Weebit Nano Limited

Okay, good afternoon and welcome to the WeBitNano Meet the CEO Investor webinar. My name is Danny Younis and I help with investor relations for WeBit. With me this afternoon, in fact, in the morning in Tel Aviv, we have the CEO of WeBit, Kobi Hanock. Hi, Danny. Before I hand over to Kobi, just to note that we'll be having a Q&A session at the end. If you have any questions, please type them into the Q&A box at the bottom of the screen. We're expecting a lot of questions to come through, so preference will be given to questions with a name attached to them rather than anonymously. I would now like to hand the webinar over to Kobi. Please go ahead.

Hey, Danny, and hi, everyone. Good afternoon. I'm glad to have you all join our quarterly Meet the CEO. I think last quarter was really a great quarter. We've gone through a tough 2024, as everyone knows. trying to get deals done with some of these big foundries, big IDMs for a long time. It's been a challenge. And I'd actually like to, before I focus on the last quarter, I'd like to go through a little bit of history and a little bit of what's going on and where the market is actually. And many of you know, it's a long time ago, over 15 years ago, the market already realized that Flash is basically going to hit its limits. And since these technologies take so long to develop, there were a lot of attempts to develop a replacement for Flash. And, you know, in those days there was FE RAM, there was PCM with different variants of 3DX point and Optane, and there was MRAM and there was CBRAM and there was, you know, all kinds of technologies and of course, ReRAM. Over the years, what we saw is one by one, these technologies kind of fell off the table. There's always someone who's still trying to make things work, but in general, the ferroelectric RAM, the PCM and all the different variants of it, Today, you might see one company trying to still make it work, but it's not really anything that the market is considering serious. The two last technologies standing were actually MRM and DRM. Now, MRM You know, five years ago, it was already in mass production. It was in a good position. I think the market basically assumed that's it. We found our winner. We found the technology that's going to work. But, you know, as they started to manufacture, they realized it's very expensive, you know, much more expensive than flash and definitely even more expensive than re-ramp. There are all kinds of other issues with it. It uses rare earth materials and things like that. But I think the key issue came up once these products hit the road and they were used in the market. The M, as everyone knows, stands for magnetic, and you'd be surprised how many magnetic fields we have around us. So some of these products ended up failing in the field. And they basically had the memory erased by some magnetic field somewhere. And that triggered the biggest consumer companies in the world to basically say, hey, our products are going everywhere. We really can't control where they are. This is a big risk. And they passed a very strong message to the market that they're not going to use MRAM. Now, the way that this was reflected in the market was just a year and a half ago when TSMC released their NVM roadmap, it was still all MRAM with re-RAM just as a side note. But last June, it was basically updated and now their NVM roadmap is all re-RAM with NVM as a side comment. And I think that reflects the whole transition in the market. We've gone a long way. But we finally reached the point, and it's really last year, that the market understands ReRAM is really it. It's not like MRAM is going to disappear. MRAM has its place, and people have already invested, and it's going to be used. But ReRAM is much cheaper. It doesn't have all of these issues with magnetic fields and so on. It has the long list of advantages that we've talked about so many times in power and endurance and all these other things. And now it's ready for mass production. TSMC already has it in mass production. WeBit has qualified both at Atleti, which is basically ST Microwafers, and at Skywater. We have agreements also with DB Hightech. We demonstrated it on GF Wafers. So the market is basically waking up and saying, wow, this is the technology of choice. This is where we're going. and we bit has a good technology and last year we also demonstrated it already working at high temperatures and and we demonstrated high endurance and so on um and uh you know everything was uh basically lining up now the And we are, you know, if you look at the re-RAM space during these years, you know, the other re-RAM players, if it was the other smaller companies like Crossbar, Odesto, etc., you know, they basically disappeared. If it's the big players, you know, it's not a secret that even Intel and Samsung tried to develop re-RAM and ended up giving up. ReRAM is not an easy technology to develop and you really, really need a very strong team that will develop it. You need the strong device guys and process guys and analog and digital and test and characterization and everything. And you need them all to work very closely together. You need to have a very focused management. That's where the Intel and Samsung guys had their issues. You really need to have a very focused management that is driving this, that is working together, that is defining what to do with with trade-offs and so on. Webit really is, I think, the only company in the world which has all of these things together with that big focus. This is what we do. This is really our big focus. I mentioned it several times, we have 13 PhDs, actually the number is going to grow soon, focused on developing this technology. And today we are the only independent supplier of free RAM. So last year and even before that, in 2023, we were already engaged with so many of these big foundries, big IDMs, and they were evaluating and testing and even negotiating deals. But there was always that big concern about it's a new technology. It's a young company. They never showed their technology in mass production. And so everyone stayed on the sidelines. Yeah, it was driving me crazy. you would see that everyone was asking me, where is the deal? Where is this big deal? You're saying that you're talking to all these big guys and where is that deal? Well, you know, we were and we are continuing to work with these guys, but for them, it was a really big perceived risk. And so they were trying to do everything they could to continue to work with Flash and wait for someone else to make this step. Now, we ended up, you know, with last quarter, we were uh we were i think it was a great quarter for us it started with the semiconductor australia conference which i i really enjoyed going to um you know it continued with the race that we did uh you know i have to say an unexpected race kind of i wasn't really planning to do a race but When a broker comes and says, I have all this money underwritten at a premium over market, etc. I think it was a good raise for us. It really gave us now several more years of quiet so that we can really focus on... uh, on, on doing the work and, uh, you know, at the end of the quarter, as everyone knows, um, on semi ended up being the first one to cross the line. They, they announced their trio platform, uh, which is, uh, you know, a very nice advanced technology at 65 nanometer BCD. Uh, I mean, they, you go back, I don't remember when exactly, but, uh, several months ago, they, they had that big announcement. And they need advanced memory. You know, that's when you announce a new platform and everything already moving forward, you don't go back to a technology like flash. And so, you know, we had talks with them, you know, of course, just like everyone else, they had their concerns, but I think they saw that WeBit has such a strong team, is capable of really resolving any issues that will come up, et cetera. And I'm very glad to say we signed this agreement. This past month since we signed the agreement, has been phenomenal. They are so focused. This is such an impressive company. They are taking this project so seriously with so many people involved and we're running forward in parallel with the device and the process and the design side and the test characterization, everything. We have so many meetings and so many things going on in parallel. It's been great. And in addition, of course, the impact on the market has been great. The way that the market perceives Webit now has really changed. Last week, I got a phone call from a VP in one of the biggest foundries. I always call him up. Yes, we have good discussions. Yes, his team is really interested in our re-ram. you know, it's been more than a year that we're talking and analyzing and checking and, and they're hesitating. And suddenly he calls me up and says, Colby, you need to send us a plan. How do we, how do we ramp up on re-ramp? And, you know, that's like, wow, you know, suddenly they're pushing instead of me, you know, or they're pulling if you want to look at it. Um, so it's, it's that kind of thing. You know, I have so much travel now planned to meet so many of these, um, foundries and IDMs, etc. So the way that people are looking at WeBit is really changing. People are obviously now someone already took that first step. So it's not like everyone is rushing and everyone's now standing in line to sign the agreements, but they're definitely moving forward and things are moving easier. We were at the CES conference in early January. CES is a huge conference. I don't know if you can imagine a conference where 150,000 people get together in one place. It's a whole city just coming together. And we had amazing meetings there. uh with uh with people in the industry you know i got to meet uh of course uh a lot of the on semi guys there the ceo of on semi etc uh but you know other customers our potential customers to be exact uh we met many customers many bankers the leading bankers in the world um were there there was a lot of excitement around it you know i I had one analyst actually last week tell me, for so long, there were so many players in this, emerging nvm space and and i've been following it for so many years and suddenly you know it's it's we bit you know it's uh so it's exciting times uh i'm really excited about um uh on semi they're an amazing partner uh we're continuing of course to work with db high tech and and they are a great partner and and we really uh are are enjoying the work with them and moving forward uh and i think 2025 started with a blast and there's so much going on. It's known that my entire compensation, equity compensation for this year is tied to closing deals. And I definitely plan not only to achieve my target, but to even go over it. And I think there is a potential for that. We're very focused on this. We have the team is all excited and ramped up. So yeah, I think 2025 is going to be an amazing year. Yeah, so I don't know. I think at this point, I know many people have questions and I'll open the floor to questions. I'll be glad to answer.

