Brainchip shares rally on new customer signups
Australia’s very own home-grown semiconductor company, BrainChip Holdings (ASX:BRN), has more than doubled in price in 2022 so far, as investors lap-up news including that of a new US patent, the eighth patent the company has secured since 2008.
BrainChip bills itself as the world’s first and only commercial producer of neuromorphic artificial intelligence chips. What that means is that BrainChip’s AI processor mimics the neural networks of the human brain. By mimicking brain processing, BrainChip has pioneered a processing architecture called Akida.
The Akida processor is a high-performance, small, ultra-low power unit that enables a wide array of “edge” capabilities. (“Edge” in this context means a micro-processor that can process information onboard a device, in real-time, onsite, where the data is created, to minimise the need for processing in a remote data centre. Without the data having to go to the cloud, thus saving huge amounts of bandwidth that otherwise be required; it’s at the “edge” of the cloud.)
At the recent Consumer Electronics show in Las Vegas, Mercedes-Benz demonstrated this BrainChip microchip in voice-related technology in its latest Vision EQXX electric concept vehicle. The German car giant likes the fact that neuromorphic computing is a form of information processing that reduces energy consumption, and also the fact that the AI software and hardware from BrainChip is five to ten times more efficient than the voice control technologies that have previously been used in the auto market.
Late last year, BrainChip landed a landmark deal which will see Japanese semiconductor firm, MegaChip use Akida to develop next-generation edge-based AI solutions.
The deal will see MegaChip design and manufacture the Akida technology into external customers’ systems on chip designs. In return. BrainChip will receive the licensing fee and payment-related fees.
In another January announcement, the company told the ASX that California-based technology Information Systems Laboratories, Inc. (ISL) will use its Akida processor to develop an AI-based radar research solution for the Air Force Research Laboratory.
The BRN share price has been pushed higher by this steady flow of good news, to the point where it is now a $3 billion company.
It is an amazing story, given the humble beginnings. BrainChip listed in September 2015, through the backdoor, using the shell of dormant minerals explorer Aziana. It raised $4 million through the issue of shares at 15 cents, giving it a market capitalisation of $90.2 million. At $1.67, the company is now valued at just under $3 billion. That is a higher market value than Megaport Ltd (ASX: MP1), at $2.3 billion, and Dicker Data Ltd (ASX: DDR), at $2.2 billion. Although BrainChip does not make any money, the company expects the Akida to have three revenue streams. It firstly will look to license Akida to other players in the semiconductor industry. BrainChip will receive royalties for each semiconductor sold that contains Akida IP.
With the granting of a new US patent that protects the company’s neuro-morphic processor, BrainChip is edging closer to taking orders and commencing internal testing. The recent semiconductor shortage and shift to artificial intelligence should underscore demand for cutting-edge semiconductors for the foreseeable future.