Okay, yeah. We got this. My name is David Perlmutter, and I have the privilege of being the chair of Weebit Nano. It is my pleasure to welcome you to the 2022 annual general meeting of Weebit Nano Ltd. We have a quorum. I declare the meeting and poll open. Notice of meeting was distributed on 14th October 2022, and which will set out the business and resolutions to be considered at this meeting, and we'll take the notice of meeting as read. It is now 10 A.M., but 10:05 A.M. to be precise, the time appointed for the meeting. As we have a quorum, I declare the meeting open. I would like to outline some of the procedural matters.
Today's meeting is the first time we have been able to get together in person since 2019. Last time we had it in Melbourne. It is great to be able to meet in person time again, see some of the faces which we know. It's good to see same faces and new faces as well. We're also conducting the meeting with a virtual component. This hybrid format allows shareholders and proxies wherever they may be to attend virtually also. All shareholders and proxies have the ability to ask questions and vote today. If we experience any technical issues during the meeting, short recess may be required. Should this occur, we will communicate accordingly. I need to slide. Yeah. Okay.
Shareholders will have an opportunity to ask general questions after the conclusion of the formal item of business and following presentation from CEO Coby Hanoch. For those attending virtually, please see the steps as outlined on the screen. For those attending the meeting in person, please raise your hand when prompted, and you will be called upon at the appropriate time. Voting today will be conducted by way of a poll of all items of business. Instructions on how to vote through the Computershare platforms are displayed on screen. Just display them. In order to provide everyone with an opportunity to vote, and in case anyone cannot stay for a whole meeting, the poll is now open, and you can vote on all resolutions. I will give you the warning before I move to close voting.
For those voting holders physically in the room with me today, you should have received a voting card upon registration. Please complete the reverse of the voting card. Should you require assistance to do this, have Computershare staff available to assist you. Today, I'm joined by fellow directors, CEO Coby Hanoch. I don't know if Yoav is on the line. As we know, it's middle of the night in Israel. Atiq Raza, which I presume is on the other side of globe. We have here Fred Bart and Ashley Krongold, the two local Australian directors of the company. Also hopefully present today is CFO Alla Felder. She might be asleep, but she is never asleep. Representatives from our company secretary office, Automic Australia. We have Miranda Jans-van Noyenhornefussen. I apologize for mispronouncing the name.
Our auditor from Nexia Perth, and Glade Rogers for share registry, Computershare Investor Services, who will also act as our returning officer. I would like to make a short statement as the chair. The 2022 financial year and the last couple of months have been an exceptional period for Weebit Nano. A period in which we demonstrated the maturity and suitability of our embedded ReRAM for volume production, entered our first commercial agreement with SkyWater Technology, successfully qualified our technology with CEA-Leti, and received our first silicon wafers incorporating our ReRAM module from SkyWater Technology's U.S. production lab. These achievements have accelerated our engagement with tier one and tier two fabs and potential customers, and we are now in various stages of discussions and technology evaluation with each of them.
Many of you will have heard Coby refer to this dynamic as a chicken and egg scenario. We're trying to get the chicken and the egg all together. It works better when you get one before the other, but we'll see. Fabs will often wait until customer requests a new technology before adopting it, while a customer will also want to know new technologies available at the fab before integrating into their designs. We're now at the point where we will soon break this deadlock, as the market acknowledges the need for ReRAM, and we are getting customers and fabs to talk with the goal of a three-way cooperation. We are hearing from tier one and tier two fabs, and the customers are asking them about ReRAM, and this also acknowledged by customers. We are now qualifying the chips manufactured at SkyWater.
SkyWater is already calling on their customers to introduce Weebit ReRAM to them. You could see the SkyWater website mentions Weebit and the potential. Our progress over the last year would not have been possible without our valuable partnership with development partner CEA-Leti and first commercial partner SkyWater Technology. On behalf of this entire Weebit team, I would like to thank you both, and I look forward to our continued collaboration in 2023 and beyond. I'm incredibly proud of Weebit Nano's achievements to date. The company has consistently delivered against its milestones, and our embedded ReRAM is well-placed to meet the rapidly growing demand for faster, more efficient non-volatile memory technologies. The achievement of several technical milestones over the past year is a testament to our exceptional team, management, and the board.
While the memory technology we are commercializing is new, developing the big new semiconductor technology to market is a process many of the Weebit Nano team have been through before. Thankfully, here's to my fellow directors and Weebit's entire team for all the hard work and dedication over the past year. I look forward to the year ahead. Finally, thank you to our loyal shareholders for suppo rting us on this journey. This is not taken for granted. Full year 2023 is shaping up to be an exciting year, one in which we expect to sign an additional fabs and customers and also commence volume production on our embedded ReRAM technology. Coby will bring more details in his presentation. I turn back to the formalities now of today's meeting.
I confirm that I propose to vote those proxies left to my discretion as the chair in favor of all resolutions. Proxy voting received prior to the meeting will be shown on the screen for each item of the business to be voted today. Yeah. Let's resume. Resolution one. Oh, okay. Before we go there, we talk about the questions. Our shareholders, validly appointed proxies, and corporate representatives are entitled to ask questions at today's meeting. It is my duty as chair to ensure the shareholders here as a group have a reasonable opportunity to discuss the management of the company and the items of business before the meeting. The following procedures have been adopted for the meeting. Questions and comments should be concise. Questions and comments must be confined to the particular item being discussed and to the matters relevant to shareholders as a whole.
Shareholders are limited to one question at a time. As outlined previously, for those attending virtually, please see the steps as outlined on the screen. I showed it earlier. For those attending the meeting in person, please raise your hand when prompted and you will be called upon at the appropriate time. The first item of the business is to receive and consider the company's annual report, including the directors' report and auditors' report for the year ended 30th of June, 2022. A copy of the 2022 annual report was made available to shareholders on 26th of August, 2022. There is no formal resolution to put to the meeting in relation to the adoption of the 2022 annual report. However, I will respond to questions from shareholders in relation to the annual report.