Sure. Thank you, KB. We will now move to the Q&A session, as KB said. Look, once again, if you have any questions, type them into the Q&A box at the end of the screen. We do have a healthy number of questions coming through and I will try and ask them all. A reminder, we will be giving preference to non-anonymous type questions. Okay, Kobi, the first question is around global foundries. So can you maybe just give a brief update on WeBit's dealings with global foundries?

GF is an interesting case. We, on the one hand, we manufactured, as everyone knows, we manufactured our re-ramp on their 22 nanometer wafers. We're continuing, by the way, to manufacture there and to test and improve the technology. In parallel, and I think everyone knows already in 2023, they announced that in the beginning they acquired what was left of Adesto's CBRAM technology. And there has been a pressure internally in GF to try to develop Pre-RAM on their own. So it's kind of going in both directions. I think at this point, WeBit has a lot of potential with a lot of foundries and IDMs. GF is one of them. The others are very focused on working with WeBit. With GF, it's not really clear where this is heading. So we're We're continuing to manufacture there, but I admit my disappointment that they are still trying to develop their own version and we'll see what happens there. I don't know where it's going to go.

Okay, the next question is about the recent capital raise. So, Toby, you've now secured enough liquidity for a few years of runway following that capital raise. What continues to drive you and the leadership team and what keeps you motivated?

