I think we have to look at the reasons why a CR to pay for Infineon. Why the need for Infineon at all?
The answer is that the area-based capabilities are an important differentiator that (if we trust the "unique" label) no one else in the ReRAM sector will be able to achieve.
By demonstrating that the capability can be unlocked by Infineon, it will increase the company valuation at time of sale. Even if the work is in progress, it provides a good negotiation tool to allow the BOD to push for higher acquisition price.
So is the 12% dilution (~220m shares) going to be met with a commensurate increase in enterprise valuation at sale time. Is the juice worth the squeeze?
i've got three scenarios with a little help from generative AI (I prompted about market share, disruption and for valuations regarding being sold to an existing memory sector player where these capabilities would be complimentary e.g. Samsung, NVIDIA, SK Hynix, TSMC)
PHASE 2 - imec scales platform lots to 20nm (baseline scenario)
Assumptions: 4DS successfully demonstrates the viability of their 20nm memory cell array, meeting performance and power targets for high-performance computing applications.
Market relevance: increased confidence in the technology and its potential to disrupt niche segments of the High Performance Computing market.
Valuation: US$500m to US$1.5bn
PHASE 3 : Infineon unlocks Area-Based Configuration
Assumptions: In addition to 20nm scaling, 4DS enables area-based configuration of their ReRAM memory. This allows for dynamic adjustment of memory characteristics (e.g., resistance, conductance) within the array, enabling new applications like in-memory computing and neuromorphic computing.
Market relevance: Area-based configuration opens up entirely new markets and applications, making ReRAM a more versatile and valuable technology.
Valuation: US$2 billion to US$5 billion
POSSIBLE PHASE 4: Analogue Programming
Assumptions: Building upon area-based configuration, 4DS achieves analog programming capabilities. This allows for fine-grained control over the resistance states of individual memory cells, enabling applications like analog signal processing, AI accelerators, and even neuromorphic computing that more closely mimics biological neural networks.
Market relevance: Analog programming unlocks a vast array of new applications and positions ReRAM as a foundational technology for future computing architectures.
Valuation: US$5 billion to US$10 billion (or even higher)
So, according to that if Infineon unlocks area based capabilities, valuation could increase by 400% to 1000%. This is obviously much greater than the 12% dilution. So yes - Juice worth the squeeze.
So one could argue is in the best interests of shareholders. While the timings have changed, I don't think it is likely you could get a better return in (max) 15 months.
i would say this - until there is an offer at hand there can be no guarantee of when (or even if) a takeover will occur.
Personally I'm ok with this, my investment here was always a life changing bet... could lose the lot or retire in my 40s.
(20min delay)