Richard Shannon: Okay. That’s helpful. Let’s see a question or two on STMicro here. You talked about, I think, the last couple of quarters about – and one of the next major steps here is getting a PDK frozen. Is this something you have visibility into from STMicro and have any expectations on timing for that?
Scott Bibaud: Yes. I think – we definitely have a view into their development process. We don’t have a very clear view into their exact schedule. And if we did, they’ve asked us not to share that publicly, so we won’t be able to provide guidance on exactly when those things get done. But I can tell you that we’re on track. When we shared in prior presentations, kind of a time line and the process, like we had some graphics that we’re showing the process; that’s a standard process that people would use in the industry kind of a standard time line. I still think that, that’s very reasonable. And one thing that both we and ST have agreed that we can say is that we’re on track to that process.
Richard Shannon: Okay. Alright. Fair enough then. Scott, I probably missed writing down the exact language you had on the topic of RF SOI, but I think you said something along the lines of you’re running wafers at most of the manufacturers out there. Maybe if you can repeat that passage and then help us understand the point of that comment, please.
Scott Bibaud: Yes. So, the RF SOI market has got a certain amount of manufacturers that really constitute the bulk of the capacity that’s available in the industry. And today, we’re working with the vast majority of them and starting wafers with a lot of them.
Richard Shannon: Okay. Okay. Fair enough then. Let’s jump over to the large analog player for which you’ve got a license for MST CAD here. I guess just what do you kind of see as the outcome for this work? I think Frank mentioned effecting a license – to generate license revenues throughout this year. I’m not sure if that implies stopping after that point. But what do you expect to be the outcome or hope to outcome here? And when will that happen? And does Frank’s comment about revenues lasting through this year imply it’s not going into next year? And is that the – an end point of the work, or just want to correlate those two comments and understand the dynamics there.
Scott Bibaud: Yes. Okay. I apologize if that was a little confusing. So just our MST CAD tools, we licensed to customers just like Cadence or Synopsys, would license their tools to customers. In this case, we have this customer who has signed up for a one-year license with it. It doesn’t mean they’re going to stop at the end of the year. It just means that, that is a contract that we have in place that would be extended as we got closer, just like most simulation model licenses. And what does that mean? Well, what it means is this large customer is doing work on their next-generation process, and they’re adding MST in to see if that makes sense for them. And they’re adding it in at the simulation level and so then it’s easy for them to try a bunch of different things.
We can give them advice on different ways of integrating to get different levels of performance improvement. And when they have seen results that they think they like then our next goal would be to get them to take an installation – a manufacturing license and install it in their fab and actually start running wafers inside their own fab. They could actually do demos with us where they send us wafers and then they run wafers in their fab, but we’d be really encouraging them to install. So that TCAD license is kind of a first step in that direction.
Richard Shannon: Got it. Okay. That’s helpful. Maybe moving over to the first JDA partner here. It’s obviously been in place for, I can’t remember how many years. Like 2 or 3 years now. And I think last quarter, you talked about some strong engagement that was slowed down by the holidays, and you seem to – I can’t remember the exact language you’re looking at my notes here. It sounds like there’s some strong interest from business units here, but no decision made. Maybe you can give us some sense here of some back and forth in more iterations happening that you weren’t expecting? Or maybe just kind of help us out relative to what sounded like you’re getting fairly close to a next step several months ago?
Scott Bibaud: Yes. Yes. I think it’s a very frustrating situation. We did a JDA with these guys a couple of years ago. They gave us a set of specifications. We met all of those specifications. And so, then they said, okay, we’re going to present this to our business units to consider adopting. We have been working with a number of their business units. And last year, they gave us a whole bunch of other tests and specs that they wanted us to run wafers for and do simulations to prove that we could solve them, and we did by the end of last year. We pretty much provided all of that test data. They reviewed, they agreed that we had met all of it. And so now we’re in this very frustrating phase where they’re saying, yes, your stuff seems to work well but until we kind of identify this timing when we’re going to make a change to that particular area, then we’ll decide whether we’re going to adopt it or not and do a license.
