Future direction of Smoltek

On June 4, Smoltek held a webi­nar on the company’s future. The speak­er was Håkan Pers­son, CEO of Smoltek, and the mod­er­a­tor was Albin Kjell­berg, known in Swe­den for his talks, pod­casts, and tips on stock, sav­ings, and funds. This blog post sum­ma­rizes Håkan Persson’s speech. In a fol­low-up blog post, we will report on all the ques­tions raised after the pre­sen­ta­tion and Håkan Persson’s answers.

Amazing technology and significant potential

Smoltek is a com­pa­ny with rev­o­lu­tion­ary tech­nol­o­gy and enor­mous poten­tial. Accord­ing to Håkan Pers­son, Smoltek has the most sig­nif­i­cant poten­tial of all the com­pa­nies he has worked with. The company’s tech­nol­o­gy is very rel­e­vant in today’s tech­nol­o­gy devel­op­ment, which requires high­er per­for­mance and small­er, cheap­er, and more effi­cient com­po­nents. Smoltek’s tech­nol­o­gy can meet these demands through inno­v­a­tive and dis­rup­tive solutions.

Brief on Smoltek

Found­ed in 2005, Smoltek works with nan­otech­nol­o­gy based on 20 years of research at Chalmers Uni­ver­si­ty of Tech­nol­o­gy in Gothen­burg. The com­pa­ny was list­ed on Spot­light in 2018. Smoltek aims to solve advanced mate­r­i­al engi­neer­ing prob­lems with its pro­pri­etary tech­nol­o­gy, Smol­GROW. This tech­nol­o­gy cre­ates a three-dimen­sion­al sur­face struc­ture by con­trol­ling the growth of car­bon nanofibers. This pro­vides a larg­er active sur­face for elec­tri­cal and chem­i­cal process­es, which can be used in var­i­ous appli­ca­tion areas.

Business model

Smoltek’s busi­ness mod­el is based on an incu­ba­tor mod­el where busi­ness oppor­tu­ni­ties based on the core tech­nol­o­gy Smol­GROW are iden­ti­fied and devel­oped with part­ners into mar­ket-ready com­pa­nies. Smoltek makes mon­ey by licens­ing the tech­nol­o­gy and sell­ing the subsidiaries.

The potential sale of assets or entire subsidiaries

Smoltek has recent­ly announced that it is explor­ing the pos­si­bil­i­ty of sell­ing all or part of its sub­sidiaries Smoltek Semi and Smoltek Hydro­gen, or their tech­nol­o­gy, to high­light the val­ue of the com­pa­ny and ensure con­tin­ued growth. There is a large gap between the con­fi­dence of the stock mar­ket and the val­ue that the board and man­age­ment see in the com­pa­ny. They have begun to reach out to poten­tial stake­hold­ers to max­i­mize share­hold­er value.

New issue of shares

To ensure a struc­tured process and to con­tin­ue the devel­op­ment, Smoltek is con­duct­ing a rights issue. The sub­scrip­tion price is set at SEK 0.45 per share, which can pro­vide the com­pa­ny with SEK 26 mil­lion before expens­es. The issue is sub­ject to a min­i­mum sub­scrip­tion of 80 per­cent. Approx­i­mate­ly 50 per­cent of the issue is ini­tial­ly under­writ­ten by sub­scrip­tions and guar­an­tees from investors who have fol­lowed the com­pa­ny over time.

Why invest in Smoltek

Smoltek is an inno­v­a­tive deep-tech com­pa­ny with great poten­tial in two busi­ness areas: semi­con­duc­tors and hydro­gen. The com­pa­ny has an expe­ri­enced man­age­ment team and board of direc­tors and tar­gets vol­ume pro­duc­tion between 2025 and 2027. The tech­nol­o­gy plat­form has the poten­tial to expand into many oth­er appli­ca­tion areas. Smoltek has cre­at­ed much val­ue in recent years that it can cap­i­tal­ize on.