Miranda of Nexia Perth is also available online to respond to any questions relating to the audit and financial segments. We'll also take questions about, or any comments you may have in relation to the management of the company. Are there any questions or comments from people on the phone or online?
None online, Mr. Chair.
Anyone in the room?
There are no questions on the phone.
Okay. If there's no questions online and on the phone, and there are no questions in the room, I will now move to the next item of the business. Resolution 1 relates to adoptions of the remuneration report for the year ended thirtieth of June, 2022, set out in the notice of meeting and displayed on the screen. Are there any questions or comments online or on the phone?
No questions online.
There are no questions on the phone.
Any questions in the room? If there are no further questions in the room, I'll now table the outcome of the proxy voting received prior to the meeting as shown on the screen. Resolution 2 relates to the re-election of Mr. Yoav Nissan-Cohen as a director of the company, as set out in the notice of meeting and displayed on the screen. Are there any questions online or on the phone?
No questions online.
There are no questions on the phone.
Any questions in the room? As there are no questions online, on the phone. Sorry. I will now move to the outcome of this resolution. Resolution three relates to the re-election of Mr. Atiq Raza as a director of the company, as set out in the notice of meeting and displayed on the screen. Are there any questions online or on the phone?
No questions online.
Any questions in the room? As there are no questions in the room, I will now table the outcome of the voting received prior to the meeting, as shown on the screen. Resolution four relates to the approval of issue of performance rights to Executive Director of the company, Mr. Coby Hanoch, as set out in the notice of meeting and displayed on the screen. Are there any questions on the phone or online?
No questions online. There are no questions on the phone.
Any question in the room? As there are no questions in the room, I will now table the outcome of proxy voting received prior to the meeting, as shown on the screen. As the next item relates to me, I will hand the chair over to Coby to address this resolution.
Thank you, David. Resolution 5 relates to the approval of issue of performance rights to Non-Executive Director of the company, Mr. David Perlmutter, as set out in the notice of the meeting and displayed on the screen. Are there any questions or comments online or on the phone?
No questions online. There are no questions on the phone.
Questions here? If there are no questions online or on the phone, I'm sorry. As there are no questions in the room, I will now table the outcome of proxy voting received prior to the meeting, shown on the screen. Oh, sorry. Yes. Yes. Yes. Oh, for me? Oh. Sorry. Yes. No, we did that one. Sorry.
Okay.
I will now hand back to David to chair the meeting.
Thank you, Coby. Resolution number six is the approval of issue of performance rights to Executive Director of the company, Dr. Yoav Nissan-Cohen, set out in the notice of meeting and displayed on the screen. Are there any questions, comments online or on the phone?
No questions online. There are no questions on the phone.
Are there any questions here in the room? As there are no questions in the room, I will now be able to show the outcome of the proxy voting received prior to the meeting, as shown on the screen. Resolution seven relates to the approval of issue of performance rights to non-executive director of the company, Mr. Ashley Krongold, as set out in the notice of the meeting and displayed on the screen. Are there any questions or comments online or on the phone?
No questions online. There are no questions on the phone.
Any question in the room? As there are no questions in the room, I will now show the table of the outcome of the proxy voting received prior to the meeting, as shown on the screen. Resolution eight relates to the approval of issue of performance rights to Non-Executive Director of the company, Mr. Fred Bart, as set out in the notice of meeting and displayed on the screen. Are there any questions or comments online or on the phone?
No questions online. There are no questions on the phone.
Any questions in the room? As there are no questions in the room, I will now table the outcome of the proxy votings received prior to the meeting, as shown on the screen. Resolution nine relates to the approval of issue of performance rights to Non-Executive Director of the company, Mr. Atiq Raza, as set out in the notice of the meeting and displayed on the screen. Are there any questions online or on the phone?
No questions online. There are no questions on the phone.
Are there any questions in the room? As there are no questions in the room, I will now table the outcome of the proxy voting received prior to the meeting, as shown on the screen. Resolution 10 relates to the amendments to the constitution as set out in the notice of the meeting and displayed on the screen. Are there any questions online or on the phone?
No questions online. There are no questions on the phone.
Are any questions in the room? As there are no questions in the room, I will now show the table of outcome of proxy voting received prior to the meeting, as shown on the screen. Thank you very much. I will now pass the control of the slides to Coby. He's going to give the CEO address, and there's going to be the questions and answers after he finish his presentation. Go ahead.
Okay. I guess you guys survived the previous part, so I'm really, really glad to see everyone here. It's so good. Almost three years that I haven't been to Australia, and it's really great to be here, and I appreciate all of you coming. I think, you know, this has been an amazing year for us. There have been so many things that happened. And it's really, I think, first of all, you see the title on this slide, you know, the next NVM is here. I think that's really the key message right now. You know, even a year ago, a year and a half ago, I would talk to people in the industry. I would talk to foundries, I would talk to customers. "Oh, yeah, that's a very interesting technology. It sounds great.
Yes, it's that future technology. Even Weebit's tagline was the future memory. You know, I'm very glad to say that we're changing it, you guys can see, because it is here. You know, I was looking at it. You know, everyone's telling us, "Wow, you know, we need it now." Our tagline was just not the right one. We changed it and, that's really the key message. We're talking to people, we're talking to the foundries, we're talking to customers, and everyone's just saying, "Yeah, now is the time. We need it." You know, first of all, I guess we already introduced the board here. You know, I always tell people how proud I am of the board and, you know, that's, I think it's obvious and you guys know where.
