The Weebit Nano Ltd (ASX: WBT) share price is taking off on Thursday morning.
In early trade, the semiconductor company's shares are up 14% to $3.55.
Image source: Getty Images
Why is the Weebit Nano share price surging?
Investors have been buying the company's shares today after it announced a commercial agreement with South Korea foundry DB HiTek.
According to the release, DB HiTek has licensed the company's memory technology, Weebit Resistive RAM (ReRAM), for its customers to integrate as embedded non-volatile memory (NVM) in their systems on chips (SoCs).
Under the agreement, Weebit ReRAM will be available in DB HiTek's 130nm Bipolar-CMOS-DMOS (BCD) process. The company highlights that this is ideal for many analog, mixed-signal, and power designs in consumer, industrial, and other Internet of Things devices.
Management believes its technology is a great fit for these applications because it provides a low-power, low-voltage, cost-effective NVM that is easy to integrate and has proven excellent retention at high temperatures.
How much is the deal worth?
Much like the agreements of fellow meme stock Brainchip Holdings Ltd (ASX: BRN), it is unknown if this agreement will ever generate meaningful revenue. The company explains:
The economic materiality of this agreement is not known at this time due to the contingent nature of the license fees and royalties, as 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 Weebit's technology.
Nevertheless, Weebit Nano's CEO, Coby Hanoch, appears optimistic that this could be the start of something big. He said:
As one of the world's largest contract chip manufacturers, DB HiTek's extensive customer base can gain significant advantage from using Weebit ReRAM in their new product designs, including improvements to retention, endurance, and power consumption. Our collaboration with DB HiTek is commencing immediately, beginning with the transfer of our technology to the company's production fab. We are seeing increasingly strong market demand for Weebit ReRAM and expect to sign further commercial agreements, including many of the toptier foundries and integrated device manufacturers as well as fabless design companies, in the coming months.
Time will tell whether this is another Brainchip dud stock or something with substance.
