Akoustis Technologies, Inc. (NASDAQ: AKTS) (“Akoustis” or the
“Company”), an integrated device manufacturer (IDM) of patented
bulk acoustic wave (BAW) high-band RF filters for mobile and other
wireless applications, announced today that it has acquired
Grinding and Dicing Services, Inc. (“GDSI”), a US-based provider of
premium back-end semiconductor supply chain services. Akoustis’
acquisition of GDSI is expected to support a strategy to reshore
its packaging of XBAW filters to the United States and to support
its anticipated application for funding under the CHIPS and Science
Act.
U.S. Senator Charles Schumer said, “Today’s
announcement that Akoustis is bringing new job-creating
semiconductor technology back to America, and specifically to
Upstate New York, is another example of the economic benefits made
possible by my CHIPS and Science Act. Akoustis’ new
capabilities will both enhance and expand the Finger Lakes region’s
semiconductor industry, which is already home to unique assets in
the semiconductor packaging space.”
Akoustis will host an investor call to discuss
the acquisition of GDSI and provide a business update and outlook,
followed by a Q & A session this morning at 8:00 a.m. ET. The
call-in numbers are 877-407-3982 (domestic) or +01 201-493-6780
(international). The conference call will be webcast live on the
Company’s website and will be available for playback at the
following URL: https://ir.akoustis.com/ir-calendar.
The rationale for the acquisition and expected
benefits include:
-
The addition of a diverse, high-margin premium services business
that is immediately accretive to our operating model. The gross
margins of this new business unit are projected to be approximately
60%
-
Achievement of $1M in cost savings/avoidance related to RF filter
prototype activity within the next 18 months
-
Strategic alignment with Akoustis’ strategy to leverage the CHIPS
Act of 2022 to create new jobs as we reshore core packaging
capabilities from Asia to an advanced packaging center located on
our Canandaigua campus in upstate New York. Specifically, this
acquisition allows the opportunity to scale-up our backend core
competencies including wafer grinding and Stealth Dicing® process
capabilities supporting our CSP and WLP onshore package
manufacturing
-
Driving improved rapid prototype and development cycle time
for Akoustis XBAW® filters through back-end process integration and
supply chain efficiencies
-
Integration of onshore front-end and back-end supply chains
supporting national security
-
New, synergistic sales channels in the defense market, including an
active “Trusted Supplier” accreditation with the Department of
Defense
-
The addition of the GDSI management team along with significant
technical talent in wafer grinding and dicing to complement
Akoustis’ front-end XBAW technology
-
The expansion of XBAW® RF filter margins through the
internalization of the grinding and dicing process supply
chains
Jeff Shealy, founder and CEO of Akoustis,
stated, “I am pleased to welcome Joe Collins along with the entire
GDSI team to the Akoustis family. We look forward to expanding our
internal supply chain capabilities and supporting the growth of
GDSI’s business with external customers.” Mr. Shealy continued,
“The acquisition of GDSI will enable Akoustis to speed the
development of our leading XBAW® filters to take on the rapidly
expanding demand for BAW filters that operate at frequencies above
3 GHz.”
Financial Terms
Akoustis is paying $14 million in cash and $2
million in stock for GDSI, with an additional $4 million in the
form of a secured promissory note payable over 3 years based on key
employee retention and agreed upon performance, for a total of $20
million. In connection with the transaction, and as an inducement
for employment, the company granted to Mr. Collins 242,235 shares
of common stock, with an additional 242,235 shares issuable on the
second anniversary of the transaction and 121,118 shares issuable
on the third anniversary of the transaction, subject to certain
employment conditions.
Akoustis continues to experience strong demand
and a growing sales funnel for its Wi-Fi, 5G mobile, and 5G
infrastructure products, including CBRS XBAW® filters, as well as
its new XBAW® and RFMi resonator and oscillator products. During
the last quarter, the Company shipped multiple samples of its new
5G XBAW® wafers complete with its new, advanced wafer-level
packaging (WLP) technology. Akoustis continues to add new Wi-Fi
design wins, many of which are expected to ramp into production in
calendar 2023.
Akoustis is actively delivering volume
production of its Wi-Fi 6 tandem filter solutions, shipping
multiple 5G small cell XBAW® filter solutions, and delivering
initial designs of its new 5G mobile filter solutions to multiple
customers and is now entering the market with its new Wi-Fi 6E
coexistence XBAW® filter solutions. To date, Akoustis has
received more than 20 customer design wins for its patented XBAW®
filter solutions.
Given the rapidly growing sales funnel activity,
as well as ongoing interaction with customers regarding expected
ramps in 5G mobile, Wi-Fi 6, and Wi-Fi 6E in calendar 2023, the
Company is completing the annual production capacity increase at
its New York fab to approximately 0.5 billion filters per year.
About Akoustis Technologies,
Inc.
Akoustis® (http://www.akoustis.com/) is a
high-tech BAW RF filter solutions company that is pioneering
next-generation materials science and MEMS wafer manufacturing
to address the market requirements for improved RF filters -
targeting higher bandwidth, higher operating frequencies and higher
output power compared to legacy polycrystalline BAW
technology. The Company utilizes its proprietary and patented XBAW®
manufacturing process to produce bulk acoustic wave RF filters
for mobile and other wireless markets, which facilitate
signal acquisition and accelerate band performance between the
antenna and digital back end. Superior performance is
driven by the significant advances of poly-crystal,
single-crystal and other high purity piezoelectric materials and
the resonator-filter process technology which enables optimal
trade-offs between critical power, frequency and bandwidth
performance specifications.