You guys know Weebit. I won't spend too much time here. You know, we're working on the non-volatile memory technology, and this market is growing rapidly. The demand is very strong. I think, you know, you guys are aware of that. Again, the management team, you know, I wake up every morning, I can't believe all these guys are working with me. It's just so awesome to have people. Each one of them has 25, 30 years of experience in the memory domain. You know, it's so much experience and so much knowledge that no matter what obstacles we meet, and you know, obviously you always meet obstacles in this domain, but they know how to make it work. They know how to continue, and I'm really very proud of this team.
You know, a little bit of an update on what's happening today. Many of you have already heard many times there's a chip shortage. You know, there's really an overdemand for chips. The semiconductor space is really under a lot of pressure because the demand is growing all the time. It is, you know, you guys know in previous presentations, I used to have this slide that shows that, today nine out of ten of the top market cap companies in the world are semiconductor companies or very heavily dependent on semiconductors. That's what's happening. No matter where you look, no matter what you touch, it has semiconductors in it. In those semiconductors, the top market segment is memory.
You know, I put here just some of the investments that are going on this year in semiconductors. You know, everyone's talking always about the CHIPS and Science Act, but they don't realize Europe has been putting money in. Japan, Korea, Taiwan, a lot of countries have been putting a lot of money into building their semiconductor infrastructure. Semiconductors are strategic. They're strategic to companies, to countries, and you can see the geopolitical tensions now even between U.S. and China. The major element there is semiconductors. You know, when people talk about the fear of China invading Taiwan, I think the number one fear that they have is China taking over TSMC, which is the biggest foundry, TSMC, UMC, et cetera. You can also see you know, the investments that companies are making.
You know, I told you guys many times of building a fab is billions of dollars. You know, the bigger fabs, the more advanced fabs. I've seen a fab that was just one building, $30 billion. One building.
It's a big thing.
It's a building. Yeah. It's a building, but it's just mind-boggling to think of the complexity of making these semiconductors there and, you know, the investment that goes into these things. You can see the numbers here. You know, it's crazy. All of these companies are announcing these huge investments. Some of them, Samsung said it's gonna be over a few years, whatever, but, I mean, these are numbers that are just so hard to even understand. Again, the largest segment in semiconductors is memory, and non-volatile memory is a key part of that. You know, when you look at specifically non-volatile and specifically at the emerging. When people say emerging non-volatile memory, we're talking about 3D XPoint and eMRAM. Yole is one of the leading analysts in this domain.
This is their recent report showing the growth that they see for emerging nonvolatile memory market. They actually expect it to reach $3 billion in 2027. They're currently predicting that ReRAM will be one-third of it. MRAM, by the way, has been in the market already several years. It's leading ahead of ReRAM. There are companies that are already selling it commercially. It's already out there, and that's why it has a larger market share. I personally think that they're gonna be updating those numbers, especially moving forward. From the discussions that I've had with multiple fabs, with multiple customers, people are shying away from the MRAM. MRAM is a much more complex technology to manufacture.
I heard people say, "Oh, you just look at the list of rare earth materials that they have in there." You know, talk about non-standard. That's like the most extremely non-standard materials you can have in a fab. You cannot. You know, when I talk about Weebit and the fact that we're standard materials, we just go into the standard production line of a fab, and we just go. I mean, we need to do the technology transfer. We need to make everything work. There's qualification and all. But in general, it's, you know, straightforward. With MRAM, you need to have a separate manufacturing facility. You have to have it far away from the fab because the damage it can do to the fab is huge. Manufacturing it, you have so many thin layers that you need to manufacture.
The added cost to a wafer of MRAM is between 30% and 40%, you know. ReRAM, our ReRAM is, like, 5%-7% added cost to give you that feel. I believe that as we ramp up there, as we get to the market, as we start having more and more customers and people feel more comfortable with our ReRAM, the 33% personally, I think, is gonna change. Now, I already talked about this, but, you know, my team put together the logos. When I told them we need to change it, we're not the future memory, they actually said, "Look at how Weebit progressed." You know, ReRAM research started back in the 1960s. Weebit started, the company actually incorporated in 2015. At the time, we were just talking about jumping to the future.
You look at our taglines, you know, the emerging memory or the future memory. You know, we were always something futuristic. Again, I'm really glad to say the next NVM is here. We're qualified, and this is really a great moment for us that we're transitioning into the commercial side of things. I think many of you saw this slide, but it's a very important slide to look at again. You know, all of the advantages that our ReRAM brings to the market. I start from the lesser advantages, saying, you know, there's 100 x faster than flash. That is very significant. AI, autonomous vehicles, et cetera. Just think of the sensor in an autonomous vehicle that needs to react as quickly as possible to something that happens and, you know, do something.
You know, you need to have extremely fast systems. We are 100 x lower power than flash. Again, we consume 1% of the power relative to flash. Think of your cell phones. How often do you need to stop in the middle of the day? Does anyone have a charger? You want lower power memories. You want lower power everything, right? You know, radiation tolerance. We're basically inherently tolerant to radiation. Many industries, defense or aerospace or many others, even when you're in hospitals and, you know, you have all kinds of radiation from all kinds of places, you don't want to have the memory impacted by it. High temperature for automotive. This is a critical criterion, and we've been receiving so many requests about this because many memories cannot achieve high temperatures.
I think the two most important advantages that we have, and we've said that many times. One is we can go down to below 40 nanometers. This industry is constantly about shrinking and going down to smaller and smaller and smaller geometries. Today, the advanced designs are already at 5 nanometer. You know, we have, Samsung announced that they're gonna be opening a fab at 1.4 nanometer. TSMC announced that they're gonna have 1 nanometer. I don't know how they're gonna do it, but, you know, that's beside the point. You know, 40 nanometers is an old technology already. All of these advanced guys today, when they need nonvolatile memory, they have an external flash that they kind of glue and connect somehow to it. Very inefficient, power-hungry, slow, all the bad things you wanna talk about, and especially security.