Oh, wow. I've never been so full of energy. I think it's, you know, this is the point in time when you look forward and it's just amazing. I mean, I couldn't have dreamt of such a situation. There's this huge vacuum out there. The market basically decided it wants RERAM. RERAM is the future. Yes, a lot of people are still hesitating. This is a very conservative market. uh industry believe it or not because of the huge amounts of investment so companies invest billions in building these fabs and and in everything and and so much is at stake you know even the trio platform when you think about it when they made the announcement you know they they kind of said in their announcement that it's uh you know it's a trillion dollar uh uh type of uh project for for on semi and um You know, so it's people are not rushing through. But at the end of the day, there's this huge vacuum. Everyone knows they want reram. They need reram. Everyone knows they're going to be using reram. And Weebit right now is the only independent supplier of reram. And because it takes so long to develop re-RAM, you can look around and see that, I mean, I basically cannot see any other company, independent company that is going to have re-RAM anytime soon. Someone might have it, it might be in stealth mode or whatever. It's very hard to keep these things as a secret. So right now, Webit really needs to rush in and go and take as much as it can of this vacuum. Nature does not support vacuum. Wherever there's vacuum, it has to be filled. And we are now so totally focused on we have to fill this vacuum. There is so much. There are so many of these big foundries, big IDMs, these product companies that need a solution. And we have it, and it's just, you know, we need to overcome this inherent, you know, resistance of people being afraid of working with a younger company, with new technology, et cetera. But as we break this down, as we, you know, we now have DBH, we have OnSemi, will sign one or two others, I believe that that level of resistance will fall. And I mentioned in a couple of meetings the book, Inside the Tornado, or I'm sorry, Crossing the Chasm. That's the first book in the series. You know, it's a great book that I recommend people to read. It basically talks about how young companies that develop new technologies evolve. And I'm going to skip a lot of it, but there's the phase where you have this crazy idea for a new technology and you're developing and this, and then you finally have it ready and you want to go out and sell it. And you find out that there's this huge chasm and all of the customers are on the other side. And you go and you eventually manage to cross this chasm and you're coming out the other side. And in the beginning you enter what's called the bowling alley. You have you basically managed to find one company that already really needs this technology and, and, you know, sees that the potential benefits are so much higher than the perceived risk. And they, you know, they move forward with you. And, you know, so you, you have this DB high tech, you have on semi that realize just the huge potential of this technology and, and that it is something that they should go with. And so, you know, the first pin drops two pins behind it, and then those drop the three pins behind them and so on. So the book describes it in a nice way. You know, once you have a few pins falling down and you're starting to make that progress, there's, you know, what people call today FOMO, and suddenly everyone is there like, oh my God, you know, my competitors have it, everyone's moving forward with it, and I'm going to be left behind. And suddenly... you go into the phase, which is called inside the tornado. And, you know, suddenly everyone wants the technology. Now, I've been fortunate enough to be inside the tornado twice in my life. It is the most amazing feeling. It is the unbelievable what happens when suddenly you're swamped with people calling you up and wanting the technology and the And everything just starts growing so fast. Now, I can see that tornado out there. I can see the tornado out there. Could be 2026 or so. This year is still going to be a very hard year of going through that bowling alley, of getting a few more pins knocked down. And we're making great progress. And Dawn's semi-announcement already changed the whole atmosphere around WeBit. And we're going to get into that tornado. And that's, I mean, just waiting for that, not waiting, I mean, pushing for that to happen and running forward towards that tornado is really what's driving me. And it is so exciting. And I think the whole team feels it. The team is working around the clock now. It's amazing the amount of travel that I have. planned in the next couple of months. You know, I'm hardly going to be at home. My wife is going crazy. But I mean, that's part of, you know, starting to move in that direction. It's amazing.

Fantastic. Okay, the next question is around the size of the memory arrays. It's a rather long question, so I'll just truncate it. So basically what the question is, and I'll put a context around it. So many devices on the planet need much more than one MB or eight megabytes of NVM. Has WeBit produced a memory array bigger than the one MB?

So we need to make a clear distinction. between the embedded memory space and the discrete memory space. You're absolutely right. On the discrete side, we're using so much memory and AI and the huge data centers and whatever they need, giga, tera, and beyond. But in the embedded space, actually even one megabit is considered a lot. A lot of the devices need 256 kilo or 512 kilo. Weebit already has an array of eight megabits. which is very impressive and people are very impressed by it. We showed it last year at the Embedded World Conference and there was a lot of excitement around it. Most of the requests that we are getting are below the megabit level or at the megabit level, let's say, and we're feeling very good with it. We can go and develop even larger arrays, And some people have been asking us about larger arrays. So I won't be surprised if we go ahead and with one of these people end up developing something bigger. But in the embedded space, megabit is already considered a large array and something that most people are very happy with. Yeah.

Okay, very good. The next question is around remuneration, specifically yours, Koby. So can you confirm that your salary bonus this year is conditional on a number of signings by fiscal year or calendar year?

