4DS Memory (ASX: 4DS) – Strong test results from latest wafer batch

Article written by Pitt Street Research. For the full report click here

Interface Switching ReRAM further de-risked

On 20 February 2019 4DS Memory Ltd (ASX:4DS) announced that it had analysed a batch of 23 functional 300mm wafers the company received from its development partner imec.

Endurance analysis of the wafer with the best characteristics in this batch (wafer D17) showed that the number of times 4DS’ Interface SwitchingReRAM technology can be switched runs “into the millions of cycles”.  In other words, the company’s individual memory cells can be switched many more times than will be required in commercial settings, such as data centres.

Additionally, 4DS indicated that retention analysis had shown the best retention results to date on wafers manufactured outside of thecompany’s own facilities.

Why are these test results so important?

In evaluating 4DS’ technology, potential licensees or acquirers of the technology focus on four key metrics:

Endurance: The number of times a memory cell can be switched from a low resistive state (LRS), representing a value of 1, to a high resistive state (HRS), representing a value of 0, and back is called cycling endurance.

Retention: The amount of time a memory cell can stay in a LRS or HRS, and thus represent a value of 1 or 0.

Access speed: The speed at which data can be written and read is called access speed. This needs to be sufficiently fast to make the technology suitable for various applications.

Scalability: Improving the resolution (linewidth) of the memory cell; lower is better as narrower circuitry allows for more memory cells on the same surface. This reduces production costs per unit of memory (e.g. per GB) and lowers energy consumption of the memory chip.

In 2017 4DS had already demonstrated extremely high access speeds for a non-volatile memory (NVM), i.e. close to DRAM speeds, while the individual memory cells had already been scaled down to a 40nm (nanometer) resolution in 2016.

With the number of switching cycles (endurance) into the millions, 4DS has now demonstrated endurance for its memory cells which is well in excess of what is currently required by Storage Class Memory (SCM) applications, such as storage in data centres and on mobile phones. Typical endurance of single-level NAND Flash cells (SLC) is up to 100,000 cycles, while endurance of multi-levels cells (MLC) is typically around 10,000 cycles. In other words, we believe the endurance box is now well and truly ticked by 4DS.

Next step is to expand on D17 results

As a next step in the iterative development process, 4DS will further analyse and characterize the memory arrays on wafer D17, the one with the best results in the previous batch. It will then have imec process another ~20 wafers based on wafer D17, i.e. D17.1, D17.2…etc, all with slight modifications compared to the original wafer D17. The company expects to be able to announce analysis results on this new batch of wafers in 2Q19 (June quarter).

This production and analysis process should result in 4DS being able to determine the optimal production process for its memory arrays.

A few more iterations may be required, but production and testing should go faster

We believe it is not possible at this stage to predict how many more iterative development steps will be required after this upcoming batch of wafers has been produced, analysed and classified. However, the company should now be able to turn around any upcoming test batches much quicker than before, i.e. 3 months instead of the earlier 6 months, which will speed up the development process as a whole.

Once the iterative process is complete, which could be as early as the end of Q2, 4DS will be ready to mount its array on imec’s platform. This platform is imec’s standard carrier for memory arrays and the integration is straightforward and very low risk.

Buy rating reiterated

Based on the announcement of 20 February, we believe the 4DS investment case has been de-risked further. Even though additional development is required, the company has taken another big step towards its end goal of delivering a competitive new storage technology that can be manufactured on today’s mainstream semiconductor manufacturing equipment.

We reiterate our Buy recommendation for 4DS as well as our price target of A$ 0.11 per share.

4DS Memory (ASX:4DS) is a semiconductor development company aiming to provide an enterprise grade storage memory for cloud and data center storage markets. The company is developing a proprietary Interface Switching ReRAM technology leveraging expertise from a strategic partnership with a leading data storage player.

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Pitt Street Research work is commissioned by the listed companies it covers, and Pitt Street Research has received or will receive payment for the preparation of such work. Please refer to the bottom of the research notes as published on Pitt Street Research’s web site for risks related to the companies being covered, as well our General Advice Warning, disclaimer and full disclosures. Also, please be aware that the investment opinion in this report is current as at the date of publication but that the circumstances of the company may change over time, which may in turn affect our investment opinion.

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