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Date : 09/12/2021

4DS Memory



Market Cap : $70.08 Million


52 Week Range : $0.045 - $0.28

Share Price : $0.052

4DS is developing a breakthrough Interface Switching ReRAM Storage Class Memory solution. We recommend a "Buy".

Company Analysis

4DS Memory Limited (ASX: 4DS) is listed on the ASX and recognizes its revenues in Australia, but it conducts its operations in Silicon Valley, USA. 4DS is the development stage of their ReRAM technology that should be able to provide data storage solutions in the high-density-high-volume segment.

While the applications of these solutions are endless in the technology driven world everybody can imagine, 4DS is particularly going towards cloud and data intensive applications – AI, Blockchain, etc., to supplement the data intensive market that is growing tremendously quickly.

We have tracked 4DS for a while. We recommended our members to Buy it in 2020 at a price of $0.059. However, a few months later, we also recommended members to Sell their positions at $0.145 as our analysis pointed towards a stretched valuation – generating a return of 145% in the process. The 4DS share price has lagged since and with their most recent consolidation, there is an opportunity on the table, one that has similar upside that we have generated in the recent past.


Storage Class Memory

Storage Class Memory is an emerging non-volatile memory segment positioned between the most successful system memory (DRAM) and the most successful silicon storage (NAND Flash).

Ideally, Storage Class Memory has DRAM (speed & endurance) and NAND Flash (cost & retention) characteristics. However, this utopia may never see the light of day.

There are many opportunities for new memories in the vast space between DRAM and NAND Flash, each with different speed, endurance and retention metrics. The 2 most extreme opportunities are “The space close to NAND Flash” and “The space close to DRAM”, each with different priorities for systems with respect to speed, endurance, and retention:

Retention is everything in the space close to NAND Flash, while reaching a higher speed than NAND Flash is the opportunity for which system companies may be willing to pay a higher price per gigabyte. Whatever endurance this results in may be acceptable.

Speed is everything in the space close to DRAM, while reaching an endurance as close as possible to DRAM is the opportunity, especially if this reduces the need for more expensive DRAM in systems. Whatever retention this results in may be acceptable.

The main reason that retention is far less critical than speed and endurance is the space close to DRAM is that DRAM is essentially a volatile memory. Its contents need to be read and written back (refreshed) every 60 milliseconds and any retention better than DRAM saves power. The reality is that a Storage Class Memory with a retention of just one day is an astonishing 1.5 million times (or 6 orders of magnitude) better than DRAM retention. A Storage Class Memory with a retention of 1 week, 1 month, or 1 year further boosts this to 10 million, 44 million, and half a billion respectively.

The ultimate market demand is therefore for Storage Class Memory with DRAM speed, the highest endurance achievable with this speed, a cost per gigabyte closer to NAND Flash, and a pragmatic retention far superior to DRAM retention.

To achieve revenue similar to DRAM and NAND Flash, Storage Class Memory must have the following characteristics:

  • Like DRAM and NAND Flash, Storage Class Memory technologies must be based on well-understood physics & chemistry to be sustainable over many generations.
  • Storage Class Memory technologies must achieve a cost and density as close as possible to NAND Flash to be an economic complement to DRAM. The current consensus is that only area-based technologies can achieve this. Only when cell currents scale with cell area can the wiring and the cell scale together to higher densities.
  • To be a technical complement to DRAM, Storage Class Memory technologies must be capable of DRAM comparable speed. It is essential that the natural speed of the memory cell is not crippled by complex error correction, as is the case for technologies with large cell current fluctuations.
  • The current Storage Class Memory priorities are: (1) DRAM-like read speed, (2) as much endurance as possible without sacrificing speed, and (3) as much retention as possible without sacrificing speed and endurance.
  • Storage Class Memory technology must be tunable in the vast opportunity space between DRAM and NAND Flash to address new use models that may arise in the future for new products.

4DS’ Technology

4DS is pioneering Interface Switching ReRAM, a unique area-based ReRAM technology best positioned for Storage Class Memory in mobile devices and cloud data centers.

The 4DS Interface Switching ReRAM technology already satisfies the essential Storage Class Memory requirements:

  • The 4DS Interface Switching ReRAM technology is based on well-understood physics and chemistry.
  • The 4DS Interface Switching ReRAM technology is area-based. The 4DS cell currents scale with cell area and the wiring therefore scales accordingly. This is essential for high-density cost-effective memories.
  • The 4DS Interface Switching ReRAM technology naturally supports read speeds comparable to DRAM. The read currents of 4DS cells are very stable and 4DS Interface Switching ReRAM memories therefore do not require any speed-crippling error correction. This is essential to reach effective read speeds comparable to DRAM.
  • 4DS continues to tune its technology in line with the current Storage Class Memory priorities. The 4DS read speed is already comparable to DRAM with very high endurance while data retention is more than adequate for Storage Class Memory.
  • The 4DS Interface Switching ReRAM technology is tunable in the vast opportunity space between DRAM and NAND Flash.

