Dang!
Bad news, but in my estimation this is not as bad as it could be. This announcement signals a delay, not a disaster.
This for me is the crucial comment:
"The company has identified the root cause for the voltage gap and has implemented a relatively simple design modification that will bring the device back into specification without disrupting the fabrication process flow. In accordance with industry convention the company withheld batches of wafers at various stages of Phase 4 fabrication, specifically to deal with such unpredictable variances. The company has instructed its fab to urgently advance the backup wafer lots with the inclusion of the design change."
The decision to hold back wafers until every detail proved fully functional was commendably prudent, and clearly quite prescient. AP claims that there is a way to fix the unanticipated problem, and AP has ensured this can still be implemented. This is probably not the way that less savvy companies with plenty of cash would have done things, but as AP has said in the past, being prudent and poor has worked in our favour here.
The follow on comment is also clear:
"The company plans to further update the market when the fabs return from holiday break with detailed timelines."
This indicates that we are not going to be left in the dark for an indeterminate period. In the face of precious little information from the company in the past this is a most welcome statement. This suggests that we are likely to get some update within the next 2-3 weeks, and this should give us a better idea of when the "fixed" version will be produced.
We need to remember that the MEMS device itself - the business end of the development - has been made to work already. The testing that has been done already had to have been done using some kind of a test bed that emulated the ASIC using its own interconnections. In this setup the MEMS obviously worked well enough, or it would not have been used to develop the current ASIC.
So this says to me that this is simply a disappointing delay; a frustration that is more painful because we are all strung out waiting for the denouement of the finished chip.
Management will no doubt be even more frustrated than most other investors - largely because they have far more cash at stake than most of us have. But they also are likely to have given plenty of reassurances to prospective customers under NDA's that will now be causing them some embarrassment.
(20min delay)