4DS Memory Ltd (ASX: 4DS) shares are having a tough time on Thursday.
In morning trade, ASX tech stock's shares are down 28% to 7.6 cents.
Why is this ASX tech stock crashing?
Investors have been selling the memory technology developer's shares in response to the release of a company update after the market close on Wednesday.
Investors appear disappointed that the update suggests that revenue generation could still be some way off and have been selling down the ASX tech stock.
Earlier this year, the company revealed significant success with its fourth platform lot. Management advised that the results made 4DS "well placed to position itself in the memory space that targets a technology that can be closer to DRAM."
It seems that many felt this was a sign that commercialisation wasn't far away. However, its latest update appears to suggest that there will be at least another year of product development and testing.
What was announced?
The release reveals that the ASX tech stock will be manufacturing its fifth and sixth platform lots on Imec's Dory platform on 60nm and 20nm memory cells.
Manufacturing will commence during the first quarter and second quarter of 2024, respectively, with delivery to 4DS expected during the third quarter.
Management advised that the fifth platform lot is seeking to further optimise the unique characteristics of the results already seen on the 60nm memory cells prior to undertaking manufacturing on 20nm memory cells.
The company's executive chair, David McAuliffe, stated
Today's ever-growing computing landscape presents a growing challenge to solve for platforms, applications and system designers, with massive shifts taking place, including the rise of Generative AI, and other related advances, resulting in severe processing bottlenecks. With a strong balance sheet and a much-reduced dependency on raising additional capital, unless it was a strategic placement, the Board is of the view that this increased investment at imec is in the best interests of shareholders to potentially maximise the opportunity to further position 4DS as a unique technology to address gaps in the market.