The Weebit Nano Ltd (ASX: WBT) share price has returned from its trading halt and is rocketing higher.
In morning trade, the semiconductor memory technology company's shares are up 59% to a record high of $4.50.
This gain means the Weebit Nano share price is now up over 400% since this time last year.
Why is the Weebit Nano share price rocketing higher today?
The Weebit Nano share price has taken off today after the company confirmed that it has entered into its first commercial deal.
According to the release, the deal is with a subsidiary of Nasdaq-listed semiconductor foundry SkyWater Technology Inc. (NASDAQ: SKYT).
SkyWater is a US Department of Defense accredited pure play technology foundry. It specialises in advanced innovation engineering services and volume manufacturing of a wide variety of differentiated integrated circuits (ICs).
It also supports customers developing and manufacturing ICs in various markets. These include aerospace and defense, automotive, computing and cloud, consumer, industrial, and medical.
Management believes this first commercial deal is a critical milestone for Weebit Nano, providing commercial validation of its ReRAM technology and commencing the growth trajectory for its technology onto customers' chips.
The release notes that SkyWater will be dedicating a significant amount of time and resources to support the commercialisation of Weebit's technology.
Furthermore, SkyWater will take Weebit's ReRAM technology to volume production via a license to manufacture customer designs containing Weebit's technology. This is once the technology has been qualified in SkyWater's production fab. The two companies will also cooperate on marketing and sales activities.
On the path to revenue generation
Also potentially giving the Weebit Nano share price a boost was management's comments on what this means for its future revenues.
Weebit Nano's CEO, Coby Hanoch, commented: "Weebit's first commercial deal is a major milestone for our Company, providing validation of our innovative technology. It enables us to bring Weebit's cutting-edge ReRAM technology to volume production by offering it to SkyWater's extensive customer base, in addition to customers Weebit will sign up and bring to SkyWater, putting us firmly on the path of initial and ongoing revenues."
However, it has warned that at this stage it is unclear whether these revenues will be material.
The company advised that the economic materiality of this agreement is not known due to the contingent nature of the license fees and royalties. This is because they depend on the number of customers who sign up to use Weebit's technology and on the number of chips those customers produce using the technology.
Nevertheless, that clearly hasn't put a dampener on the Weebit Nano share price today.