And so, we’ve been going back and forth with them on this for months. It may – I think there may be an impression because we can’t give many updates on it that we’re not doing, but we literally are talking to these guys constantly. And right now, we just haven’t gotten to the point where we can announce that we have an agreement. So yes, it’s frustrating for us, and I’m sure it’s very frustrating for investors. It looks like we’re not doing anything. We’re doing a lot. We just haven’t gotten it over the finish line. And I don’t think it’s that unusual. If you look back at our STMicro engagement, we really by, I think 2020, we had shown them all the data that they needed to do an installation and get started, and it wasn’t until 2023 that they finally did a license with us and got started on that.
So, to a certain extent, you have to be prepared and sitting on the shelf when they’re ready to grab something off the shelf and put it into place.
Richard Shannon: Okay. Fair enough.
Scott Bibaud: And typically – When we – typically, when we do a license with a customer, we ask them to pay an upfront license fee when we sign. So, if you’re going to need to do – use the technology in a year, why would you do a license right away, right? So that might be a little bit of a holdup as well.
Richard Shannon: Okay. Okay. Fair enough. I will jump out of line here, but probably come back in, but thanks for all the details, Scott.
Scott Bibaud: Okay.
Mike Bishop: Okay, Richard, thank you. Looking at some of the questions coming in on the Q&A chat, the first one regards STMicro, which is when ST makes the next milestone, what will the scale of fees that Atomera will receive?
Frank Laurencio: Happy to take that one. We’ve said since the time that we signed the – and announced the signature of the deal that it was consistent with our model for licensing to customers, and we expect the total fees to be in the neighborhood of $3 million for all stages of licensing. And this is consistent with that. So, you can do the math based on the revenue recognized already, which was $550,000 last quarter and $150,000 that we had recognized originally when we did the integration license with them several years ago. So, this is pretty significant in terms of revenue. And when I talked about the inability to give revenue guidance, it wasn’t – I wasn’t implying we didn’t know how much it would be, but rather it’s not something that I can give guidance on the timing of when it’s going to be recognized because we – our policy has always been to guide only for the next quarter until we have solid visibility beyond that.
And we don’t have that kind of visibility yet. But when we get closer, we will, as long as it’s consistent with our confidentiality with them, we will give guidance when we get closer.
Mike Bishop: Okay. That answered the next question about timing for ST. You answered that quite well. So, another question that came in. Are the record number of commercial proposals for manufacturing and production licenses, are they for manufacturing and production or just integration license?
Scott Bibaud: Yes, I will take that. For the most part, we are trying to push customers to install, and they are – most of our customers are used to working with the big tool manufacturers. And typically, if a tool manufacturer comes in and says, hey, I have got a new tool that will solve some problems for you. The way that works is they usually ask the tool manufacturer to do a number of demos for them first. So, they – the tool manufacturer will do demos back at their fab and send them wafers. Some of them have that mindset with us. And for them, we would have to do, try to do, an integration license before we get to manufacturing. But our goal is to try to get people to install and put it in their fab and start manufacturing those wafers as soon as possible. So, I think all of our proposals that are outstanding right now include are for manufacturing licenses, but I won’t preclude the fact that we might have to do some demos before we get there.
Mike Bishop: Okay. Have there been serious talks with wafer suppliers about a deal for a blanket MST wafers on RF SOI?
Scott Bibaud: Yes. The answer is yes. That’s something that we have been talking about with various wafer suppliers for some time. And I think we don’t have anything to announce on that just yet, but we do believe that when we are in a position where one of our RF SOI customers is ready to make a decision to go to production, I mean which means there will probably be another year or 1.5 years at least before they go to production, we will be able to arrange for a wafer supplier to deliver MST RF SOI wafers to them, if that’s the path they want to go down. So, that is definitely – we have done the pre-work for that, and I think we could put that together. Just to be clear, we also make it available to our RF SOI customers that they can buy RF SOI wafers and deposit MST on them themselves and then they license that from us. So, there is lots of ways in which it can work.