The 3 Most Significant Leaps Forward

The 3 steps that represent the most significant leap forward for 4DS are:

In mid-2014, 4DS entered into a joint development agreement with HGST – renewed in mid-2015, 2016, 2017, 2018 & 2019 – which enabled the production of cells, essential for high-density and cost-effective memories. This collaboration continues to provide valuable insight in what is really important for future electronic systems.

In mid-2017, 4DS pioneered an industry first for any ReRAM: a read speed comparable to DRAM without the need for speed-crippling error correction.

In late 2017, 4DS entered into a collaboration agreement with imec to develop a production-compatible process and to demonstrate that the 4DS technology is a viable candidate for Storage Class Memory by developing a megabit memory test chip. This agreement was recently renewed until the end of 2022.

Company Updates

On 10 December 2020, the Company stated that the Second Non-Platform Lot was successfully manufactured by imec and would be available for testing at its facilities in Fremont in late December 2020. On 1 February 2021 the Company stated that 4DS had completed its testing of the Second Non-Platform Lot.

The data from the Second Non-Platform Lot:

  • Confirmed that the Company had been able to repeat the results for each of the key memory characteristics (speed, endurance, and retention) that were achieved with the First Non-Platform Lot.
  • Confirmed that significantly, 19 of the 21 device wafers were functional, a first for the Company (the two non-functional wafers were the result of being manufactured outside the imec process window)
  • Provides 4DS with further valuable insights with respect to how changes in key process parameters affect these key memory characteristics; i.e., which changes increase which memory characteristic.

On 1 February 2021, the Company also reported that the production of the Second Platform Lot commenced at imec on 27 January 2021 and on 21 June 2021 that these wafers arrived at 4DS in Fremont for testing.

On 21 June 2021, the Company also reported that it had taken the opportunity to utilise spare capacity on imec’s state-of-the-art production equipment to manufacture a Third Non-Platform Lot to ensure that the Company continues to build an extensive data set around the process parameters for its Interface Switching ReRAM technology.

Industry Analysis

Every device or system that processes data needs storage and system memory for computation. Examples of such devices or systems are remote controls for audio/video, smart thermostats, video door bells, security cameras, automotive electronics, smart phones, tablets, laptops, personal computers, air traffic systems, robotics, data centre systems, etc.

The memories in these devices or systems can be segmented in 3 distinct categories: internet-of-things (IoT) memories, embedded memories, and high-density high-volume memories.

The memory requirements (cost, density, speed, endurance, retention, power consumption) are quite different for each of these 3 segments:

•    IoT memories tend to be inexpensive, power-efficient, and low-density.

•    Memories embedded in complex system chips tend to be fast, area-efficient, and medium-density.

•    High-density, high-volume memories must be scalable to small geometries to be cost effective.

All functional high-yield memory technologies naturally land in one of these 3 segments. While there may be competition for market share within any segment, memories in different segments tend not to compete for market share.

The high-density high-volume memory segment is currently dominated by DRAM (a US$50 billion market) and NAND Flash (a US$40 billion market) with these characteristics:

DRAM is super-fast, exhibits exceptional endurance, and is therefore best suited for fast system memory. DRAM, however, is expensive and volatile (the data needs to be refreshed every 60 milliseconds) and sacrifices retention to maximize speed and endurance.

In sharp contrast, NAND Flash is inexpensive with much higher bit capacity and exceptional retention, and is best suited for low-cost silicon storage. NAND Flash, however, sacrifices both speed and endurance to maximize retention.

For these reasons, the maximum silicon storage in smart phones has increased 32-fold over the past 10 years, at roughly the same cost to the consumer, while system memory has barely doubled. This illustrates that it is affordable to increase silicon storage in many products, but it is not economical to do the same with system memory.

Being limited to 2D, DRAM will likely remain expensive since silicon largely defines cost per gigabyte. In contrast, the cost of NAND Flash is expected to decline over time thanks to 3D stacking. The cost gap between DRAM and NAND Flash will likely increase over time.

DRAM and NAND Flash fit their sweet spots near perfectly and it seems highly unlikely that a universal memory combining the best of DRAM and NAND Flash will ever exist. It is equally unlikely that any emerging memory technology will replace DRAM because its speed and endurance combination is exceptionally hard to beat. Furthermore, there is no economic justification to build a NAND Flash replacement for high-density applications while NAND Flash prices continue to erode.

However, as data processing and storage needs continue their rapid increase for mobile devices and cloud data centers, the industry needs a new non-volatile memory with attributes much closer to DRAM (because it is impossible to replace) than to NAND Flash (because it does not need to be replaced).

This vast space between DRAM and NAND Flash is therefore an opportunity for innovation. Much like the availability of inexpensive silicon storage enabled a booming new market of products that could not possibly exist without silicon storage (e.g.; smart phones), so will the emergence of new memory technologies lead to new products that we cannot even imagine today.

Investment Thesis

For the year ending 30 June 2021, 4DS made significant progress in the development of its Interface Switching
ReRAM technology with the consistent achievement of key strategic and technical milestones. On 13 May 2021, the Company reported that Western Digital Corporation subsidiary HGST renewed the joint development agreement for the 8th consecutive year for another 12 months.