Two business areas

Smoltek focus­es on semi­con­duc­tors and hydro­gen. In semi­con­duc­tors, it devel­ops ultra-thin capac­i­tors for appli­ca­tion process­es in mobile phones and oth­er advanced elec­tron­ic com­po­nents. In hydro­gen, the com­pa­ny is devel­op­ing high-per­for­mance cell mate­ri­als for cheap­er and more effi­cient pro­duc­tion of fos­sil-free hydrogen.

Semiconductor industry

After this intro­duc­tion, Håkan Pers­son goes into each busi­ness area to explain its poten­tial. He start­ed with Smoltek Semi – the sub­sidiary that serves the semi­con­duc­tor industry.

The con­tin­u­ous devel­op­ment of more and more tran­sis­tors on chips requires new, thin, and advanced capac­i­tors. Smoltek’s tech­nol­o­gy meets these needs by cre­at­ing high capac­i­tance den­si­ty while main­tain­ing per­for­mance, solv­ing minia­tur­iza­tion prob­lems, and improv­ing the func­tion­al­i­ty of mod­ern semiconductors.

Why YAGEO stopped negotiations

Before con­tin­u­ing, Håkan Pers­son addressed the ele­phant in the room. Nego­ti­a­tions with YAGEO were sus­pend­ed due to their inter­nal cir­cum­stances and pri­or­i­ties, not dis­trust of Smoltek’s tech­nol­o­gy. YAGEO still sees the poten­tial of tech­nol­o­gy and may return to col­lab­o­ra­tion if its con­di­tions change.

Robert S. Willough­by, direc­tor of YAGEO’s Mul­ti­lay­er Ceram­ic Capac­i­tor Divi­sion, explains:” We believe in the poten­tial of Smoltek’s Car­bon Nanofiber tech­nol­o­gy to pro­duce Sil­i­con capac­i­tors. How­ev­er, after a thor­ough eval­u­a­tion, we regret to con­clude that the tim­ing is not right for us to make fur­ther invest­ments cur­rent­ly. Nev­er­the­less, we remain open to revis­it­ing the deci­sion if con­di­tions change. We are still con­fi­dent that Smoltek’s inno­v­a­tive tech­nol­o­gy will pro­vide com­mer­cial­ized prod­ucts that deliv­er dis­rup­tive capa­bil­i­ties com­pared to the cur­rent prod­ucts on the market.”

YAGEO may return

The deci­sion to break off nego­ti­a­tions was based on inter­nal pri­or­i­ties. YAGEO still wants to become a tech­nol­o­gy provider and is inter­est­ed in Smoltek’s tech­nol­o­gy. Smoltek will now approach more play­ers in the mar­ket as exclu­siv­i­ty agree­ments with YAGEO no longer bind it.

New generation of capacitors required

The mar­ket requires a new gen­er­a­tion of capac­i­tors with high capac­i­tance den­si­ty, and Smoltek’s tech­nol­o­gy can meet these require­ments. Mul­ti­lay­er Ceram­ic Capac­i­tors (MLCC) can­not meet the new require­ments, which gives Smoltek’s CNF-MIM capac­i­tors a unique position.

Existing option

The exist­ing option to meet these needs is sil­i­con deep trench. It is devel­oped in col­lab­o­ra­tion between Apple and TSMC, cre­at­ing intel­lec­tu­al prop­er­ty and com­pet­i­tive chal­lenges for oth­er play­ers in the mar­ket. Smoltek offers a more com­pet­i­tive solu­tion by adding mate­r­i­al to the sub­strate, which pro­vides high capac­i­tance and is robust, rather than etch­ing mate­r­i­al away from the sub­strate, which lim­its capac­i­tance and is frag­ile. Smoltek achieves per-microm­e­ter capac­i­tance lev­els on par with the best cur­rent­ly avail­able. With our next gen­er­a­tion, Gen 1, Smoltek’s CNF MIM capac­i­tors will have a sig­nif­i­cant increase in capacitance.

Cost-effective alternative

Smoltek’s CNF-MIM capac­i­tors enable high­er per­for­mance and are a cost-effec­tive alter­na­tive to sil­i­con deep trench. The tech­nol­o­gy is com­pat­i­ble with stan­dard CMOS man­u­fac­tur­ing process­es and can be used by exist­ing con­tract manufacturers.