You know, People can eavesdrop on what's happening between the two chips and, you know, that's not a good thing. The number one thing I already talked about, you know, the cost-effectiveness. We're a back-end-of-line technology. I won't go into technology, but that really has an impact. It makes it much simpler, relatively. David always tells me, "You know, you need to emphasize it." Nothing is simple in semiconductors, but it is simpler. It is easier. It is cheaper to manufacture. There's a lot of intelligence in our ReRAM. You guys know how many years it took us to develop the technology, how many patents we, you know, have, et cetera, et cetera. You know, sometimes doing things in a very simple way is the hardest thing, right? That's basically it. You know, manufacturing is actually simple.
It's knowing how what to put where, which really is the smarts, and that's really what we focused on. Overall, I think that this is really important. You know, you look at the different market segments here, each one has different demands. You know, when you look at all of these advantages that we have, you know, we give key advantages to every one of these market segments, and we can go and address them. We are talking today to different market segments. You know, the key ones that are talking to us right now are IoT and, you know, the analog guys, the power management guys. Those are sweet spots for what we're doing with SkyWater.
All of the others, you know, now that we're working on 22 nanometers and beyond, you know, there's interest from many different domains already. So again, you know, this past year has been just awesome, very exciting. I know that in the beginning of the year, people were complaining, "But you don't have any news." I said, "Yeah, we're working on it." You know, some of you guys, I think, also sent me messages on LinkedIn or email or whatever, you know, "What's going on?" You know, "When are you gonna have some news?" Well, you know, a year ago, look at all the stuff that happened. A year ago, we announced we already reached 28 nanometers, and we had a very nice raise last year.
You know, we moved into this year, we announced we're scaling to 22, and we said before the end of the year, there's gonna be a tape out of 22 FDSOI. So again, just so you understand, the number of fabs worldwide that can manufacture 22 nanometers is less than 10. You know, Gabby and I were arguing if it's 7 or 10 or how many, but it's that order of magnitude. You know, there aren't many fabs that can go there. I can tell you that the foundries that we're talking to now are pushing us to the teens already, and we're already looking at manufacturing in the teens and really pushing forward all the time. You know, we announced the selector. I'll talk about that later. The qualification, a key point.
You know, I'll talk more about what we're doing on the qualification side. Of course, I actually have here, you know, coming out of the office to the plane, I grabbed a wafer. We just got the wafers from SkyWater. I have a wafer here to show you guys, whoever wants to, after we finish, the talk. I have the wafer. I also have one of the chips that you can look at under the magnifying glass to kind of get a feel for what we're talking about. It's here. Really, you know, SkyWater was a major milestone for us. Having the first fab that actually signed a licensing agreement. We have a commercial agreement with them, and you've been following things with us. You know, we had the agreement with them. We transferred the technology.
The first technology transfer, the first everything is always, you know, the more challenging one. I told you guys in the past, we prefer to work with a tier two fab in the beginning because they're much more tolerant. We can work with them. It's, you know, more at eye level. They've been a great partner, moving forward. We taped out our memory chip there, and we got the wafers, and now we've already started qualifications. I can tell you, I got a nice email when I landed here that, "Hey, the chip is working," and, you know, we're seeing good initial results. Obviously, it's very initial, but, you know, the qualification process is a long one. And we're heading into that.
At the end of that, next year, we'll be ready for mass production with customers at SkyWater. You know, I'm very proud to hold that wafer in my hands in the picture there. SkyWater is now already. We've moved to the next level. You go to the SkyWater website, you can see a page about Weebit's technology. They're promoting it. Their sales team has received training, and they're talking to customers. We're getting questions from their customers about ReRAM. You know, that whole interaction is going. Their CEO, by the way, in their earnings report, I guess a couple of weeks ago, was talking about Weebit. It's really moving forward to that next step.
You know, it's always a long process moving to commercialization, but it's happening, and that's really good. The thing that happened, and I guess I'll talk about the qualification first. You know, the other major, very major milestone that we hit recently is the qualification. You know, for people who are not from the industry, it's hard to understand just how important this milestone is. This is really, you know, a stamp of approval from an industry standards body. You know, they define JEDEC, which is a very important industry standards body, define what kind of testing needs to be done in order for a technology to be able to say that it's ready for mass production. You know, you need to present your results to people and so on.
It's a very, very difficult and rigorous process. You need to go through multiple manufacturing cycles. It's not enough to have one good manufacturing cycle. You need to have at least three. You need to take hundreds of chips from the different wafers in the different manufacturing cycles and go through testing. You know, in our case, it was almost 700 chips that went through very intensive testing. You know, it's going through high temperature. You know, chips are put in the oven for thousands of hours, you know, and you need to make sure that they still operate after that. I won't go through all the details, but that's why it takes so many months of work, you know, hundreds of chips going through all of this and then, you know, different manufacturing cycles.
At the end, we have now qualification. We're showing it to the big foundries and, you know, it's opening all the doors. Now, what's really happened, this is a good time to try to explain to you some of the different things that are happening in parallel in this industry. I said a year ago, everyone was still saying it's that future memory. Now TSMC, the largest fab in the world, announced that they have ReRAM and that they're offering it to their customers. That sent a shock wave in the industry. By the way, we found out now that there's already a chip in the iPhone 14 with embedded ReRAM in it that was made in TSMC. You can imagine all the other foundries suddenly wake up, "Oh my god, you know, we need to compete with that.
We need to. You know, what are we gonna do here?" They're looking around for ReRAM technology. That's where another angle comes in. You know, a few years ago, I remember having meetings in forums like this, and people were saying, "Well, what about the competition?" At the time, there were four young companies like Weebit developing ReRAM. Well, guess what? The other three are basically not there. One of them was trying to jump really high and say, "We want to have the ultimate ReRAM." They were using non-standard materials and they had huge challenges with the foundries.
