Tiny, unheard of, Atomera (ATOM) could be Act II of a really big high tech show. What was Act I? It was erbium doping, which revolutionized fiber optic high tech in the '90s. The growth of the network was hampered by lack of a clean way to amplify optical signals. You had to convert light speed down to a crawl at electron speed to amplify, then convert back to light. Then the erbium-doped fiber amplifier or EDFA was born where glass fiber was doped with erbium allowing pure optical amplification. The rest is history.

Now high tech is up against another constraint where a similar invention is needed. When Intel put forth Moore's Law, it seemed it would go on forever with transistors on a chip doubling every 18 months bringing down cost while improving performance. It's debated, but 50 years later, it may be coming up against physical boundaries that will change the industry.

As was noted recently in Barron's, Moore’s Law is “no longer a law in terms of the time frame” of improvement of chips, according to Scott Bibaud. “In 2012, the cost per transistor for the first time did not go down,” he observes, an ominous sign for the industry. Bibaud has served as Senior Vice President and General Manager of Altera’s Communications and Broadcast Division (later bought by Intel) and was chief of Mobile Platforms Group at Broadcom. In 2015, he took over as CEO at Atomera.

With Moore's Law of control, chip makers eagerly retooled the next generation smaller node, currently going from 20 nanometers to 14 nanometers. But with the Internet of Things (IOT) the wave of the future, they are not so eager. According to Bibaud, “People are saying 28-nanometer will be useful for many years ... And 40-nanometer chips are big in the world of automotive chips and for the Internet of Things. We’ve even heard that the 130-nanometer node has the newest design starts of any node today for things like analog and sensor and power applications.”

So the chip industry needs some kind of big efficiency invention now, like the fiber networks received in the '90s with the EDFA, giving ramped up performance on existing node designs. Atomera is poised to hand them just that. And they're doing it with some more doping of silica - oxygen this time instead of erbium. And they're doing it with the very same PhD that invented the erbium doping - Dr. Robert Mears, the founder of Atomera. In 2001, it was private and known as Mears Technologies.

In the 2016 annual report (when they went public) they open with:

"There is no manufacturing process as complicated as making a semiconductor chip ... In January we changed the name of our company to more accurately represent the advanced material science we are providing to the industry in an era when semiconductor advances are increasingly happening at the atomic level."

Mears is now the Chief Technical Officer of Atomera. He has an array of patents on his invention called MST (Mears Silicon Technology) that dopes a transistor with oxygen atoms in a way that dramatically improves electron flow. This allows several benefits like smartphones with 50% better battery use, but more importantly it provides "more than Moore" tooling and cost benefits to chip makers.

The strong link between Robert Mears' Act I and II is evident in Wikipedia's box summary for him. It simply reads "Born: EnglandOccupation: Physicist and engineer Known for: Invented EDFA, founded Atomera Notable work: EDFA, Mears Silicon Technology."

I called Atomera "unheard of" but that's not entirely true. There is no analyst coverage yet, but there was the article in Barron's August 17, 2017 "Atomera Hopes To Make Money Solving The Breakdown Of Moore's Law" and a nice article at Seeking Alpha February 1, 2018, focusing on the Internet Of Things, the web-connected device revolution now engulfing us.

Then there is the January 30, 2018, press release "Atomera Continues To Grow Customer Pipeline" that seems to have brought some attention and activated the stagnant stock, sending it up about 50% the following week in the face of a sharp market selloff. I have been long the stock since December at $4 and feel it is a growth item you hang onto until the thesis is altered. This is a pre-revenue, one trick pony with heavily patented oxygen doping being the only product offered. But the market may now be grappling with the possibility of a $67 million market cap company engaging some $3.5 billion of the addressable market.

From Barron's article, quoting Scott Bibaud, Atomera CEO:

“I don’t know if I can quantify the degree of confidence I have in their signing,” he says, “but they are spending a lot of money in evaluation, it’s quite expensive,” suggesting that they wouldn’t be doing so only to end up walking away.  Atomera, with just under 20 employees at the moment, is currently staffing up because “we’re bringing in a lot of new customers” in the evaluation stage.  

In August, when this piece was done, Atomera had four customers in the evaluation stage. Now they have 14 per the January 30 news release, representing about 50% of the biggest semiconductor companies in the world.