Cguv,
In the post you quoted, there is some loss of patience showing.
I should have avoided that.
My intention is certainly not to create fear and uncertainty.
There are two schools of thought among the 4DS posters regarding the company.
- The first think that 4DS is really an independant company that happen to have a JDA with WDC.
- The second think that 4DS is not completely independant from WDC, but will be free in the near futur. That is what I beleive.
This two groups of opinion could easily agree to desagree.
We will know who is right when we reach the end of the story.
But, most importantly, saying that 4DS is not a fully independant company is nothing negative in itself.
To the contrary, I think this is very positive.
The way I see it, the 4DS board devised an absolutely brilliant strategy to reach their objective.
Instead of making a deal with some venture capital entity to rise 150 or 200 millions dollars (This is the amount of money you need if you want to developpe a new product in the semi conductor industry), They made a very clever deal with HGST.
- HGST will let them use their equipement and labs, and for that HGST will have the right to use - but not to license - what they developped together. And what is covered by this joint developpment is defined in "the scope of work" mentionned every year when they renew the JDA.
And also, HGST will have the right to buy a non exclusive licence at a lower price compared to what 4DS will ask to other parties to pay if the technology is succesful (there is no ambiguity in the prospectus about this last point, I'am affraid), plus the right to know if somebody want to buy or to finance the company.
So, HGST will have access to the technology at a very low cost compared to what they would have paid if they developped it internaly or bought a license to a third party.
And 4DS will have the right to ask for a patent for everything they jointly developped. Hence, all patents will be 100% owned by 4DS.
=> The right to produce for HGST and the right to licence for 4DS
- 4DS will pay the fees of the company and the salaries of its engineers. For that they listed the company and rised something like 50 or 60 millions USD (including the initial investment by JD and friends) since the creation of the company.
A realy small amount of money for such an ambitious project.
What are the main advantages of this business model ?
- 1 - 4DS scientists and ingineers are free to give full attention to the research programm. They dont have to look after everyday problems linked to the ownership of a complete research installation.
In fact, I believe that what they have to do to make the company run, is reduced to the minimum. All is probably externalised to lawyers and accountants.
- 2 - I think they work every day with HGST Engineers (At least for the part of the research programm that is covered by "the scope of work" defined in the JDA), and this should allow them to go faster.
- 3 - The technology is fully known and tested on a day to day basis by their industrial partner.
I beleive that the 4DS technology is curently beeing tested and adapted to the needs of WDC, in HGST Labs,or more probably in Sandisk labs in Japan.
The result of this is a very fast adoption by the industry and a time to market reduced to the minimum (that is if the technology works the way WDC wants it to work) -
With this kind of organisation, research and adaptation of the industrial process can be done in parrallel. And I think that's what is going on since at least the end of 2020
If we compare that with the normal way of doing things - A fully independant 4DS doing all the work alone at Imec and in their own lab - The path to industrialisation is much faster when the product is developped jointly with the industrial partner.
If the technology can be built the way WDC wants it to be build : as a low cost vertical ReRam ( not with an horizontal cross point array like Optane), the product could be on maket in less than two years. And it could be announced in less than six months.
From that moment the share price will change dramatically, as other companies will also want to buy the licence because they will see that the new WDC non-volatile memory works better thant what they have.
No need to convince people. The new WDC product will prove everything.
What would have been the time to market if a complete ousider did buy the company or the IP ?
Certainly much longuer.
If a newcommer buy the license, he will probably need six months, just to master the technology and have it fully accepted by its research team. After that they will have to adapt their industrial tools to produce the new memory.
I absolutely believe that this is the way things are organised between WDC and 4DS. Everything is in deep coherence with that.
And I have absolutely no doubt thats this is the best way to go if 4DS is to be successfull.
In fact, all considered, Its the only way to make it happen
... An certainly the less risky way for 4DS shareholders.
No Financial Advice.
Expand