Eventually, after raising $150 million, their investors got tired, and some Chinese firm took over, and there's some small activity happening in China, but basically it's been more than a year that we haven't heard anything from them. Another one was acquired, and the company that acquired them was acquired, and the company that acquired didn't have interest in memory. They wanted other technologies there. They let go most of the team. You know, basically that team is falling apart. You know, basically these companies are not there. Now when people are looking for it, oh, there's a company here that has qualified ReRAM, that already has wafers that came out of a mass production facility. You know, it's working. You know, they have a management team that we know.
We know a lot of the people in the board, the management team. We know these guys are respectable. All of a sudden. Sorry. We have tier one fabs calling up on us, you know. We're talking now to quite a few of the tier one fabs and there's interest and, you know, we're in different stages of evaluation with these guys. There's really so much happening now. I can't go into the details, and I can't tell you guys who we're talking to and what. You know, as soon as we have something concrete, of course, you guys will know. But there's really so much happening and it's so exciting. That's, you know, that's really what I'm trying to pass the message to you guys. Weebit has gone a long way.
By the way, a lot of you guys have been with us through very tough times and I think, you know, it's so great to be now in a position where we really have good news happening, a lot of things going on. And we've been talking a lot about the embedded, which is really the first market that we're going to, you know. A lot depends on strategy and on decision of what you wanna do first. By the way, I was talking about the other three. You know, I think a lot of their issues were that they were trying to jump too high, too far, too fast and not really going in an organized, methodic way about the technology.
What we identified, you know, the embedded space is where we have very big advantages over flash. Going down below 40 nanometers, there's not even any flash solution. You know, we're going into the embedded space first, and we will be announcing, you know, I hope very much that we'll be closing deals with additional foundries and definitely with customers. There's already a lot of discussions with customers. You know, in the past I was talking about this triangle of Weebit providing a technology. This technology needs to be embedded into a system on a chip of a product company, and then they need to go to manufacture in a fab or a foundry. A foundry is what we call a company that has fabs. I use that interchangeably, and I hope I'm not confusing you.
You know, we're building these triangles now. We're already connecting customers and foundries and having these discussions. You know, we're gonna start having more and more of these triangles that we'll be able to announce as soon as you know, these things really materialize, but we're making very good progress in that. That's all, you know, embedded. In parallel, there's a huge market that is the discrete or the standalone market. That market of standalone chips is something that we're not neglecting. There is constant work going on there. You guys know that we've been working on the selector. We've been making good progress with the selector.
We've managed to make it such that it's really also focused on standard materials and on something that we can go into the fab without many issues, and that's a huge challenge. This thing is happening, and, you know, the discrete market, by the way, is also has a lot of segments in it. Some of them are gonna be much harder for us to penetrate, and it's gonna take longer time. Some of them are gonna be easier to penetrate. You know, what's called NOR flash is actually a market that is easier to go to, so we're already talking to some customers about NOR flash and having, you know, discrete chips there. Again, so many things going on in parallel and as we get things done, you know, you guys will know the details.
Scaling down to 22 is another important thing I already mentioned. You know, there are very few facilities that can go to 22 and even fewer that can go down to 16, 12, 10, and beyond. We're going to be tape out soon on 22 nanometers. That's another important milestone to show the industry that we're not just with a good technology. We can go into the leading edge. We can scale down to the smaller geometries and get there. I can tell you that some of the tier one fabs are already pushing us much beyond 22 and there's already work going on about looking at how we can work at at smaller geometries. There's constantly you know, this thing, people ask me, you know, "When are you gonna finish your R&D work?" Never.
You never finish your R&D work because you constantly want to go to the smaller geometries as they appear and, you know, as the market evolves. You constantly want to improve to be even lower power, to be even faster, to be even, you know, simpler, easier to manufacture, have better endurance, better retention. There's constant work going on. You know, this is, you know, when we have this, it's going to be another key milestone to show that we actually managed to have a design at 22 that we're sending it to manufacture. You know, the bottom line is, there's a lot of activity going on. We're talking to these tier one fabs. We're working with a lot of customers.
You know, some of the people that we're talking to, even people who don't know the semiconductor market will recognize the names. It's not easy to make these triangles work, to have a product company that agrees to use the technology and goes to the foundry, and the foundry can manufacture what they need. You know, there's a lot of alignment that is required. People, and I talked about it many times, people are always naturally very concerned about being the first ones to use a new technology. They're betting their whole product on that new technology. If it doesn't work, the whole product revenues are gone. So obviously people are concerned. I've been through this many times in my life. I've spent my life in startups, and every time we hit that same challenge of just how do we cross that chasm.
You know, there's a great book, whoever hasn't read it, about startups, which is called Crossing the Chasm, and it talks about exactly that. You're standing there. How do you cross that? How do you get to the place where you actually start sales and then get things going? We are now in that process of crossing that chasm, getting to the point of the first agreements. You know, next year there's already going to be the first licensing agreements, license fees and so on. It's great, and we're participating in quite a few conferences. You know, we were at the Flash Memory Summit. We're actually at a few conferences and, you know, next month there's going to be an IP conference in France. Lots of marketing material as well.
To summarize what we're looking at, you know, trying to set now the targets until the middle of next year. With SkyWater, we clearly need to finish the qualification of the module, the wafer that I have here, and start actual, you know, work with their customers. We're pushing forward very strongly. You know, other fab partners now that we're talking to the tier one fabs, we really want to close with at least one of them by the end of this fiscal year, you know, bringing customers on board. We also, by the way, you know, when I talk about qualification, and I didn't explain that, there are different levels of qualification. Right now, we did qualification at what's called the industry standard.
We're being requested by quite a few people to move up to automotive standards. We are doing that, and we will be announcing that we managed to achieve qualification, even at automotive standards. Automotive standards also have several levels, but we'll be doing the first level and moving on. We're not gonna stop qualification. We'll keep moving to the next level. Now in terms of expectations, because I know that many people have been asking me about, "Oh, so we're gonna see Weebit in cars soon?" The automotive industry is extremely difficult, extremely heavily regulated. Human lives depend on these cars. You need to go through very, very rigorous testing, much more than almost any other industry. You know, we are talking to automotive companies.