Akoustis plans to service the fast growing
multi-billion-dollar RF filter market using its integrated
device manufacturer (IDM) business model. The Company owns and
operates a 120,000 sq. ft. ISO-9001:2015
registered commercial wafer-manufacturing facility located in
Canandaigua, NY, which includes a class 100 / class 1000 cleanroom
facility - tooled for 150-mm diameter wafers - for the
design, development, fabrication and packaging of RF filters, MEMS
and other semiconductor devices. Akoustis Technologies,
Inc. is headquartered in the Piedmont technology
corridor near Charlotte, North Carolina.
Forward-Looking Statements
This document includes “forward-looking
statements” within the meaning of Section 27A of the Securities
Act, and Section 21E of the Securities Exchange Act of 1934, each
as amended, that are intended to be covered by the “safe harbor”
created by those sections. These forward-looking statements
include, but are not limited to, statements about our estimates,
expectations, beliefs, intentions, plans or strategies for the
future (including our possible future results of operations,
business strategies, competitive position, potential growth
opportunities, potential market opportunities and the effects of
competition), the anticipated benefits of the acquisition of
Grinding and Dicing Services, Inc., including expected synergies
and other financial impacts, such as revenue per quarter, and the
assumptions underlying such statements. Forward-looking statements
include all statements that are not historical facts and typically
are identified by use of terms such as "may," “might,” “would,”
"will," "should," "could," “project,” "expect," "plan," “strategy,”
"anticipate," “attempt,” “develop,” “help,” "believe," “think,”
"estimate," "predict," “intend,” “forecast,” “seek,” "potential,"
“possible,” "continue," “future,” and similar words (including the
negative of any of the foregoing), although some forward-looking
statements are expressed differently. Forward-looking statements
are neither historical facts nor assurances of future results,
performance, events or circumstances. Instead, these
forward-looking statements are based on management’s current
beliefs, expectations and assumptions and are subject to risks and
uncertainties. Factors that could cause actual results to
differ materially from those currently anticipated include, without
limitation, risks relating to our inability to obtain adequate
financing and sustain our status as a going concern; our limited
operating history; our inability to generate revenues or achieve
profitability; the results of our research and development
activities; our inability to achieve acceptance of our products in
the market; the possibility that the anticipated benefits from
business acquisitions (including the acquisition of Grinding and
Dicing Services, Inc.) will not be realized in full or at all or
may take longer to realize than expected; the possibility that
costs or difficulties related to the integration of acquired
businesses’ operations will be greater than expected and the
possibility of disruptions to our business during integration
efforts and strain on management time and resources; the
impact of a pandemic or epidemic or a natural disaster, including
the COVID-19 pandemic, the Russian-Ukrainian conflict and other
sources of volatility on our operations, financial condition and
the worldwide economy, including its impact on our ability to
access the capital markets; increases in prices for raw materials,
labor, and fuel caused by rising inflation; general economic
conditions, including upturns and downturns in the industry;
shortages in supplies needed to manufacture our products, or needed
by our customers to manufacture devices incorporating our products;
our limited number of patents; failure to obtain, maintain, and
enforce our intellectual property rights; claims of infringement,
misappropriation or misuse of third party intellectual property,
including the lawsuit filed by Qorvo, Inc. in October 2021, that,
regardless of merit, could result in significant expense and
negatively impact our business results; our inability to attract
and retain qualified personnel; our reliance on third parties to
complete certain processes in connection with the manufacture of
our products; product quality and defects; existing or increased
competition; our ability to successfully manufacture, market and
sell products based on our technologies; our ability to meet the
required specifications of customers and achieve qualification of
our products for commercial manufacturing in a timely manner; our
inability to successfully scale our New York wafer fabrication
facility and related operations while maintaining quality control
and assurance and avoiding delays in output; the rate and degree of
market acceptance of any of our products; our ability to achieve
design wins from current and future customers; contracting with
customers and other parties with greater bargaining power and
agreeing to terms and conditions that may adversely affect our
business; risks related to doing business in foreign countries,
including China; any security breaches, cyber-attacks or other
disruptions compromising our proprietary information and exposing
us to liability; our failure to innovate or adapt to new or
emerging technologies, including in relation to our competitors;
our failure to comply with regulatory requirements; results of any
arbitration or litigation that may arise; stock volatility and
illiquidity; dilution caused by any future issuance of common stock
or securities that are convertible into or exercisable for common
stock; our failure to implement our business plans or strategies;
and our ability to maintain effective internal control over
financial reporting. These and other risks and uncertainties are
described in more detail in the Risk Factors and Management’s
Discussion and Analysis of Financial Condition and Results of
Operations sections of the Company’s most recent Annual Report on
Form 10-K and in subsequently filed Quarterly Reports on Form 10-Q.
Considering these risks, uncertainties and assumptions, the
forward-looking statements regarding future events and
circumstances discussed in this document may not occur, and actual
results could differ materially and adversely from those
anticipated or implied in the forward-looking statements. You
should not rely upon forward-looking statements as predictions of
future events. The forward-looking statements included in this
document speak only as of the date hereof and, except as required
by law, we undertake no obligation to update publicly or privately
any forward-looking statements, whether written or oral, for any
reason after the date of this document to conform these statements
to new information, actual results or to changes in our
expectations.
COMPANY:
Tom Sepenzis
Akoustis Technologies
VP of Corporate Development & IR
(980) 689-4961
tsepenzis@akoustis.com
The Del Mar Consulting Group, Inc.
Robert B. Prag, President
(858) 794-9500
bprag@delmarconsulting.com
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