So my salary consists of three parts. There's the base salary. There's what we call STI, which is a target-based bonus. And there's the equity part. uh target based quote uh bonus as it's defined now we work uh on on a calendar year uh it's just so much easier that's how the industry works so we we just need to work with the industry uh so uh my targets uh our calendar year and we just actually the board is uh As we speak, the board is discussing my targets for 2025 and closing those. And so that's in terms of the target based. And by the way, the vast majority of my compensation is target-based and equity-based, which is intended to motivate me to meet these targets and to want the share price to go up, etc. The equity, as the shareholders know, is tied this time 100% of it, which is, by the way, I have to say, it's very, very unusual to have such a situation where the equity is tied to two milestones, not to mention to 100% of it, but the board knowing that everyone is so anxious to see deals signed. We had a discussion and I volunteered to actually have my equity compensation for the calendar year 25 be tied to closing deals. And I definitely intend to meet that target. And as I said, I actually want to overachieve that target. I think we can.

Okay, the next question, you might turn to your end customers, maybe a couple of questions on your end customers. So one investor is asking, three end product customers by the end of 2025 calendar year, doesn't sound like too many,

You need to remember that these end customers need a fab to manufacturing, and that's the big challenge. Actually, for me, the toughest and most difficult challenge of them all is these product companies. They will not really move forward without a fab where they can manufacture. Unfortunately, as I think everyone knows, Skywater has made a strategic decision to focus on their R&D services. If you look at their quarterly report, you'll see that by now they already got up to a point where 90% of their revenues are from R&D services and not from Foundry. It's their decision, very disappointing on my side. So getting a customer to manufacture in Skywater is a huge challenge. I'm not saying that we won't have it, and we are working on trying to get customers also for Skywater, but it's very hard to actually get someone over there right now with the current focus of Skywater. DB Hi-Tech, we are working on qualifying this year. We have wafers from DB Hi-Tech that we are testing now. We'll need to get to the point where we can actually start a qualification and then do the qualification. And as everyone knows, We're talking about many months of putting the chips in ovens, et cetera, et cetera. So again, most customers will not want to engage with us before we are actually qualified or very close to qualification. So the target of getting product companies is the most difficult one that I have right now on the list, both in my you know, target based bonus and with my equities. But we will we I you know, I, I want to make it clear, when I have a target, I achieve it, I focus on it, and I will make it happen. And we will, we will get product companies on board and working. Of course, OnSemi is great because it's an IDM. So I really believe that we'll have a product. We're trying to work with them now on defining a product that will use our reRAM. So I hope to have that as a first product, but we still have two others that we really need to work on. And again, my goal is to overachieve.

Yeah, so I'll ask the end customer question another way because follow-ups come through. So if the futures re-ram, Kobe, end customers haven't signed up yet to get a first mover advantage, but it sounds like some of them have gone through TSMC. So why can't you get the signatures?

Well, so first of all, we need the fabs. I think that's, uh, something that I already answered. Um, and, uh, you know, even TSMC, you know, look at the ramp up of free RAM in the beginning, everyone is, is hesitant. Everyone is, is, uh, you know, uh, moving a little slower, but you know, we've had, we've had, and we are having, and we're going to have a lot of meetings with product companies. Uh, I mean, uh, Just yesterday, I think the company had one or two meetings with product companies. Next week, I'm going to be meeting some CEOs and the next couple of weeks, I'm going to have several meetings with potential product companies. It's happening all the time now and more and more so actually. Again, the OnSemi announcement really triggered. And by the way, OnSemi, while it's an IDM, it does give some foundry services. And we are also engaged with people that are interested in maybe manufacturing at OnSemi.

Speaking of OnSemi, we'll ask a couple of questions around OnSemi. First one is, which particular product line has been decided with OnSemi?

It's under discussion and it's not public information, so I can't really go into that. I will make a general comment, you know, And this is just really a general comment and not an indication of the product, but OnSemi is well known for two main application areas. They are well known for power management. and they're well known in the automotive space. I think the key reasons for them to engage with WeBit were that they saw that we are very strong in both of these domains and give them strong advantages. And so that was one of the, if people ask, why did OnSemi make that step forward? It's because, on the power management and we've been talking a lot about power management recently that's kind of the really low hanging fruit where we have so many advantages with with rear am that it's uh it's really compelling for people to move forward and then the fact that we uh we demonstrated that we can work at 150 degrees which is really the the main requirement for automotive uh you know these two things together i i believe if you ask me i believe that those were the main

considerations of on semi when they decided to move forward that segues beautifully into the next question kobe so on semi holds the number one market position in auto sensors you mentioned that was one of their two major areas being autos apart from power management and the 150 degrees what are the competitive advantages of reran that make it so applicable to autos specifically