You know, there's that discussion going on, but I don't wanna set expectations that tomorrow you'll see Weebit in a car. But it's, you know, something that we're working on. Continued R&D always scaling down to beyond 22, et cetera. I guess that's it. You know, you guys know the company. We're in a very good industry. We have a great technology. We're making very good progress. We have a great team. I don't know. Any questions, comments? Also from online, if there's anything coming in. Yeah. Thank you. It makes me so excited, this stuff. People ask me, "Why are you still in this industry? You know, you could retire." Oh, this is great. Yeah. Sorry. We currently don't see a limit.
At this point, we haven't reached anything that kind of signals to us we can't go below a certain geometry. Actually, Professor Tour now, by the way, he's not involved in semiconductors anymore. You know, I keep in touch with him. He's a great guy and, you know, someone that I highly respect. But you know, Weebit has gone a long way already from that Rice technology and he's less involved. Actually, I even turned to him, I said, "Can we do some cooperation and stuff." He said, "You know what? I don't have any students that are doing semiconductors." Yeah. I won't go into specifics, but right now people are pushing us into the teens.
That order of magnitude, which is already a big step forward. It's even beyond 22 because you're moving to new technologies. When you're going down from the 20s down to the 10s, you're already moving to new kinds of technologies. There's a lot of work to make it work there, but we're already, you know, doing those analysis. Yeah. First of all, TSMC has that—what they're offering right now is that 40 nanometers. They're also, I think very soon will have it at 22 or might be. We know, you know, we've seen their data sheets. I'm very confident we'll be very competitive with them, to say the least.
It's important to note here, and I think again, many people are saying, "Oh my god, you're trying to compete with the largest fab in the world. I mean, you know, what's going on here?" A, they're not competitors. When we heard that they were selling ReRAM, champagne bottles were open. You know, that was like the best news I could ever have because of several things. First of all, you know, they're a fab, so they're not gonna be providing it to any other fabs. All the other fabs now have to have something to compete with TSMC. That's the first thing. The second thing is TSMC is not a competitor. TSMC. What does it mean to be a foundry? A foundry sells wafers. Okay?
Now, in order to sell the wafers, they want to give their customers the largest possible library of elements that can come on those wafers. You could think of it as a supermarket. You know, they will have their several types of milk, right? Different types of processors, different type of, you know, Bluetooth, communication, whatever. They have their ReRAM on the shelf there. When we show that we're better and we're, they're just gonna put us on the shelf right next to them. They won't really care. They wanna sell wafers. Okay? People should understand we're not competing with TSMC. Not at all. On the contrary, for me, they are potential customers that eventually will get. Yeah.
We can use the microphone because people online can't hear. Other questions?
Oh, sorry.
Thanks, Coby. Justin Twomey is my name. I'm also asking for Peter Koppman, who's been in touch with you a bit, and he asked to say good day. The question's around the potential competitive, technical. It's the NeoCi Hi-RAM . Works in the analog rather than the digital space. Could you give us a bit of background as to what and how that might intersect?
Yeah. David is sitting here and, you know, Intel's founder, I guess, you know, the famous statement is, "Only the paranoid survive." Okay. We have to be paranoid. David does a great job at it and, you know, he keeps his head, he learns from him and, you know. We're always paranoid, you know, and I'm always looking around, and I'm always, you know, I'm assuming that there is going to be a new company that somehow pops out of nowhere and will have a good ReRAM technology. That's one of the reasons why I'm really pushing to just move as fast as we can, get into market, get that market share so that, you know, as soon as you become the incumbent, it's much easier, right?
We're pushing there. TSMC has their ReRAM, and that's great. They're pushing that technology as well, and they showed the world ReRAM is here, ReRAM is already used. There's a ReRAM chip in the iPhone 14. It's legit to use ReRAM, so that's good news. There are other, you know, different companies have some ReRAM, and they are using it in different ways. I haven't seen, at this point, anyone who's pushing their ReRAM to the market, who's actually trying to do mass sales of ReRAM. There aren't many, by the way. I mentioned the other three guys are kind of not around now. You know, one of them is 4DS, and I don't wanna go into too much detail there. You guys have many of you guys have been following them as well and seen.
I'm always assuming that at a certain point they will manage to break through, and they will be back. Okay. For me, that's my basic assumption. The same goes for all kinds of other players. Right now, if I try to be as honest as I can, you know, it's really, you know, Weebit is really the one player that is standing out in the market.
Thank you. Yeah, Coby, just with all of the attraction, I suppose, from tier one and tier two fabs, are you able or do you see an ability to be able to simultaneously tape out the product?
Very good question. It is a lot of work. Each one of these foundries, it is a lot of work. You know, obviously every company has capacity issues, and we do too. I use that with them. I basically tell them, you know, whoever moves first and you know engages with us, you know, we'll be working with them. The others might be left out too, you know, second step. It's just that's how much we can do in parallel, right? Yeah.
Hi, Coby. Goran Marelic . Just wanted to ask, given we've come a long way and now that it's just Weebit and TSMC, I believe Weebit's become far more valued in the eyes of all these other non-ReRAM foundries. Has there been any thought given to maybe attracting a white knight investor to protect the company and so it can't be bought out and, you know, all shareholders don't gain the full advantage of your great work and the boards and the company's great work?
You know, we're talking. You know that in the last raise, we brought in Israeli institutions, and actually that's attracted more interest, and we are talking to additional institutions there and, you know, I guess I hope to have more of them come closer to Weebit. You know, I am investing some time with trying to get U.S. investors also interested. You know, the problem with the U.S. guys is, you know, Australia, way out there and it's not our, you know, working hours, et cetera, et cetera. It's not easy. You know, I believe that as we stand out, as we're progressing, as we're, you know, the state that Weebit is, we'll start attracting the attention of bigger investors. You know, that's an ongoing work.
