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.