So, to autos, it's really the power more than anything else. I'm sorry, the temperature more than anything else. And by the way, we have people asking us about even higher than 150 degrees. We have people asking us about 175 and so on, which is really extreme already. I want to make it clear, there's really not a lot going on above 150. But we basically showed... the simulations and the analysis that we can achieve even 175. And by the way, once you go above 150, you stop talking about 10 years or this, you start talking about usage profile And how long does it have to stay at that high temperature and things like that? You know, a small anecdote. We had a mining company that needs chips in their drills and those drills get really hot. And they said, you know, we need something that can operate at very high temperatures. But, you know, it doesn't have to be for years. You know, even a day or hours would be good enough. You know, we will replace it. So, you know, you get to that point. But the temperature is a key criteria in the automotive space. On Semi, you know, with their sensors and so on, they need that. And they also, as I mentioned, the power management side of things and the fact that with 3RAM, you can have a one chip solution instead of a two chip solution, which is much more efficient and much lower cost, etc. I think those were the main criteria. Yeah.

Okay, there is a follow up question also on Semi. Okay, so post the on Semi announcement, why do you believe the market reacted so poorly? Do you think the market expected large revenue streams as part of the announcement?

Well, the market in general and the Australian market specifically is something that I never managed to predict. And it doesn't stop to even more than surprise, you know, astonish me. I don't know what the right word is, but I just. remain in awe sometimes. I really don't know the considerations and what drives the market and what makes people decide to buy or sell. In these kinds of deals, you can't and you don't want to. And I don't think the shareholders want us to give a lot of the commercial terms. At the end of the day, I think it's a great deal for WeBit. I think we have good terms. People will see during the year, as the year progresses, you know, the cash flow, the revenue, et cetera, implications of this deal. And, you know, so people will realize that it might be that, you know, because we didn't announce commercial terms, people thought that this might not be a significant deal or anything like that. I don't know. You know, you have these situations. I mean, on semi... let's face it, these big guys don't even like to have the press release. The fact that we actually had a press release is already a big achievement and a big success. Going into commercial terms is something that is just not done in these kinds of announcements. Throughout my career, Let's say on the sales side, over 30 years already, I've never done a press release where there were commercial terms in it. Doesn't make any sense. And I think the people who would be hurt most of it would be the shareholders, because once you announce commercial terms, you basically put a glass ceiling on your head and no other customer will ever agree to pay anything above that. They'll all use that as the starting point for negotiations. So, you know, it doesn't make any sense. I don't know why the market reacted this way. Maybe because the share price already went up quite a bit before that. Maybe the market anticipated it. I don't know. WeBit is going forward. There will be the cash coming in. There will be the revenue coming in. People will see the impact of this deal. I believe that I am a long term person, you know, I don't believe in the one day type of things, and people will see the impact, they'll see the additional deals that are going to happen. Hopefully, the market will reflect it. By the way, I, I want to comment on something, I saw this ridiculous comment somewhere, and I just have to comment on this. And by the way, it happened to me with DB high tech as well. So You know, I had someone ask me after the DB Hightech deal, so how much did Webit pay DB Hightech to close the deal? And now I saw a comment, again, I can't believe the ridiculous comment of, so Webit probably paid OnSemi to do the deal. So I just want to make it extremely clear. You know, OnSemi, DB Hightech, they are the customers. We're the vendors selling to them. it doesn't make any sense anywhere in any form for us to pay them anything. I can't even believe people think that we actually paid anyone for something like that. So I just want to make it extremely clear, you know, these are commercial deals where Weebit is the vendor, they are the customer, we're selling them or licensing our technology to them. And, and, That's it. Weebit does not play any kinds of absurd things like that. And maybe people thought that, oh, Weebit is using Skywater to do some R&D things. So I think I mentioned in the past that we have two separate agreements with Skywater. One is a foundry and one is an R&D center. which is a unique situation. Other foundries are just foundries. Skywater, for some reason, decided to focus on giving R&D services. WeBit is very happy as an R&D customer of Skywater. WeBit is using Skywater, I can even say intensively, as an R&D center. They compliment Letty. very well. You could say that the R side is done at Leti, the D side is done at Skywater. But that's a unique type of agreement. With Skywater, we have an agreement as a foundry and then a separate agreement as an R&D customer. DBH on Semi, they don't do R&D services and we have just simple, straightforward agreements with them as foundries. And I wanted to be very clear, you know, we didn't do any funny games there.

Now that's crystal clear, I think, Kobi. Just speaking about DB Hightech, we do have three or four questions on DB Hightech, but I'm going to put them in the one or maybe two, because they're all asking pretty much the same thing. So the target for qualification for DBH was June 2025. Is that target now sometime in 2025? Yes.

Um, I, uh, you know, I, yeah, I think right now I'm saying sometime in 25, just because, um, you know, we, these things are very tough and, uh, we have, uh, we have the, the first wafers that came out. Actually, we have very good results on these first wafers. Uh, the, the tests are looking good and, um, we were working very closely with, uh, with DB high tech to push this forward. So, uh, I mean, I, I believe. the, the qualification will be definitely before the end of the qual, uh, before the end of the calendar year, I'm sorry. Uh, but I just, I think that putting a specific target right now, uh, will not serve us, uh, will not serve anything. So we are focused on finishing it, uh, as soon as possible. And, um, I just, it's hard to say right now when, when exactly it will happen. So, um, We're saying 2025, but the goal is definitely not the end of 2025 and to try to get it done much before that.