Thanks, Coby. Once again, great presentation. I was just wondering, as the company continues to grow, and we get towards commercialization, the team will obviously also continue to grow. Do you see any constraints there with hiring new personnel and ensuring that the team remains as high quality as it is at the moment?
We have an amazing team, and I think one of the key things for me has been to hire only the top-notch people, really the best people that we can find. Now, it's very hard to find that talent. I'm very proud to say that we've managed to hire that talent. By the way, quite a few of them, we managed to hire. They received much higher offers from other companies, and I'm really glad that Weebit has already the reputation of being a fun place to be at and an amazing team that these guys can come to and learn from their peers. People have accepted offers from Weebit even though they weren't the highest salaries, et cetera. It is a challenge. We still need to hire a few more people. The market is a little bit better now.
I mean, you know, with the current market situation, many of the big companies have been laying off. In Israel, the tech sector still needs so many more people that anyone that's laid off, you know, within a week or two, they already have a job. Yeah, we're working on it. You know, those few, we have two, three positions right now that I really wanna fill. Yeah, we're not gonna compromise. I mean, the one thing is I want the top talent, and we will get the top talent and, you know, continue to work there.
Thanks. You were talking about the iPhone 14 and the ReRAM in that. How important is power consumption in a mobile phone? Because the screen consumes most of the power. Is it? Have you evaluated the iPhone 14 and seen how it performs?
How important is power in cell phones? I think anyone here in the room will tell you how mad they get when the cell phone runs out of power before nighttime. You know, anything that can help extend that. You know, David has more experience than any of us here in that, you know. The moment that you give people a new added function, if it's a faster processor or if it's a lower power memory, you know, that'll be used by someone. We don't know the details which chip exactly in the iPhone 14 is. The indications that I get are that it is in the power management of the iPhone 14, where theyj're using the ReRAM right now.
What's the relative importance of power consumption in a chip compared with the screen?
I don't think I can answer that. I don't know if David you. I don't know to say.
It's difficult to say. The screen could be something of between 30%-50%. You know, the screen is always working, but the processor and communication works even when the screen is off. Power consumption is not just the screen. Screen is very important, but everything is important. One of the biggest problem is what you call power management. What power management is that you want to turn off any activity when it's not operating. By the way, the best engineer, God Almighty, that's the way he programmed us. When we sleep, we take much more power than when we running a marathon or doing a sprint. People are trying to imitate that using any device that they use.
Power is very important because when the screen is off, and they're still communicating, collecting data, storing it in memory, doing a lot of stuff, it's very important. People will work on any milliwatt that they could save on this one. It's also the size is important. We want to pack as much data into it. Battery life is also important, but also warming up. You don't want to hold this one in your hand and get burned. It's not just the overall battery utilization, it's also how much heat is being developed when there's an operation. You cannot have a fan in a phone.
First of all, how is your physical and mental health going, both of you, David Perlmutter and with all those-
Unfortunately, I don't get to do enough sport as I want to. I mean, that's one thing that, you know, with Weebit, I end up waking early in the morning because I need to see what's happening in Australia.
Fair enoug..
The whole day. That's one thing that I really wish I had more time to do some sport.
Oh, that's fantastic. Following up with the other gentleman's question up there, with employment and retention of employees, how do you see yourself in Weebit when we hit that stage of discrete and in long term, like five years down the line, do you still see being in Weebit?
Well-
When we hit the IoT, you know, when we are in the discrete market and as well as the AI market at that further along, do you still see yourself in Weebit?
I think, you know, what drives me more than anything is, A, you know, just the excitement of holding that wafer, you know, seeing that wafer, the achievement. You know, being in a smaller company that's growing, you have constant challenges and the that thrill of achieving things that people are telling you are impossible or, you know, making that next milestone, that's what drives me. Okay? I wake up in the morning and I get full of energy. I have to say, this room drives me. Okay? Looking at all of you guys and knowing how you guys are supporting us, and you guys have been with us also in the down periods. A lot of you guys I know for many years already, right? You've been there and you're supporting us.
I mean, what I'm getting back from you guys is feeding me. At this point, I'm just focused on doing the work. I don't have any thoughts about leaving Weebit at all. I mean, on the contrary. By the way, many of you might not know, I'm actually, David, Ashley, you know, we're in the top 20 shareholders of Weebit. Okay. You know, I put a lot of my personal money in Weebit because I honestly believe in this company, and I really wanna see it succeed, you know.
David Johnson. Coby, can you tell us the timescale from signing your first customer agreement, putting aside NRE revenues, how long till you get to licensing revenue from a customer agreement? Does that timescale change, you know, at the tenth customer and the fiftieth customer compared to the first customer?
It's actually, I'm glad that you raised it because I didn't talk about the business model, and I know that many people get confused. Let me go step by step through it. You know, we have a triangle. We have the foundry, we have the product company. Both of them need to license technology from Weebit. Okay? The foundry needs to get a license to manufacture. The product company needs to get a license to design. Okay? That first step is, you know, when they engage, they need to pay a certain license fee. Now it's true that with the first customers are always a little bit different. Some of them will put some conditions on that payment and things like that. I'll talk about the general case. The general case is you sign an agreement, you get paid license fee.
Now, with many of the customers, especially in the beginning, you know, they're David calls it high-touch customers. You need to really work with them. They will come to us and say, "You know, in our design, we want to modify the module a little bit. We need it a little bigger. We need a different type of interface. We need this, we need that." So they will want us to do some engineering work to adapt the module to their needs. And they will need to pay us what's called NRE, non-recurring engineering, for that work. And, you know, that's being paid through the project as we hit milestones, et cetera, et cetera. By the way, in the beginning, you do a lot of that manually.
