Atomera Incorporated (NASDAQ:ATOM) Q2 2019 Earnings Conference Call - Final Transcript

Aug 07, 2019 • 05:00 pm ET


Atomera Incorporated (NASDAQ:ATOM) Q2 2019 Earnings Conference Call - Final Transcript


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Scott Bibaud

a demanding period with many trips to share our results with both new and existing customers and with further efforts to react to their feedback. The customer interest has been gratifying and the resulting development work looks very promising.

I will share with you some of the more compelling technical results later, but first, let me cover our customer activity. In Q2, after publicly announcing our breakthrough results, we were able to meet with most of our existing customers and to discuss the data and to plan for future work together.

In addition, we were able to meet with several new customers who are now either in the early stages of discussion or have already started planning to work with us. As a way of illustrating our progress, Atomera represents customer activity with the phases of engagement shown here.

Phase I includes customers under NDA who are planning an evaluation of our technology. In Phase II, we deposit MST film on customers' wafers and conduct physical characterization. Phase III is where our customers incorporate MST on their wafers during an R&D run in their fab and use the test results to justify licensing our technology.

It is generally in Phase III, that we are most likely to sign license agreements with customers. Phases IV and V are where our customers install our technology in their fab, execute manufacturing and distribution licenses and transition to production.

Atomera gets revenue from three sources; Engineering services revenue, which will grow as more customers pay us to conduct MST deposition runs; license fee revenue, which up to now has been limited to payments from our first two licensees, STMicro and AKM, but will increase as we sign more license deals; and finally, royalties generated by the sale of licensed MST wafers and chips.

During the last three months, the interest from our customer base has been outstanding. We have had two new customers start planning wafer evaluations with us. Two customers move on to Phase II and one customer move into Phase III. Each of these moves was a direct result of the technical results we spoke about in our last call.

In the world of process technology where decisions and progress can take some time, this is all happening very fast. As a result, I'm pleased to report that we now have 24 customer engagements underway with 19 different customers, which is a larger number of customer's engagements than ever before.

Two other interesting trends are emerging as well. First, the publicity around our breakthrough results has generated inbound interest from customers we've never approached before and should help us to grow the total number of customers and engagements in the coming quarters.

Second, we are starting to do work with a number of fabless semiconductor players, who hearing about these breakthrough results have begun to ask their fabs to implement the technology for them to use. This could be a very important development. You can imagine that if an important customer requests