Why are 4DS Memory Share Price Down 23%? (ASX:4DS)

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The 4DS Memory Ltd [ASX:4DS] share price plunged 23% in morning trade after the company announced a technical update.

Results were largely positive but it’s possible a few reported setbacks may be acting as a deterrent.

4DS is now trading at 17 cents a share at time of writing.

Despite today’s big sell-off, the memory tech firm’s shares are still up 280% since this time last year.

ASX 4DS - 4DS Share Price ChartSource: TradingView.com

4DS is a Silicon Valley start-up that develops resistive random-access memory (ReRAM) technology.

The company is currently in the process of commercialising its product to replace the more traditional Flash memory storage format.

With the market for the memory industry sitting at around $40 billion, it’s clear that this is an exciting space to be in right now.

So why the sudden crash this morning?

4DS shares respond to a temporary testing glitch

While the company’s update this morning indicated great results overall, mention of some technical issues experienced during fabrication may have unnerved the market.

This is likely what’s left the 4DS share price in the red.

In the update, 4DS revealed results of its third non-platform wafers and its second platform lot wafers.

It seems the latter is where the issues were faced.

In this lot, all wafers as well as most test structures on each wafer were affected.

However, according to the report, the technical issue has ‘quickly been identified during detailed analysis and is resolvable going forward with no delays to current timelines as detailed below.

Moreover, management emphasised that the second platform lot operation was not in vain, as it shed light on some critically important insights.

Even in the face of technical interruption, 4DS could use the wafers to show its memory cell’s scalability to the smallest cell geometries supported on the R&D hub imec’s memory platform.

The start-up was also able to determine memory cell switching using an access device. This is a crucial step in producing a megabit memory array.

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Key highlights of the technical update

Third non-platform wafers appeared to indicate great results across the board and were able to replicate the second non-platform lot’s key memory characteristic results.

These included speed, endurance, and retention.

The third non-platform wafers have continued to tune the parameters of 4DS’ Interface Switching ReRAM technology.

What’s next for the 4DS share price?

The company’s market capitalisation is sitting at around $284 million, while its

Today’s update seemed to spook some investors. After all, a small-cap tech stock like 4DS makes or breaks its name on its technology.

Some investors may have thought that the reported technical glitch could represent a risk of potentially larger problems with the technology, risks they could not tolerate.

Other investors may be more optimistic. It will be interesting to see how the market calibrates today’s news over the coming weeks.

In the coming months, investors can also expect a joint development agreement 4DS has with the company HGST to yield interesting developments. This agreement was announced in 4DS’ quarterly activity report in June.

The two firms plan on meeting soon as HGST has requested a review of the results from these recent wafer lots.

The relentless demand for new and revolutionary memory storage options could place 4DS in great stead in the coming years. It’s certainly one to watch.


Lachlann Tierney

PS: Our publication Money Morning is a fantastic place to start on your investment journey. We talk about the big trends driving the most innovative stocks on the ASX. Learn all about it here

About Lachlann Tierney

Lachlann Tierney is an Analyst for Money Morning and has been investing for nearly a decade. With a Masters of Science from the London School of Economics, he brings a sound understanding of global markets to his writing. Lachlann is interested in emerging technologies, energy solutions and helping people invest…

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