And maybe a follow on from that and looking a bit more long term. So how long after qualification do you think it will take to close the first customer agreement?

Oh, that's that's the billion dollar question around that. We are engaged today with customers that are interested in manufacturing at DB Hightech. We even know that DB Hightech salespeople have already talked to customers about WeBit. So, you know, this is happening. The product companies, obviously they want to see more progress and they ideally would like to see qualification before they engaged. By the way, that's one of the reasons why I really want to finish the qualification ahead of the end of the year is so that we have enough time after that to close agreements with the product companies, going back to the previous question on product companies. So my goal is to finish the qualification definitely before the end of this year so that we have enough time to close product company agreements as well at DB Hightech. We do want to close agreements with product companies even before qualification is done. You know, these are very tough things to predict. We're doing our best. That's what I can say.

Yeah, thank you. There's a few questions also around the discrete selector development. So again, I'll just collect them into the one question. So can you maybe just give an update on the progress with regards to the development of a selector for discrete re-ram memory?

So Weebit is working on this. There's always some work in the background. I have intentionally put it as low priority right now. We have so much going on on the embedded side. And I believe that in the embedded space, we have this huge potential. I talked about this big vacuum that's formed in the market. We have so many of these big foundries and IDMs and product companies and Everyone is wanting Greeram. It's kind of the thing that everyone knows they need it, they want it, and they're just hesitating. We need to push them over the line. I really want the team to be totally focused on, let's fill this vacuum, let's rush in there and get it, get to that tornado and really grow. I think that's the number one priority for WeBit. By the way, there are several projects that are always being dealt with in the background. Things like the discrete, that's one example. We have other projects, neuromorphic, and people know that that's always in there in the background, and we are working with research institutes on these things. WeBit is now big enough that it can afford to have a small side activity on some of these strategic things for the future. But at the end of the day, I have limited resources, and I'm sure that the shareholders want to see the revenue ramp from the embedded and getting these big deals done. So that's really the big focus right now at WeBit.

Okay, you touched on Skywater. There is one or two questions on Skywater. Again, I'll merge them. So can you maybe just talk to the progress towards signing customers at Skywater?

So as I mentioned, There's a strategic decision at Skywater to basically move to be an R&D center. And again, 90% of their revenues now are already there. I remember last year I was talking about 75%. And I think you can see the big focus they have and how they're shifting now. The revenue from the foundry service, now almost all of it is coming from R&D. So they are lacking some basic elements in their foundry that we've brought, and I mentioned it in the past, we've brought some big names. product companies. I think I said in the past names that people in the street in Australia would even recognize. We brought big companies to Skywater who wanted to manufacture there with our re-ram. But they were lacking some basic elements. It just ended up not working out. The whole thing fell apart. Unfortunately, to my very, very big disappointment, But that's, you know, every company gets to define their own strategy and their own priorities. I haven't given up. I haven't given up. And we are looking for companies. We are talking to companies that potentially can manufacture at Skywater despite all the limitations. And, you know, right now, I mean, right now, the place where we're qualified is Skywater. I need to bring in three product companies, right? I need to try to make it work also at Skywater. So we haven't given up on it, but it is a huge challenge because they're lacking some very basic elements in their library that companies look at it and say, we can't manufacture. There's basic IP that's missing.

Okay, before I go to the next question, Kobi, just a note to all the participants on the call, we've got about 15 minutes to go. We've still got about 10 questions to get through, so we probably can't accept any more questions unless they're very important. Okay, the next question, Kobi, is around MRAM. So it's known that MRAM has some better performance characteristics than RERAM, but TSMC has now adopted RERAM. What's your ratio split between MRAM and RERAM?

MRAM has two advantages today. One is it's just more mature. It's already in mass production, it's already out there, it's running, and obviously that's an advantage. The second advantage is the endurance. MRAM manages to achieve higher endurance and some applications require that. MRAM has its place, it's not going to disappear. By the way, in this industry, you always have all kinds of technologies that are used for niche needs that have some unique advantages. A lot of people are still using rotating disks in the data centers and even magnetic tapes as NVM memory. I don't know to predict right now what part MRAM will have. I personally, you know, I'm tainted, but I personally believe MRAM will over the years shrink, the MRAM market share will shrink to specific applications and specific things. The numbers that analysts are bringing out are constantly changing also, and I haven't really seen a good analysis of it yet, but it is very clear now that the big focus, once TSMC moved all of its focus or the vast majority of its focus to ReRAM, WeBit is here pushing it. You can see that GF is trying to make You know, for some reason they decided to try to make their own version and, you know, we'll see where that goes. So there's, I think RERAM will clearly take the majority of the market. How big that majority will be, I personally think it will be a large majority, but I think the jury is still out.

