I went back and re read the TMT article on BRN back in May 2019. I know some if you don’t think much of TMT however I re read the SWOT analysis In this article.
https://static1.squarespace.com/static/5af533a312b13fb602fe7d7b/t/5cdbc6c824a694a8e46b5713/1557907167761/BrainChip+initiating+coverage+15+05+19.pdfCopy for the article.
Strengths• The Akida IP is unique in that it combines fast and low power Neuromorphic Processing with a targeted market price point that is expected to be well below similar technologies.• The asset-light IP licensing model should make for very high gross margins once sales of Akida IP ramp up.• BRN is already working with a large number of prospective Akida customers on the testing and integration of Akida NSoCs..
Weaknesses• The Akida IP has yet to be transferred into an actual chip. This transfer process may encounter setbacks, which would push out the timeframe for delivery of first sample chips, currently planned for the second half of 2019.• BRN will be competing with larger industry players that may be able to more easily fund IP development and run pilot projects with customers, which may inhibit BRN’s Akida commercialization process.• Given the average quarterly cash burn of US$ 1.7M in FY18, with US$ 10M in cash on the balance sheet per the end of the September quarter, BRN may need to raise additional capital to fund the company until it reaches cash flow break even, diluting current shareholders.• Capital restrictions may limit BRN in developing IP, in addition to what the company is already working on, potentially inhibiting future growth from new products
Opportunities• The market for Deep Learning chipsets is potentially very large with Tractica estimating a market size of US$ 66BN by 2025, compared to US$ 5BN today. This implies a CAGR of nearly 45%.• Additionally, most of the Deep Learning chips sold today are not dedicated Neuromorphic chips like Akida but general-purpose chips, such as GPU’s, tailored to perform certain tasks such as image recognition. Hence, we see a very large displacement potential in the Deep Learning chipset market for Akida
Threats• Global tensions around ownership and theft of semiconductor IP between the United States and China may result in Western semiconductor companies, including BRN, being restricted in the IP they are allowed to sell to Chinese companies. This would potentially restrict BRN’s growth in one of the world’s largest markets for semiconductors.• In generating revenues from its Neuromorphic System-on-a-Chip, BRN will be competing with some very large players, such as Intel that has acquired a number of companies similar to BRN in the last few years.
I’m focusing on the “weekness”, knowing BRN are now in production to produce the chip, and Now have funds to move forward, will start to see movement in pilot contracts.
Again, this is my own analysis. Happy to receive negative or positive responses.
Good luck to all long-term holders!
(20min delay)