As we move forward, our team, our VP R&D, has a lot of experience in building memory compilers so that it's gonna automate a lot of that work moving forward. It's not gonna be like, oh, you have 1,000 customers, so now you need for 1,000 customers to manually adopt that module. It's gonna be much, much, much more automated as we move forward, but they'll still have to pay us that NRE fee. It doesn't matter if it's manual or automatic, they'll need to pay us. Then the next step, which is maybe the most important one, is getting royalties on the sales of those products. Now, there are two ways that this can happen.
Some customers, and especially as we move forward, and we have different versions of modules sitting on the shelf of the foundries, customers will just like they go and they say, "We want that processor, that Bluetooth," they'll say, "We want the Weebit module X, you know, that one." They will not be in direct interaction with us even. They will just be working with the foundry. The foundry uplifts the cost of a wafer for those customers, and then the foundry will be passing on to us the royalties. If we're working, you know, with the bigger guys, when we work with them, normally we'll be engaged directly. In that case, the royalty will come directly from them as a percentage of the chips that the chip revenues that they have.
At the end, no matter how you look at it, we get royalties. Okay? The process is, you know, they need to decide that they want to use our ReRAM. They need to decide that before they start working on their product. Then they design it into the product, just like they build the whole product, and part of one component is our memory. The design process, it really depends on the application. It really depends on a lot of things, so geometries, et cetera, et cetera. Orders of magnitude are, you know, the very simplest designs might be, you know, six or eight months, more complex are a year. Some are 18 months to design before they actually go, they manufacture.
They need, by the way, every new device, every new chip needs to be qualified because, you know, that chip is different, and they still need to show that it's ready for mass production. They go also through the qualification. At the end of that process, that's when they start to mass produce, and that's when we get the royalties. There is a delay until you get the royalties. You know, when you get it's a steady stream as they sell that product.
I was wondering if you could please speak to the semiconductor sort of trade war going on and whether that will restrict the company's prospects in the future, depending on what decisions you take?
Again, another very important question in this time and age. You know that back in 2019 we had much more of a focus on China. You know, we even had a few announcements on work with China. You know, we were starting to sense that it's starting to be more risky. You know, part of a key job, a key part of the job of a CEO or chairman is, or the board, you know, is risk management. It became clear to us that continuing the work with China is high risk. Now, the Western world, there's huge potentials in the Western world. I mean, it's not like we're gonna run out of potential in the Western world anytime soon.
Big tier one fabs, maybe a couple of them are in China, but the others are in the Western world. There's a lot of work to be done there. Right now, it's not limiting us at all. The fact that you can sense that we kind of chose sides with the Western world. It's not that we disengaged from China. We still have communication with Chinese foundries, with Chinese customers. But to be honest, it's, you know, it's kind of on hold, very, very little communication. Our focus right now is SkyWater and the tier one fabs that are Western and, you know, there are a lot of big guys there. There is a risk, by the way, talking about TSMC. Everyone's talking about the risk of China invading Taiwan, et cetera. When it'll happen, it's, you know.
One of the biggest risks there, and one of the reasons why everyone is talking about it is two of the top five foundries are in Taiwan. There's TSMC, which is the huge one. There's UMC. You know, if something happens, it's a big risk to what's gonna happen with them. I mean, the world is basically gonna come to a standstill, you know, because they manufacture more than 60% of any semiconductor that you guys have, the cell phone or whatever. By the way, that's causing many people to reconsider if they wanna work just with TSMC or maybe have a second source of one of the other foundries. In that sense, it's kind of even giving us a boost that we're talking to the other foundries.
There's another question here, but we're just gonna multitask because the AGM still hasn't formally closed.
Oh, sorry.
Ballot box is going to be passed along. If you've got a green voting card, if you could fill it out and put it into the ballot box. Otherwise, we'll just continue with questions.
Sorry.
while we do that.
Okay. We said that the presentation might be at the end of the AGM, but never mind. Yeah. After. Okay.
Cheers, Tobias. Matthew. My question is around the 22 nanometer. That's something that's really come along this year pretty quickly. Couple parts to the question. You have indicated that the tape-out will be by the end of the year, if we can just confirm that. The second part of the question is, it seems to be industry-led as opposed to us pushing it. If you could talk to me there. The key part of the question really is the significance. I'd love you to talk to the significance of that to the non-volatile memory market, and then obviously to Weebit with that sort of quality of partnership that we'll be linking in with.
22 nanometer is already a very advanced node. I mentioned that there are less than 10 foundries in the world that know how to manufacture in 22. That's of course a very important milestone for us. I currently cannot talk about which foundry and what exactly is going on there. Again, you're talking about something that's very advanced, and the mere fact that we'll be taping out there, you know, it's catching attention. It's catching attention of many people. Okay. We didn't check on questions online, by the way. I guess you're multitasking as well, but.
No.
I just realized that.
We have to check online, too.
Yeah, check online, and then we'll need to see at a certain point. What? Are there questions on the phone?
There are no questions on the phone at this time.
Okay, Eric is checking online.
No questions online.
No questions online? Okay, good. Okay. Yeah.
Do you have any photos of your lab business?
Actually, I don't. Good point. Our marketing team needs to work on that. Yeah, I have the wafer I mentioned, you know. Once we close the AGM, I have a wafer. I actually have also a chip here. I haven't showed it to anyone yet, but it's here to show you guys. So I won't forget, you know, we have some giveaways back there. Yeah. Let's call. I think we're ready to finalize. I think let's see. Disclaimer. Oh, sorry. The disclaimer. You guys know the disclaimer. Okay, you guys already voted and given your ballots. Okay, we have questions. I think we can formally close the AGM. Thanks, everyone, for coming. Actually, you know what?
In the spirit of these days, can I take a selfie with everyone in the background? That would be a nice picture to put on the website. Just a second. Let's do something like this. There we go. Okay, thanks.