The sell-off of US chip makers is backward-looking.
The market is fickle. It may be perceived that the established tier1 players will not be capable of turning a profit when there is a slump in demand, yet, it doesn’t seem to take into consideration that a massive transition has already taken place, we just can’t see the long term affects of it as yet – like the, introduced US laws (CHIPS and Science Act) and other stimuluses that aim to strengthen domestic supply chains.
However, taking a broad brushstroke view to any sector particularly one that’s heavily reliant on Research & Development for their success is short-sighted. Nevertheless, timing is everything and in this transitional phase, Archer could emerge (if it hasn’t within closed-doors) as a ‘clean face’ sovereign-trusted friend with no baggage. Provided they can keep proving their tech and diversify, it could underpin the next generation of transportable/mobile semi-conductor environment throughout the coming decades. In other words, it will enhance the semi-conductor growth story going forward as we leave the old one behind. So, it is most likely that any tech stock that dosen't embrace room-temperature technology will be slower to emerge once market fears are normalised, not the sector as a whole.
Regardless of the macro economic situation, markets are going to be hesitant and unsure who the likely winners will be. IMO, Archer’s role is assured (derisked) by the more tier1 parties we engage with to integrate the IP technology. This could mean that any further SP downturn will be short-lived and most likely lack sustainable volumes.
Furthermore, in the latest annual report, Chairman, Greg English stated that, ‘The biochip and the quantum computer chip are advanced semiconductor devices that share many of the same laboratory facilities and people. The biochip development complements the 12CQ Project work while allowing the Company to diversify risk.’ (page4). Therefore, I’d suggest that any synergies between the two could follow as @2105 has suggested, further enhancing the pace of news flow over the coming weeks and into the new year.
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