Archer Materials (ASX:AXE) has garnished significant investor attention as ASX’s only quantum computing stock. It has been a rollercoaster ride for investors in the company, riding any perceived wins the company achieves but worrying when it is perceived the company (or the industry) has suffered a setback.
The reality is that development of such comprehensive technological devices is that it takes time, especially when the specific technology is at a nascent stage. However, the company has made significant progress of late.
Recap of Archer – the ASX’s only quantum computing stock
Archer is developing two technologies – 12CQ and Biochip. 12CQ is a carbon-based quantum bit (qubit) semiconductor technology. Once fully developed, the technology may potentially enable quantum devices that process quantum information in mobile technology and be accessible to a more broader population than today.
Biochip is a Lab-on-a-Chip technology being developed to enable rapid, parallelised detection of diseases. It would allow droplets of biological specimens to be analysed and processed using graphene sensors.
Investors curious for further detail on how these technologies work should read the research reports on Archer Materials from out parent company Pitt Street Research here.
Archer Materials’ achievements in 2024
We’re only half way through 2024, but it has been a year full of achievements. In March 2024, the company designed a miniaturised version of Biochip for fabrication at a commercial foundry – from 10mm to 1.5mm. This is big because it demonstratds Archer’s expertise, in being able to scale down chips so substantially while not just maintaining but enhancing performance – something that is not easy to do in a non-cost-prohibitive way.
Also in March 2024, developing a pulsed electron spin resonance (p-ESR) spectrometer on chip with its research partner EPFL (École Polytechnique Fédérale de Lausanne) based in Switzerland. The big deal about this is that such a chip could detect and analyse the behaviour of unpaired electrons, by measuring ESR parameters such as spin-spin relaxation time and spin-lattice relaxation time. These are important parameters for determining the time-window for processing electron spin information in solid-state quantum electronic devices. Archer intends to use the p-ESR microsystem to perform complex measurements involving the potential electron spin manipulation of Archer’s 12CQ quantum materials.
In June, the company revealed the results of its Biochip designs with external foundry partners, and it was a complete success. The fabrication produced 145 chips with 8gFET devices on each chip.
But didn’t Archer Materials miss out on a $940m investment?
Many investors would be disappointed when they heard media headlines that the government was investing in PsiQuantum. Arguably, they thought the investment meant Archer was behind PsiQuantum, and perhaps some of its peers. This is not the case – all quantum players are at an R&D phase and are at least a few years away form commercialisation. Even companies like Microsoft and IBM, with established businesses, are still at an R&D phase with quantum.
Although the optics may appear to be a bet in PsiQuantum, this was part of the government’s budget to aid the quantum industry, and we expect the benefits to flow through to Archer, as well as its peers. As part of the deal, PsiQuantum will establish a quantum innovation precinct, invest in university and research collaborations, as well as to create a dedicated climate research centre. Investors may not realise that even though Archer employs its own staff, it is reliant on external facilities – like the Nanoscience Hub at the University of Sydney – for research.
Slow and steady will prevail
The reality with technology companies like Archer at an R&D phase is that it is a slow and measured grind. Development of 12CQ and Biochip will occur gradually over the rest of the decade, and commercialisation of any quantum devices is at least 5-7 years. The ‘investment’ will reap benefits for Archer and the broader industry.
Investors in companies like Archer need to be patient and look past short-term headlines. Even though it is too early to ascribe any valuation onto Archer, we think those with patience could be rewarded in the years to come.
