Smoltek Nanotech Holding AB: Smoltek has the technology for next-generation capacitors and is seeking financially strong partners to industrialize it

Smoltek has made significant progress in both technical development and creating an industrial process for high-volume production of the company's capacitor technology, CNF-MIM. Now, Smoltek is seeking financially strong partners through a bidding process, expected to take 6-12 months, aiming to bring their technology to market and support continued technological development and new collaborations.

"We have made significant progress in our semiconductor subsidiary, Smoltek Semi. In 2024, we expect to reach technical performance for our capacitors that matches the competitors, combined with an extremely thin form factor. This is exactly what the market demands. Now that we are no longer bound by exclusivity agreements in the semiconductor area, we can start dialogues with several potential collaboration partners. Our focus for 2024 is to continue the technological development and create new collaborations," says Håkan Persson, CEO of Smoltek

Necessary hardware to meet customers' high technology requirements

Semiconductor is the collective name for the materials that conduct electricity under specific conditions, and it is an indispensable component in modern electronics. They are found in everything from smartphones and laptops to cars and medical equipment. Semiconductors are also crucial for technologies such as artificial intelligence (AI) and the Internet of Things (IoT), making the semiconductor industry central to the global economy. Major semiconductor companies such as Nvidia, TSMC and Broadcom are among the most highly valued companies listed on the global stock markets.

Smoltek's capacitor technology is an important hardware component to meet the high demands of the technology development within AI, 5G/6G and advanced driver assistance systems (ADAS). The market requires a new generation of capacitors that are extremely thin with high capacitance density, which can be placed close to the active power source or processor chip to meet performance and functionality requirements. With the continued development of semiconductor manufacturers and the increasing need for smaller and more efficient components, the market for extremely thin capacitors is expected to expand in the coming years, confirmed by industry-specific entities.

Currently, the leading capacitor technology that meets market demands is not commercially available, as it was developed exclusively in a partnership between Apple and TSMC. This creates opportunities for other players, such as Smoltek. In April 2024, Smoltek announced that its CNF-MIM capacitors (Gen-One) are expected to be commercially competitive with the leading technology. Gen-One capacitors, based on Smoltek's nanotechnology-based CNF-MIM platform, will provide a foundation for future manufacturing of ultra-thin capacitors with high capacitance density.

The semiconductor industry's challenges and opportunities

The semiconductor industry has faced challenges in recent years, such as disrupted supply chains during the pandemic and geopolitical tensions in Asia, where 90% of the world's most advanced chips are manufactured. The United States, EU and other regions have committed billions through initiatives such as the European Chips Act and the CHIPS and Science Act to strengthen regional manufacturing.

The industry is expected to grow rapidly, driven by continued demand for electronics and technological advancements, while production capacity in Europe and the United States is being greatly expanded with part-financing from regional programs. The capacitor, which is a basic component in all semiconductor-based systems, is in constant need of improvement. Smoltek has the necessary technology to become a key player within ultra-thin capacitors but needs the right collaboration partners and capital to reach the market.

Updated strategic conditions

To ensure long-term success and continued innovation, Smoltek has launched a bidding process, which was announced on May 22, 2024. Through this process, interested parties are sought for a potential sale of concepts and intangible assets in the semiconductor business area, including Smoltek's CNF-MIM technology for ultra-thin capacitors, which is operated by the subsidiary Smoltek Semi AB, alternatively all or parts of this subsidiary. The process is estimated to take 6-12 months.

New income opportunities for industrial collaboration partners

Smoltek's capacitors offer new opportunities for sales income in several market segments, from premium sectors such as the mobile industry and advanced electronics to simpler applications such as RF filters. The annual net sales potential is estimated at approximately 1,000 MSEK during the period 2030 to 2034. The capacitors can be manufactured cost-effectively thanks to a CMOS-compatible production process that is cheaper than competing alternatives and uses existing machines at contract manufacturers. This enables collaboration partners to effectively address multiple segments with good profitability.

Since the negotiations with Yageo Group unexpectedly ended in March 2024, Smoltek is now able to broadly offer interested parties the opportunity to submit bids for license agreements or the acquisition of all or part of the assets in Smoltek Semi. With the end of exclusivity agreements, there are no longer any restrictions on negotiations or bids for Smoltek's CNF-MIM technology.

Summary - strategic plan for 2024-2028
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Focus on capital and partnership for Smoltek Semi

In addition to continued technology development, Smoltek Semi is now focusing on attracting external capital from one or more partners to take the technology to industrialization. The company is primarily aimed at industrial actors and venture capitalists with extensive industry knowledge. By the end of 2024, the Gen-One results will be presented to Yageo and their competitors, with the expectation that the technology will be competitive and partnership dialogues will be initiated with several players. Smoltek's shareholders are mainly expected to benefit from royalty income from several players and/or a possible sale of the subsidiary to one or more partners.