Pitt Research new valuation - $4.75Pivotal deal with SkyWater...

Pitt Research new valuation - $4.75

Pivotal deal with SkyWater Share Price: A$3.05Weebit Nano (ASX:WBT), developer of an emerging Non-Volatile Memory technology, called Resistive RAM (ReRAM),announced its first commercial deal with US-based foundrySkyWater Technology (NASDAQ:SKYT).ASX: WBTSector: Technology Hardware & Equipment20 September 2021Market Cap. (A$ m) 376.1# shares outstanding (m) 123.3# share fully diluted 171.5Market Cap Ful. Dil. (A$ m) 523.0Free Float 100%52-week high/low (A$) $4.50 / $0.69Average daily volume (x1,000) 1,143Website www.weebit-nano.comSource: Company, Pitt Street ResearchShare price (A$) and avg. daily volume (k, r.h.s.)Source: Refinitiv, Pitt Street ResearchValuation metricsValuation per share (A$) 4.75Source: Pitt Street ResearchAnalyst: Marc KennisTel: +61 (0)4 3483 [email protected]: Pitt Street Research directors ownshares in Weebit Nano Ltd.Broken through the vicious circleWe believe this deal will turn out to be pivotal for WBT giventhat the company has now broken out of a vicious circle typicalfor semiconductor development companies, i.e. manypotential customers for WBT’s ReRAM technology would havesaid that although the technology is extremely interesting,there was no fab where it could be manufactured. Similarly,foundries like SkyWater would have told WBT that while theylike the technology, there were no customers for it just yet.This circle has now been broken and the SkyWater deal opensup to path to revenue generation for WBT.Now the hard work startsOn the road to monetisation, WBT will now start with thetechnology transfer from Leti’s facilities to SkyWater’s fab andthe subsequent qualification process, which should take abouttwelve months. Once qualified, WBT’s ReRAM technology canbe sold commercially to SkyWater’s customers as well ascustomers referred to SkyWater by WBT. This should driveadditional license fees and, more importantly, recurringrevenues from royalties.We expect additional customers in the medium termAlthough it will be all hands on deck for WBT to work throughthe technology qualification process with SkyWater, webelieve the company will have the capacity to executemultiple onboarding programs simultaneously. In otherwords, we expect WBT’s commercialisation efforts tocontinue unabatedly, which may result in additionalcustomers in the next twelve months.Valuation of A$4.75 per share