Why is the 4DS share price rocketing 48% on Monday?

This small cap tech stock is rocketing on Monday. But why?

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The market may be heading lower on Monday, but that hasn't stopped the 4DS Memory Ltd (ASX: 4DS) share price from shooting higher.

In morning trade, the semiconductor company's shares are up 48% to 21.5 cents.

Why is the 4DS share price shooting higher?

Investors have been buying 4DS shares this morning after the company released an update on the results of the Fourth Platform Lot.

According to the release, further analysis has revealed significantly better results than those that were announced last month which put a rocket under the company's shares.

The release notes that the focus of the additional testing was to establish the optimal conditions of the 60nm resistive random-access memory (ReRAM) cells in the megabit array.

Pleasingly for shareholders, the second test cycle of the Fourth Platform Lot is now complete and the analysis shows the following:

  • Write speed at 9.5 nanoseconds which significantly outperforms DRAM write speed.
  • Increased endurance in excess of 3 billion cycles on a megabit array.
  • Verified equivalent DRAM read speed.
  • Verified persistent memory with variable and tuneable retention.

4DS also highlights that the upper limit of endurance is unknown because it has a finite capacity due to equipment and manpower to test the upper limit in this additional analysis period. Further analysis will be done over time.

Why is this good news?

Investors appear to believe that these results point to ReRAM being a potential successor to DRAM.

The company has previously highlighted that the high-density high-volume memory segment is currently dominated by DRAM (a US$95 billion market) and NAND Flash (a US$56 billion market). It highlights:

The read/write speed and endurance parameters are critical to the Company's goals in the memory space requiring DRAM-like performance. 4DS' ReRAM performance profile to suitably meet this goal has again been clearly demonstrated on the Fourth Platform Lot via the additional testing.

Executive chairman, David McAuliffe, concludes:

These additional megabit array results are a significant milestone for the Company. Moving forward we will continue to undertake further analysis to test the upper limits of endurance and read/write characteristics for the purpose of further enhancements to the Platform. With significant results and a strong balance sheet the Company is extremely well placed to position itself in the memory space that targets a technology that can be closer to DRAM.

The 4DS share price is now up 200% since this time last month.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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