Smoltek Nanotech Holding AB (”Smoltek”) announces an update and a clearer definition of the company’s strategic objectives, with continued focus on industrialization and commercialization within its two business areas ultra-thin wafer based capacitors for the semiconductor industry and high performing cell material for electrolyzers used in hydrogen gas production.
Assuming that the company is able to sign commercial agreements with industrial partners, as well as finance and complete the phases described in these strategic objectives, the company sees potential to complete the industrialization of processes for high volume production as well as the first generic product, in 2024 within the business area ultra-thin capacitors for the semiconductor industry and in 2026-2027 for the business area high performing cell material for electrolyzers used in hydrogen gas production.
Smoltek’s strategic objective is built on a structure for refinement of business opportunities and customer utility based on the company’s unique patent portfolio. Since Håkan Persson assumed the CEO position in October 2021, the company has continued to work on its ongoing effort to industrialize and commercialize its two current business areas – ultra-thin capacitors for the semiconductor industry and high performing cell material to PEM electrolyzers (proton exchange membrane electrolysis) for hydrogen gas production. At the same time, the company’s strategic objectives have been updated, which has resulted in a clearer description of the company’s path to commercialization.
To be able to achieve these strategic objectives it is required, per business area, that the company is able to sign commercial agreements with industrial partners and that the phases/interim goals described can be financed and completed within their set time frames. Smoltek will follow up on the company’s updated strategic objectives, current phases and interim goals per business area in the company’s quarterly interim reports to provide the market with an updated and fair overview of the company’s potential to reach the market and to describe the factors of uncertainty and risks that exists in each of the business areas.
Smoltek’s CEO Håkan Persson comments:
“Smoltek continues to evolve from an innovation company to an innovation driven industrial company, and we are now taking yet another step in this direction by more clearly defining our strategic objectives within our two business areas. For us to be able to offer complete production processes and products adjusted to meet customer requirements, in addition to licensing our concepts, is something that we see a clear demand for among our collaboration partners and potential customers, in particular in the semiconductor industry where we are closest to reach the market. And this is something that we are now creating the possibilities to be able satisfy in an excellent way, assuming that we are able to complete the phases and interim goals which are defined in this updated strategy. To control the production process in collaboration with subcontractors and sell products in large volumes is at the same time creating a very strong financial potential for us. We will however continue to use a licensing model in cases where this is deemed to be the most beneficial approach. It is also important to highlight that the production processes that we are now creating have excellent potential to be expanded to more products within existing business areas, and also to more business areas over time.”
Business area: ultra-thin capacitors for the semiconductor industry
Smoltek’s ongoing industrial evaluation collaboration with a large global manufacturer of capacitors, conducted in the Group company Smoltek Semi, reached a new phase during the spring of 2022. On April 29, 2022 it was announced that the agreement has been further extended, until the end of June 2022. Furthermore, it was announced that the partners has initiated negotiations on a Memorandum of Understanding, MoU. This MoU covers joint development of an industrial mass production process for Smoltek’s patented, ultra-thin carbon nanofiber (CNF-MIM) capacitors. The companies expect to reach an MoU by the end of June 2022. Smoltek has a very positive view on the possibilities to reach a commercial collaboration with this partner. The MoU covers the company’s first product, ultra-thin decoupling capacitors for application processors in for example mobile phones, based on the extensive evaluation and development work carried out so far within the framework of the existing collaboration.
The market for application processors is growing in line with the market for mobile phones. The number of application processors produced is in the magnitude of 1.5 billion units per year, with an expected annual growth of 3.6% according to market data from Strategy Analytics (Smartphone Apps Processor Market Share Tracker Q4 2020: 5G and 5 nm APs Drive Growth). Every application processor requires 5-10 decoupling capacitors. This means that the market for these capacitors is deemed to consist of 7.5-15 billion capacitors per year.*
Smoltek ordered an industrial machine for large scale manufacturing of carbon nanofibers during the first quarter of 2022, with the aim to install it at a contract manufacturer (foundry) in 2023. The industrialization of production processes as well as the first generic product is continuing as planned and is currently in a design phase with planned completion in 2023. The design phase will be followed by a planned engineering phase and a qualification phase, which are planned to be completed in 2024. The company’s aims to be able to start accepting volume orders by the end of 2024. The work is based on the requirement that the company is able to secure a complete supply chain for the production of ultra-thin capacitors. Smoltek’s process step and supply chain for the production of these capacitors will also, assuming that the first product model can be completed, be able to be used for volume production of more upcoming products within the capacitor family for ultra-thin capacitors.
Smoltek’s objective is to complete the commercialization of the first product within the family for ultra-thin capacitors together with a large manufacturer of capacitors, which will then be able to buy the product in large volumes for integration into its solutions and customer offerings. Smoltek’s medium term objective for 2027 is to reach a sales volume of 400 MSEK for its family of ultra-thin capacitors, with an expected gross profit margin of approx. 20%, which corresponds to a market share of around 20% of the addressable market.*
To be able to handle a continued substantial industrialization and commercialization process in this business area, Smoltek has created a recruitment plan for Smoltek Semi. This recruitment plan covers an ambitious expansion of resources in 2022-2024 within in the subareas: Sourcing, Supply, Quality Assurance, Product Management, Industrialization, Customer Engineering, Customer Projects and Business Development/Sales.
All of the above phases and interim goals within this segment of the press release are subject to risks. Risks related to Smoltek’s ability to succesfully sign an agreement with a commercial partner and the financing and completion of all of the phases and interim goals in the development before large scale production and sales can be initiated. Smoltek has conducted extensive research, development and tests related to its technology and the industrial machine’s expected capacity and performance. Ordering the industrial machine and scalng up the production process is subject to risks related to the financing required to purchase and fully equip the machine for mass production, as well as its actual capacity and performance. Delays regarding the time frame or adjustments of phases or interim goals could occur, and Smoltek cannot guarantee that these phases, interim goals and objectives can be completed and that any income from externally financed process development and/or sales revenue can be received.