Ann: Appendix 4D and 1H21 Financial Report, page-107

Brainchip closes H1 with revenue growth, US$8.4mloss as it eyes commercialisation for its Akida AI chip

Tech

1 hour ago | Emma Davies

Semiconductor company Brainchip(ASX:BRN) is set on commercialising its neuromorphic processor Akida, an artificial intelligence (AI) chip that essentially functions like a human brain.

Despite being in a pre-revenueR&D phase, shares in BRN rose from a post-pandemic low beneath 5c to highsof more than 90c last year, a move which attracted plenty of investorattention.

The company says its technology hasapplications across AI-driven autonomous devices like autonomous vehicles,internet-of-things (IoT) devices, drones, robotics, and in medical diagnostics.

And this month, Brainchip receivedthe first batch of AKD1000 production chips from supplier SocioNext America andafter testing and quality control.

Brainchip results

BRN said Akida could be commerciallyavailable as soon as October or November this year.

In the meantime, the company reportedhalf year revenues this morning of US$767,545.

Over the same period last year it waseffectively pre-revenue, booking $13,397 in what it described as “developmentservice revenue”

So on a comparative basis, that marksa healthy gain of 5,629%. Due largely to research & development costs, thecompany booked an operating loss of more than $8.4m. It finished the half-yearwith around US$17.6m in the bank.

Of the US$767,545 amount, Brainchipascribed US$412,500 of it to license revenue, with US$303,040 from developmentservice revenue and US$52,000 to product revenue.

Shares in Brainchip were tradingsteady just below 50c following its results announcement.

Akida uses less power and needs less bandwidth

Currently, the global semiconductorshortage is predicted topersist out to the middle of 2022.

Pitt Street Research analyst MarcKennis is bullish on the company, and says the Akida chip can learnautonomously, even when its already deployed in the field.

“It also improves the overallperformance of artificial intelligence (AI)-dominated systems by substantiallyreducing latency and power consumption,” he said.

“Additionally, given that Akida cando most of its processing on-chip rather than rely on data centres, there’s noneed for continuous internet connections.

“In other words, Akida helps solvethree big problems that today’s AI solutions struggle with all at once.

“Specifically, Akida needs no, ormuch lower, internet bandwidth, it uses substantially less power, and it takesedge computing to the next level through its much lower latency.”

Smart home products a US$135bn market

“Following the commercial launch, weexpect BRN, through its early access program, to attract some of the biggeststrategic names in the semiconductor industry as well as product end costumers,like electronics companies,” Kennis said.

Not only does Akida have potentialapplications in industrial, aerospace, defence, automotive, and health care –it also has potential in consumer goods or ‘smart products’, he added.

“The smart home market alone isexpected to be worth US$135bn by 2035,” Kennis said.

“Using Akida technology, businessescan leverage the power of neuromorphic computing to enhance the performance oftheir smart products by reducing latency, improving energy efficiency and allowingfor continuous, unsupervised learning.”

Licensing Akida IP

The company plans to license theAkida IP to customers, generating revenues from multiple sources:

• Non-recurring engineering (NRE) work related to specific integration needs;
• One-off licencing fees;
• Recurring royalties from each chip sold by the company’s customers; and
• Revenues from chip and module sales.