Atomera Incorporated, a semiconductor materials and technology licensing company, has been making significant strides in developing and commercializing its proprietary Mears Silicon Technology (MST®) - a revolutionary thin-film material that can enhance the performance and power efficiency of semiconductor devices. With a strong patent portfolio and a growing list of industry partnerships, Atomera is poised to disrupt the $550+ billion semiconductor industry.
Business Overview
Atomera was founded in 2007 with the goal of addressing the key engineering challenges facing the semiconductor industry. The company's flagship technology, MST, is a thin film of reengineered silicon that can be applied as a transistor channel enhancement to CMOS-type transistors, the most widely used transistor type in the semiconductor industry. By incorporating MST, transistors can be made smaller, with increased speed, reliability, and power efficiency.Atomera's commercialization strategy is to generate revenue through licensing arrangements with foundries, integrated device manufacturers (IDMs), and fabless semiconductor manufacturers. These customers pay Atomera a license fee for the right to use MST technology in the manufacture of silicon wafers, as well as a royalty for each silicon wafer or device that incorporates the company's technology.
To date, Atomera has generated revenue from licensing agreements with two IDMs, one fabless manufacturer, and one foundry, as well as a joint development agreement with a leading semiconductor provider and licensing of its MSTcad® software. In April 2023, the company announced a significant milestone with its first commercial manufacturing and distribution license agreement with STMicroelectronics (ST), a global semiconductor leader.
Financial Performance
For the fiscal year ended December 31, 2023, Atomera reported annual revenue of $550,000, a net loss of $19,790,000, and negative operating and free cash flows of $14,557,000 and $14,588,000, respectively. The company's revenue in 2023 was primarily derived from licensing its MSTcad software and providing engineering services.In the first quarter of 2024, Atomera generated revenue of $18,000, a net loss of $4,822,000, and used $4,149,000 in operating cash flow. The company's quarterly results reflect the ongoing investments in research and development, as well as the timing of customer engagements and license agreements.
Atomera's balance sheet remains strong, with $19.3 million in cash, cash equivalents, and short-term investments as of March 31, 2024. The company has been actively utilizing its at-the-market (ATM) equity offering program, raising $4.0 million in net proceeds during the first quarter of 2024 through the sale of approximately 510,000 shares.
Geographic Breakdown
Atomera's revenue is primarily generated from customers in North America, with some additional revenue contribution from the Asia-Pacific region. In the first quarter of 2024, the company's revenue was entirely derived from North American customers.Guidance and Outlook
For the second quarter of 2024, Atomera expects total revenue of approximately $50,000, consisting of MSTcad license revenue and engineering services. The company has also updated its full-year 2024 non-GAAP operating expense guidance to a range of $16.5 million to $17.25 million, reflecting the lower outsourced R&D spending in the first quarter and planned new hires in sales, marketing, and engineering.Regarding the company's landmark license agreement with STMicroelectronics, Atomera has stated that the next major revenue milestone will be the grant of the distribution license upon completion of the qualification process, which is largely under ST's control. The company has not provided specific guidance on the timing for recognizing this revenue.
Competitive Landscape and Risks
Atomera operates in the highly competitive semiconductor industry, where it faces competition from both established players and emerging technologies. The company's success is dependent on its ability to effectively commercialize its MST technology and secure additional licensing agreements with major industry players.Key risks facing Atomera include the ability to successfully scale its technology, the timing and adoption of its solutions by customers, the potential for competing technologies to disrupt the market, and the company's ability to secure additional funding to support its operations and growth initiatives.
Intellectual Property and Partnerships
Atomera has a strong patent portfolio, with over 200 patents and patent applications related to its MST technology. The company has also established strategic partnerships with leading semiconductor equipment manufacturers, foundries, and IDMs to further the development and adoption of its technology.In addition to its work with STMicroelectronics, Atomera has ongoing engagements with several other major industry players, including a joint development agreement with a leading semiconductor provider and licensing agreements with a fabless manufacturer and a foundry. The company is also actively exploring opportunities in the fast-growing compound semiconductor market, such as gallium nitride (GaN), which could represent a new revenue stream.