Possible auction

Smoltek sees an oppor­tu­ni­ty to cre­ate an auc­tion sit­u­a­tion around its tech­nol­o­gy by re-engag­ing with YAGEO and oth­er poten­tial part­ners. The com­pa­ny is also work­ing on soft fund­ing through par­tic­i­pa­tion in EU-relat­ed projects.

Summary about Smoltek Semi

Smoltek Semi offers a com­pet­i­tive alter­na­tive to mar­ket-lead­ing tech­nolo­gies for future minia­tur­iza­tion and high capac­i­tance den­si­ty needs. In 2024, the focus will be on increas­ing capac­i­tance den­si­ty and deliv­er­ing pro­to­types to part­ners for eval­u­a­tion. There are sig­nif­i­cant com­mer­cial oppor­tu­ni­ties for Smoltek and a poten­tial partner.

Smoltek Hydrogen

Håkan Pers­son switch­es gears and talks about Smoltek Hydro­gen – the sub­sidiary that serves the hydro­gen industry.

Smoltek Hydro­gen is devel­op­ing a new type of cell mate­r­i­al for elec­trolyz­ers that can scale up the pro­duc­tion of fos­sil-free hydro­gen. This is nec­es­sary to com­bat cli­mate change.

Huge market

PEM elec­trolyz­ers are essen­tial for har­ness­ing ener­gy from inter­mit­tent green sources such as solar and wind. They match capac­i­ty to ener­gy avail­abil­i­ty, low­er­ing the cost of pro­duc­ing green hydro­gen. Fore­casts show a sharp hock­ey stick increase as the need for this tech­nol­o­gy is urgent and widespread.

Iridium – the Achilles heel of fossil-free hydrogen

PEM elec­trolyz­ers require irid­i­um, an extreme­ly rare and expen­sive pre­cious met­al. Today, irid­i­um costs about € 150,000 per kilo­gram, but it is expect­ed to reach € 700,000 per kilo­gram by 2030. Cur­rent tech­nol­o­gy, which mix­es irid­i­um into ink on the mem­brane, is inef­fi­cient. The solu­tion is to place irid­i­um on a sub­strate in con­tact with the mem­brane, which requires 10–30 times more sur­face area.

95 % less iridium

Smoltek’s solu­tion mul­ti­plies the sur­face area in con­tact with the mem­brane, pro­duc­ing the same amount of hydro­gen with sig­nif­i­cant­ly less irid­i­um. This reduces the need for irid­i­um and low­ers pro­duc­tion costs. A suc­cess­ful thou­sand-hour test shows a 90 per­cent reduc­tion in demand. In the lab, we have achieved a 95 per­cent reduction.

Saves 10 billion SEK

It is rea­son­able to expect that Smoltek’s cell mate­r­i­al will reach a mar­ket share of 30% by 2030, which means pro­duc­ing 200,000 square meters of cell mate­r­i­al. This would save SEK 10 bil­lion in elec­trolyz­er pro­duc­tion costs, cre­at­ing a strong busi­ness case for an indus­tri­al partner.

Next step

Smoltek has proven its tech­nol­o­gy and know how to  pro­duce the mate­r­i­al in large quan­ti­ties. The next step is to find a part­ner to indus­tri­al­ize the solu­tion and bring it to market.

Summary about Smoltek Hydrogen

Smoltek Hydro­gen offers a cost-effec­tive solu­tion to reduce the need for irid­i­um in the pro­duc­tion of green hydro­gen. The com­pa­ny has sol­id patents and part­ner­ships with glob­al lead­ers. The mar­ket is grow­ing rapid­ly, and Smoltek is well-posi­tioned to cap­i­tal­ize on this growth.

Invest in Smoltek

Smoltek has cre­at­ed much val­ue not reflect­ed in today’s mar­ket cap­i­tal­iza­tion. The com­pa­ny has both the tech­nol­o­gy and the com­pe­tence to real­ize its poten­tial. It is an excit­ing invest­ment oppor­tu­ni­ty for both the short and long term.

The end

This was the sum­ma­ry of Håkan Persson’s speech. You can watch the entire speech on YouTube. And don’t miss the next blog post, which details the ques­tions from the audi­ence and Håkan Persson’s answers.