Okay, there's a follow-up question on discrete. So, Koby, is there still an intention of developing a smaller discrete re-ram module that doesn't require a selector?

So, let me correct that question and use the right terminology. In a re-ram, you have to have a selector. what we're trying to do is replace the transistor with a smaller selector. So that is the goal of our discrete project. The re-ram memory bit itself is very small and because every bit needs a selector, and today we use a transistor as a selector, that's what makes it bigger, and that's what makes it not so ideal for discrete memories. So the re-RAM itself is good. We need to find a better selector, which will enable us to put the gigabits and so on on a chip. And that's what we're focused on. So yes, we are looking for ways to have a smaller selector. This is a huge challenge. It is a very big challenge. You know, much bigger companies than Webit have tried to find smaller selectors, more efficient selectors, and, you know, and failed. There were big projects of very big companies to do it. Having said that, we've been up to now managed to show that it can, uh, succeed even where the very big guys, uh, didn't. And, and we're going to be focused on it and we, it's going to take us, you know, it's, this is a long project. This is a project of years. The day that we do it, it's going to be, Oh my God, you know, because then, uh, it really will open up an even bigger market. Uh, you know, we're working on it. We will eventually we'll find, a good selector. And by the way, of course, as you can imagine, we've been looking at different types of selectors and we've been playing with this and going from one type to another and improving different things. So there's R&D work going on, a lot of exploration, and it's going to take us some more time. It's not a one or two year project. It's a long term project. There is that work. Again, it's low priority in the background. I want the team to focus on, you know, this embedded opportunity now is a once in a lifetime thing. And this huge vacuum that formed is amazing. We need to capitalize on that.

Okay, the next question is around re-ram and the use in products. So a while ago, Kobi, you talked about Apple, or you mentioned Apple using re-ram in one of their new iPhones. Are you aware of any other products in the market that are using re-ram?

We are aware. Some of them made it public. I think I mentioned Nuvoton. announced, I think it was eight, nine months ago, that they have a new microcontroller that has re-ram in it. They did a lot of A lot of marketing around the advantages of reRAM in their MCU. I think that the interesting point that I would like to point out here if I'm talking about it is Nuvoton is actually the owner of the technology that UMC is using. UMC qualified a reRAM technology and theoretically has it available. I'm not aware of any customer using the UMC reram. And by the way, Nuvoton themselves use TSMC for this MCU. So, uh, so there was, uh, Nuvoton announced that, uh, Infinium a few years ago already announced that all of the future automotive products, uh, automotive chips that they do will have reram in them. So there have been some announcements, uh, around this. Um, it's, it's, Ramping up, it's still, you know, the usage of free RAM is very initial. The ramp up of these things take time, but it's definitely happening.

Okay. A devil's advocate question from a pretty tough investor here. So let's say worst case scenario, Kobe, you have no signings this year. At what point would you start looking at cost cutting?

So let's start off with the fact that WeBit is extremely conscious of cash and of budget. Last year, because things took longer. I was really hoping that we'd managed to sign a big agreement earlier. As we saw that things are delayed, we were already cost cutting and we were saving budget. I think the board was quite impressed by how much below the planned budget we actually were in 2024 because I don't hire people before I know that I have the customer. We need a team for every fab and you know, there's a very delicate balancing act between being ready. So when you sign an agreement with the fab, you have the whole team up and running and ready and everything. And know not hiring people and then finding out that the agreement is pushed out three four six months whatever and you have a team sitting there idle so we are extremely conscious uh about budget um we every every po i can tell you just yesterday There was a request for a PO for $2,000 that we looked at and we said, yeah, it's nice, it makes sense, but no, I'm not going to sign it. We're not going to do it. Because we question every expense. The money that we have is money that we got from shareholders. it's not my money it's the shareholders money they gave it to me in order to achieve a certain goal in order to give them the maximum return and and we are very very cautious even in you know when we do travel i keep asking you know how can we cut down the costs of the travel how can we you know save money you know either find cheaper flights or or you know lower cost hotels and and so on It's all the time in our minds. It's not something that I need to wait for not having a deal done in order to think about it.

Great. We've got a few more questions to get through. The timing's pretty good. We'll maybe talk a little bit of some financial markets questions. Now, it's pretty clear the Australian market doesn't appear to understand the microchip industry properly. Would you be contemplating or considering moving to the NASDAQ where it's very much likely you would get a much higher valuation?

