Thought I would do this for the newbies 4DS seems to be attracting lately (probably being attracted off the 'successes' of BRN and WBT).
TL;DR4DS is producing a new type of memory semiconductor and once they proof the prototype in the first half of 2021 the company will be sold to the highest bidder.
Potential interested buyers are; Western Digital, Intel, Sk Hynix, SMIC, Kioxia, Samsung, etc.
What is 4DS and what is the value proposition? 4DS is an R&D semiconductor company whose sole focus is to produce a next generation memory technology called ReRAM (sometimes called RRAM).
The value comes by solving for the gap between memory and storage.
There is a "hierarchy" of computer hardware memory and storage. See image below.
Right now SCM or storage class memory does not exist (well... there is 1 product in the entire world, Intel's Optane products).
So as you can see, if you remove the 'SCM' layer out of the hierarchy, as is the case today, then you have a gap in speeds between DRAM and NVM (non volatile memory, eg: SSD's/ NAND flash storage like your USB memory stick).
This order of magnitude speed gap is the problem 4DS is trying to solve (and a bunch of other R&D companies).
Global enterprises are increasingly looking for solutions that fill this gap.
This is why it is valuable.
SCM is also inevitable, meaning it will exist one day... obviously the hope is 4DS achieves one of the first SCM solutions and secures a good market share.
Why is DRAM not enough? Why is NVM (or NAND flash memory) not enough?This is why...
| Feature | DRAM | NAND Flash | 4DS ReRAM (a type of SCM, Storage Class Memory) |
|---|
| 1 | Speed
ie: how fast is it? | Superb. See image below.. like 10 to 100 nanoseconds. | Very Poor. Thousand/s of times slower than DRAM. | Superb. Without providing specific quantifiable data, 4DS has indicated that they are "close" to DRAM speeds.
(Link - see ann 13 June 2017)
They have reiterated many times since this original ann. |
|---|
| 2 | Retention
ie: how long can it hold data before corruption | Very Poor. Like 60 milli seconds and requires constant power. | Superb. Like 10 years and without power. | Great. Hopefully as good as NAND. 4DS is keeping this detail secret between themselves, imec & Western Digital. |
|---|
| 3 | Endurance
ie: how many times can you read and write over it | 10^15 | Eff all. Less than 10^4 | 10^7
(Link - see ann 20 June 2019)
A year later they reported endurance 2X to 3X more than what they previously reported at 10^7
(Link - see ann 24 June 2020) |
|---|
| 4 | Cost to produce | Bloody expensive. | Cheap as chips. | Somewhere in between |
|---|
Who is imec? And what's the deal with Western Digital?imec is the world's premier nanotechnology research and development facility located in Leuven, Belgium.
All the industry players work with imec, who exists soley to contract their expertise to R&D efforts undertaken by private enterprise.
4DS has been working with imec since 2018.
4DS has a joint development agreement (JDA) with HGST, who is a subsidiary of Western Digital.
This JDA is in its 7th consecutive year... yes, it takes a bloody long time to develop new technology.
The JDA does not guarantee the sale of 4DS to Western Digital, another buyer could outbid them, but given the working history together.... WD is the natural acquirer.
How much will they sell the company for?
A lot.
That is the hope. There are clues.
The annual DRAM market is $95B USD.
The annual Flash market is $56B USD
The directors are taking part in a Sales Bonus scheme.
This scheme is a rolling scale starting at a low ball $120M USD company sale.
This means that directors will receive no bonus under $120M USD. Which is about 13 cents per share.
In turn this means that it is extremely unlikely that they directors will even consider a buyout price less than this.
The top bracket starts at $550M USD. Which is about 60 cents per share.
The more the directors sell the company for, the bigger their bonus.
So obviously they are incentivised to sell for as much as possible.
Each director also owns shares - so they are additionally motivated from that end too.
The largest shareholder is non-executive director Jim Dorian, who will be stepping down as chairman to make way for new company director and chairman Drs. Wilber Van der Hoek.
Who would want to buy 4DS if they successfully proof the prototype 1Mb chip?
Western Digital (market cap $13B USD)
Intel (market cap $227B USD)
SK Hynix (market cap $227B USD)
Kioxia (market cap $13B USD)
SMIC (market cap $33B USD)
Samsung (market cap $360B USD)
others...
Memory storage hierarchy
4DS is trying to fill the SCM layer, for which today there is only 1 product in the entire world, this is Intels Optane product.
Other good summary research over at Pitt Street Research / TMT Analytics, but here is a good video - old but relevant.
https://www.pittstreetresearch.com/4ds-memory
(20min delay)