Running discussion on SP, page-4876

I asked this question yesterday at the meeting. There had been an ongoing lack of understanding from the community about how long this process is going to take. Having this clarified at leasts has everyone with a clear udnerstanding of timeframes.

From the meeting yesterday we can assume the following:

• Skywater fab customer this year- up front NRE and licensing fees. 18-24 months design and qualification- first royalty fees mid-late 2025.
• Tier 1 fab this year- Assuming it is GF we have already done a lot of the design work so likely shorter qualification perdiod- 12-18 months- Qualified early 2025.
• Further customers and fabs to be signed over 2024- NRE and licensing fees in 2024, royalty revenues in 2026
• Discreet NORFlash solution looks like it will be progressed in 2024. This is a different business model but looks like it might be up and running in 2026.
• 2027 should see us with multiple royalty income streams and potentially a discreet NOR flash revenue stream with a clear pipeline to NAND flash discreet solutions.

I'll also note that Coby clarified the addressable market in that question yesterday. If the market is $1 billion and we took it all, the royalty payments would be 1-3% of that 1 billion- so 10-30 million per year.

Given the above, and assuming we sign + 5 more customers each year (5 new customers first year, 10 second year - which i think is very conservative) from 2024. I see the revenue stream looking like the below

Calendar years
2023- 1 customer signed- NRE payment of $500k, Licensing fee (unknown currently)- Total $500k
2024- a further 5 customers signed with $500k NRE payments - $2.5 Million
2025- First royalties- likely a very small portion of addressable market ($<100k),
10 NRE payments- $5 million
Total= $5 million
2026- Royalties now from 6+ products (likely <$500k).
These customers require the solution for multiple SoCs which significantly increases NREs (20 NRE payments) -
Total $10.5 Million
2027- 25-30 NRE payments (this will require a significant increase in staff)
Royalties now coming from 10-15 products ($ 1mill)-
First Discreet NOR sales (<$100k)
Total = $16 Mill
2028- 25-30 NRE payments,
Increased discreet NOR sales (app. $500k)
Royalties now coming in from > 40 products (I have no idea if this matches the approximate quarter penetration Coby mentioned) for around $3 million in royalties.
At this point we should be progressing
Total = approx $20 Million

From 2028 onwards I think the company will start running away- particularly if we have developed the NAND flash replacement. Revenues will quickly escalate at that point.

There are wild assumptions in the above- but I'd love to hear everyone's counter arguments. Obvioulsy in the first 2 years the PE will be ridiculous, but I think that is reasonable considering the possible addressable market in 2028 onwards could be enormous. I also believe that the signing of a Tier 1 and first customer is a strong rationale for price appreciation as it is the final risk removed from the forward projections. My personal belief is that after those announcements run it will retirn to the $5-6 ($1 billion) mark which is a reaonable balance between future potential and lack of immediate revenue. Others will have differing opinions which is the beauty of the market. I took pretty considered notes at the meeting yesterday and will look to share these in the evening when I have time.

Best of luck everyone. And please counter this post as much as you like. It's a helpful learning proces for me.