Well, as I often joke, if I would get $1 for every time I'm asked that question, I would never have to raise money. You know, it's the type of question that I'm asked all the time. And I'll tell you honestly, I mean, yes, the natural place for WeBit is NASDAQ. You know, that's kind of everyone tells me, what are you doing in Australia? Nobody knows semiconductor there. We are in Australia today. The Australian market, let's face it, it's, you know, people know that I have my issues with some of the regulation and so on. And I've been having, I have meetings with ASX companies. We've been talking to the ASX about it and so on. But at the end of the day, Webit raised, I believe, close to 150 million Aussie dollars on the ASX. It's not like the ASX is bad to us. I love my shareholders. I think we have an amazing, amazing group of shareholders. I love the interaction with the shareholders and the fact that I can talk to them. And so many of them have been so loyal and stuck around with WeBit for so many years. So to be honest, I don't have a strong motivation to just say, oh, this is crazy. I can't stand this anymore. I have to go to NASDAQ. If and when and whatever, you know, this issue will come up, the board will be discussing it. It's not something that at this point right now, it's burning or a burning issue or something that I have to deal with now.

Do you think you're a tight kind of a target?

In this industry, everyone's a takeover target. If you read the press, Intel is a takeover target right now. So I'm glad to be in the camp of Intel. No, but seriously, that's how this industry works. The big guys are constantly monitoring the small guys. They're constantly looking at how they develop. And as the smaller guys grow, the big guys, they constantly have these discussions of if and who we want to take over, or even more like who we want to take over. And there's always acquisitions. I said it many times. I am totally focused on making Webit a big company, a successful company. That is my sole goal. From my experience, and you can tell I've been around for a while, and my experience has been with startups. Most of my career has been with startups. The moment that a CEO starts thinking about acquisition, being acquired and so on, that's when the company starts going down. So I'm definitely... This is not something that I am wasting any time on. I want Weeby to be big and strong so that the day that someone gives us an offer, I can say no if it's not a good one.

Absolutely. Final financial markets questions. And if we've got time, just a couple of follow ups to some answers you gave earlier. So we'll be very quick. So the final financial markets question is, you met some analysts earlier this year with a view to potentially covering WeBit. Can you maybe give some update in terms of those brokers and where they're at?

Well, first of all, I want to thank MST and I want to thank UCP for initiating coverage beyond, of course, Pitt Street that has been doing it for a long time. But MST really took the ball. and ran forward with this and has been pushing it with their customers and UCP. I mean, they did the raise based on the analysis that they did. Once the analysis was out, they had calls with institutions. That's how they got the money for the raise, right? so uh i've made it clear that uh you know i'm tired of having uh you know brokers promise uh you know to to work with us to give coverage etc they they end up doing the raise and then they disappear somewhere and you know so i uh my focus will be in the future you know if and when we do raises um to focus on people who give us coverage, who are serious about WeBit, I'm very glad, by the way, I don't know if people noticed, but Macquarie in two different reports recently mentioned WeBit. They weren't reports focused on WeBit, but they mentioned WeBit. So I think we're starting to see, you know, analysts, even in Australia now, more focused and looking to cover WeBit. I'm obviously going to be very glad to work with any analyst involved. that wants to cover us. And, you know, hopefully we'll get more and more coverage now.

Two clarifications, Kaby, before we finish. Okay, the first one is around the on semi qualification. So will they make their first set of chipsets specifically designed for the product in qualification?

I think all of that is work that we're doing with them now. Obviously, I think the smartest thing, and this is the direction that we're trying to go in, is that the first module that will qualify will actually be the module that will be used in the first product. It just makes sense both for WeBit and for OnSemi. So that's kind of the direction that we're going in. Again, we're defining also what that target product would be, etc. So this is all stuff that's being defined now.

And the final clarification, going back to the discrete selector, is it a smaller discrete module that uses transistors? No.

That's almost a contradiction in the statement. The challenge that we have, without going too much into technology, the challenge is that every bit needs a selector. The selector needs to supply a certain current and voltage and so on. And the levels of current and voltage that the reRAM needs are such that we are using transistors which are at a certain size and those transistors are relatively bigger for the discrete market. Now, it's true that it is possible to do some discrete chips also with the current transistors. And I mentioned that in the past and it's not something that we've dropped. There is a potential that we might have some discrete solution that is based on the transistors. We can be competitive even with the current transistor in some specific applications and domains. But for the vast majority of the discrete market, there needs to be a smaller selector and it will not be a transistor. So, yeah, we're working on, I guess, all of the above, but all of it is right now in lower priority and we'll see. I would focus right now really on the embedded side. In the near future, in 25, 26, the big progress of WeBit, the big growth in cash flow, in revenues, in deals is going to come from the embedded side.

That's a great way to finish, I think. So that concludes the Q&A session. I want to thank all the participants for the healthy number of questions and the quality of them. Very, very well done. I will now hand back to Kobe for any closing remarks.

Well, thanks, Danny, for holding this session. Thanks to all of the shareholders that attended. Just like I said in the beginning, I think we're looking at a really exciting year ahead of us, 25 and then 26. We have a unique opportunity here. We're going to be filling this vacuum. We're going to be signing some additional deals. The market is going to see the ramping of revenues and cash and so on. And I really hope to see the markets also react to it. So thanks, everyone. And let's have a great 25. Thank you.