Disrupting The Memory Industry

I'll start by saying that I believe Weebit is on the right path to becoming a dominant industry player. It's a high-risk, long-term investment but this end of the market is more or less venture capitalism where it may take years to find out if your investment thesis was correct or not. The evidence that Weebit is likely to succeed is already there in the disk-drive (now Flash) Industry and the pattern repeats itself in many other industries that have been disrupted.

First of all, no, Weebit doesn't have a Tier-1 partnership but I think Coby is honest and accurate when he says that it's better to partner with Tier-2 companies to begin with. The book I'll be referring to is called 'The Innovators Dilemma by Clayton M. Christensen' and it's an in-depth look into why large company's fail and how industry entrants emerge. I'll provide a link to the book at the end. Edit: I can't find a link to the book but I recommend reading it 100%).

The book is rich is wisdom, history and facts, and it's well-researched. I'll cover three industries, as best I can, where disruptive technologies have successfully overthrown industry incumbents.
1. Disk-Drive Industry or Non-Volatile Memory (NVM) Industry
2. Minimill steelmaking disrupting the Integrated Steel Makers, and
3. Hydraulic Excavators disrupting the Mechanical Excavator Industry

Also, note that disruptive technologies are different from technological improvements of existing technologies, called Sustaining technologies)

Non-volatile Memory Industry
Essentially, one of the key themes of successful disruptive technologies is that they begin in new markets or at the low-margin, low-end of the industry and eventually move up-market towards higher-profit, mainstream markets. Currently, flash is still scaling down and stacking but it appears to only be by brute force of engineering acumen and resources. This can't keep up much longer.

The first picture here states that when improvements are made to existing tech (i.e. Flash) the industry incumbents are always the winners.


So there's no point in Weebit competing with Flash right now. Not when you can buy a 2 Tb USB drive and we have a 1 Mb prototype chip. HOWEVER, these industry leaders struggle to combat disruptive technologies.

The evidence is in the disk-drive industry, the 8 inch disk-drives were successfully disrupted by 5.25 inch disk drives, 5.25 inch disk drives were disrupted by 3.5 inch disk drives, the 3.5 inch disk drives were disrupted by 1.8 inch disk drives and Flash technology disrupted the disk-drive industry all together. This chart shows the successfully industry players after each disruption, categorizing them as Entrant firms (disruptors) and Established firms (Incumbents).



Now were these disrupting technologies competitive with the existing technologies? Nope, not even close. In fact, they were generally more technologically straight-forward (e.g. Weebits SiOx ReRAM) and they didn't address the needs of the leading edge of technology. Have a look here:


So who often leads and succeeds in bringing disruptive technologies to market?

As it turns out, employees from existing firms who can see that the incumbent technologies are ready to become superseded.

So who does Weebit Nano have on the board from existing firms?

1. David (Dadi) Perlmutter - Former Executive Vice President and General Manager of Intel Architectural Group and Chief Product Officer of Intel Corporation.
2. Dr. Yoav Nissan Cohen - Led the creation of Tower Semiconductor and was the CEO for nearly 10 years. (2018 Revenue: 1.3 billion USD), Co-founded Saifun Semiconductor
3. Atiq Raza - Chairman and CEO of NextGen Inc for 7.5 years, became president and COO of Advanced Micro Devices (AMD) after NextGen was acquired by AMD.
4. Coby Hanoch - 40 years in the Semiconductor Industry and 2 successful exits. Multiple CEO roles.

(Reference: Slides 4-5 of https://weebit-nano.com/wp-content/uploads/2019/07/1949527.pdf)


These entrant firms move up-market faster than the incumbent firms can improve their leading edge technologies and over the years, once a revenue stream is established, they begin dominating the lower end of the market and attacking higher-markets as their disruptive technology adopts sustaining improvements at a rapid pace. The result is that the entrant firms end up with ever-increasing profit margins as they move up-market because their technology is already cost-effective to be competitive in low-margin environments.



The next image is a summary of the three patterns that repeat not only in the NVM industry but in multiple industries that are disrupted. My take from this is;
Competing with flash = Weebit won't win.
Competing with Embedded Memory = Weebit will win.


So this post has actually become quite long. If anyone would like, let me know and I can post again in the next few days discussing the Minimill Steelmakers and the Hydraulic Excavators. Other examples where these patterns apply are obviously Tesla, SpaceX and even our own Aussie grown ASX-listed company Audinate.