I think EM has paid for the development of its own facilities that are currently being used to develop AP's chip. I doubt if they are simply paying for the privilege of partnering with AP, that would be unreasonable. The commercial arrangements are undoubtedly expected to be profitable for both parties. EM recognises the importance of AP's chip, and appears to have bent over backwards to make everything happen as AP needs, going the extra mile to boot. I have no idea what the delays to date represent, but who knows, it could be that wafers have been restarted from scratch at least once given the time frame apparently now involved in doing so. The delay could account for some of that. I dare say that if the build quality has not been up to necessary standard then EM would probably expect to pay for some or all of the costs to get the quality to where it should be. The most recent comments about the abundance of "precautionary measures" suggests that every step in the process is being checked for achievement of targets and specs before proceeding to the next step.
"... As has been announced, the company’s next significant milestone is the receipt and characterization of MEMS GEN-II chips, delivery of which has been incrementally updated by the vendor, now stated to be mid to late September. The roughly 3-week deviation from their prior projected delivery date (late August 2023, as previously announced to the market), is predominantly attributed to the cumulative precautionary measures the company and vendor have taken to characterize and optimize critical fabrication process steps associated with a first run of our MEMS-GEN-II wafers / chips. ..."
This reminds me of earlier developments at TowerJazz when sub sets of wafers were being advanced through the next stages to confirm performance criteria were being met by the process before committing the whole set of wafers to that process. This allowed tuning the process in real time. The idea there being that while you might waste a few wafers in the process, it gave you the ability to ensure you had optimally tuned the process properly before subjecting the whole wafer batch to each step of the process. I dare say that is exactly what is being done here.
But while there have clearly been a number delays, these causes are unlikely to have been just 'smokescreens for slackness' on anybody's part. They probably represent entirely different problems and therefore causes for delays being encountered and dealt with in turn.
I am assuming therefore that, in the classic 'boy cried wolf' scenario, everybody interested in AKP's progress will be profoundly shocked when AP actually announces a finished chip that performs exactly as promised. As Fred said in preface to the May AGM:
"... Let me start by thanking our shareholders for their patience supporting the massive undertaking to revolutionize the multibillion-dollar sound reproduction industry. Given our recent accomplishments, I am increasingly optimistic that your patience will be rewarded many times over. ..."
I have to admit that Fred has certainly had the optimism, and of course while he has been party to all of the nitty gritty of the chip development and commercial negotiations, so he knows exactly what has been happening, why it is happening, and what can be realistically expected to happen next, he has certainly had the conviction to put his own money where his mouth is. He also clearly expects to be rewarded many time over. And that has to be fair enough. Hats off to Fred and to all the team at AudioPixels.
Roll on mid to late September when that announcement surfaces!
(20min delay)