in France. The next two stages over 12 months will lead to a demonstration of Weebit’s ReRAM cell working with the selector. Weebit will be working with Leti to find ways to make up for some of the delay.

Letter of Intent with SiEn for the embedded market

Weebit signed a Letter of Intent with Chinese semiconductor company SiEn (QingDao) Integrated Circuits Co. (SiEn) to investigate the use of Weebit’s ReRAM technology in products manufactured by SiEn.

SiEn is a second key player interested in Weebit’s technology for the embedded market, alongside the potential South Korean customer. Based on a Communal Integrated Device Manufacturer (CIDM) model, SiEn aggregates companies with similar target markets, technologies, production lines and customers to share common manufacturing technology production goals.

SiEn will finish constructing two fabs of 200mm and 300mm wafers this year, bringing together design and fabrication processes. Weebit’s ReRAM technology would add significant non-volatile memory (NVM) capability to SiEn’s products.

The SiEn production line is based on technology similar to Leti’s. This will simplify the transfer of Weebit’s technology and is expected to reduce the time required to bring products to market. Weebit believes that this will enable it to progress to production
even faster than with the Korean partner.

SiEn was established by industry luminary Dr Richard Chang, known as the ‘father of the Chinese semiconductor, and founder of China-based Semiconductor Manufacturing International Corporation (SMIC) as well as Taiwan’s Worldwide Semiconductor
Manufacturing Corp (WSMC, acquired by TSMC).

The collaboration agreements in place with SiEn and XTX Technology reflect the high level of interest Weebit’s technology is receiving from Chinese companies, further enhanced by China’s strong desire to grow its semiconductor industry.

Resources for development of the embedded memory module were temporarily reallocated while the Company dedicated resources to external validation activities with XTX technology for the standalone market (previously announced in Q4 2019). However, development of the memory module remains a key priority for Weebit with a first commercial or strategic agreement likely before the end of the calendar year, despite delays brought about by COVID-19 forced shutdowns.

New ReRAM simulator model available via Silvaco partnership

Weebit improved the ability for its ReRAM modules to be incorporated into advanced semiconductor designs for the standalone and embedded memory chip markets, with the release of Silvaco’s advanced Technology Computer-Aided Design (TCAD) solution, Victory Device. This new simulation model analyses the electrical, optical, chemical, and thermal behaviour of Weebit’s silicon oxide ReRAM devices.

Victory Device’s physics-based simulations dramatically speed up and simplify the transfer of Weebit’s technology to production fabs through the elimination of expensive and time-consuming experimental wafers.

In addition, it enables Original Equipment Manufacturers (OEM) to more efficiently embed ReRAM technology in their designs, leading to shorter product development schedules and reduced technology testing stages.

“The newly developed TCAD model with Silvaco enables potential customers to fast-track the development and release of their next-generation products, and fab partners to adapt Weebit’s technology, without expensive and time-consuming development and testing runs in fabrication.”

ISSCC 2020 Technology Innovation Award for neuromorphic demo

In February Weebit received the ISSCC Technology Innovation Award for its brain-inspired SPIRIT neuromorphic demo which was showcased at the International Solid-State Circuit Conference (ISSCC) 2020 in San Francisco.

Developed in cooperation with CEA-Leti, the SPIRIT neuromorphic demo uses Weebit’s silicon oxide ReRAM technology to run inference tasks using CEA-Leti’s Spiking Neural Network (SNN) algorithms, implementing synapses in a way that mimics human biological synapse activity. ReRAM significantly improves the energy efficiency of the Ai computing process.

Weebit presented the demo as part of the event’s Industry Showcase, alongside other selected companies such as Intel, Samsung, IBM, AMD, Alibaba and Texas Instruments.

€867k received for French R&D incentive

€867,974 cash in relation to the French Government’s R&D incentive, was received after quarter end for R&D work carried out in France during 2019. This equates to approx. A$1.45 million.

Looking ahead

Despite challenging operating conditions globally, Weebit remains focused on productisation and is continuing to push for a first commercial or strategic agreement before the end of 2020.

As a result of the French Government’s country-wide shut down due to coronavirus, Weebit’s development work with its research partner Leti in France has temporarily paused. At this point it seems like the total down time will be around 3 months, resulting in a 3-month delay in Weebit’s development schedule. Weebit will update the market once it is clear what the final impact is, and is
looking for ways to minimise this impact.

Development work in China slowed dramatically in the quarter, delaying some of the activities with Weebit’s Chinese partners, however China is now returning to normal and Weebit is now making good development progress with both XTX Technology for the standalone market and SiEn for the embedded market.

To mitigate the impacts of COVID-19, Weebit has implemented measures to reduce operating expenses, including Directors not drawing salaries, a travel-freeze and employee salary cuts.

“We continue to engage and advance discussions with potential customers and partners in both the embedded and standalone memory chip markets. Whilst progress in the semiconductor space can be slow by most people’s standards, Weebit is making great progress on both the technical and commercial sides. The memory module and the selector projects are two critical development pieces we are excitedly working towards on the technical side, and on the commercial side we are in intensive discussions with both SiEn and XTX.

“While COVID-19 has presented a challenge for us in the short term, including delays to development work, we are working on mitigating the impact of shutdowns as much as possible and are progressing as best we can. We remain confident in the progress we are achieving, and in Weebit’s ability to address the growing demand for new memory technologies.”

This announcement has been authorised for release by the Board.