4DS has been working with IMEC – a Belgian R&D firm that works on nanotechnology and has the production capabilities required for commercialisation. IMEC and 4DS have negotiated to again extend the collaboration agreement to the end of 2022.

Since 2020, the focus of the Non-Platform Lots has been to fine tune and optimize the process parameters of 4DS’ memory cell technology for Storage Class Memory and on 17 August 2021 the Company released a summary of the results for all three Non-Platform Lots.

As announced on 17 August 2021, 4DS demonstrated that fully crystalline PCMO material reduced the cell on-resistance by an order of magnitude compared to the PCMO material fabricated in the Second Non-Platform Lot.

This reduction in cell on-resistance directly translated into a significant improvement in read speed. The Company also stated that this significant performance improvement also meant that full characterization (speed, endurance, retention) of memory cells with this fully crystalline PCMO material requires memory cells operating in a memory array where currents are controlled and limited by access devices.

Since then, 4DS has continued to improve its test capability to extract additional information from the Third Non-Platform Lot on the endurance of its memory cells. Improvement in the Company’s test capability has shown that while endurance of these improved cells remains several orders of magnitude better than NAND endurance, it has potentially degraded when compared to the Second Non-Platform Lot performance reported in a Company announcement on 1 February 2021.

Part of this degradation may be caused by test related issues resulting from testing the memory cell without an access device.

The degradation has been the trigger for the consolidation in the 4DS share price. These testing challenges highlight the need to switch from using Non-Platform Lots to using Platform Lots which include imec access transistors.

An access device is essentially the difference between non-platform and platform lots in 4DS’ testing. The Third Platform Lot will also include a test chip: an imec 1 megabit array using 4DS’ ReRAM cells. Hence, the third platform lots are expected to yield clearer data relating to the endurance of the chips. 4DS expects that the results from the Third Platform Lots will resolve the ambiguity of the endurance test results to date.

Balance Sheet & Capital Raising

As at 30 September 2021, the Company held cash of $2.86 million, compared with $4.3 million as at 30 June 2021. Net cash of $1.254 million was used in operating activities during the quarter, compared to $1.271 million in the June quarter. The main variances when compared to the previous quarter were a reduction in staff costs by $99k and an increase in administration and corporate costs were higher by $95k, bringing them in line with historical expenditure after allowing for timing differences in the June quarter. The Company received $81k during the quarter from the proceeds of the exercise of options.

On the 25th of November 2021, 4DS announced the completion of a capital raising. 4DS has successfully raised $2.5 million via a Placement of approximately 52 million shares at an issue price of $0.048 per share. The Placement is being made to domestic and international institutions and high net worth investors and is being led managed by Mac Equity Partners. The Company is also intending to raise up to $2.5 million under a SPP, with the ability to accept up to an additional $1 million worth of oversubscriptions. Mac Equity Partners will underwrite the plan to $2.5 million. The capital raised will be used to progress the development of 4DS’ Interface Switching ReRAM technology with imec in 2022.

Technical Analysis

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We can definitely say that this year has been a tough year for 4DS. Hence, 4DS Memory’s share price is one of the worst performers on the ASX this year. Year-to-date, 4DS shares plummeted by 58.4%, and since the last three months, the memory storage company share prices depreciated by more than 62%.

In early October, 4DS experienced a massive gap, losing almost half of its value in a day. The company’s shares have not recovered since last month, even after 4DS announced its capital raising efforts.

However, we believe that 4DS bearish momentum will end soon. At the time of writing, 4DS Memory shares are gaining traction, up by 1.96% to 5.2 cents. If we read the RSI indicator on the weekly timeframe, we can see that 4DS has reached its oversold territory and is poised to rebound soon. Furthermore, the memory storage company is in the price range from its lows from the first COVID-19 crisis in March 2020. We are anticipating a consolidation in the 2.7 cents to 8 cents price range before we eventually could witness a breakout of the near-term support of 8 cents. Once a clear break out of the 78.6% Fibonacci retracement (2020 bull run) occurs, we will then possibly see 4DS fill the gap and reach our primary target price at 16 cents per share.

Volume and momentum

Volume increases since the last 200-day with the 20-day volume average up by 58%. The price action remains neutral in the near term, evolving in a range between 2.7 cents and 8.1 cents per share.

Trade consideration

  • Market participants might be interested to enter at a key support level of 5 cents per share.
  • Primary target price above 16 cents per share
  • It is recommended exiting the trade below 2 cents

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4DS is developing a breakthrough Interface Switching ReRAM Storage Class Memory solution. 4DS is trying to reinvent the wheel with its technology and hiccups in the product development roadmap are common. As there is no established market for Storage Class Memory, 4DS continues to explore speed, endurance and retention performance and is quantifying the trade-offs between these parameters. Fully quantifying the trade-offs between these parameters will enable future users to select the operating space which is most attractive for their future applications that require memory solutions “between” DRAM and NAND.

There is a high likelihood of 4DS having a positive result from the third platform lot – thereby creating just the catalyst that 4DS share price needs. Therefore, we recommend investors to “Buy”.


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