The 4DS Memory share price just crashed 65%. What happened?

The 4DS Memory Ltd (ASX: 4DS) share price is in free fall, down 65% at the time of writing.

The ASX tech share fell 76% lower to 2.2 cents shortly after the market open and is now trading at 3.2 cents.

4DS, which is focused on the development of non-volatile memory technology, went into a trading halt yesterday at its own request. The company said it would release an announcement “regarding a technical update based on the initial analysis of the wafers received”.

That announcement was released just after the market open today.

As you can likely guess by the plunging 4DS Memory share price, the wafer analysis wasn’t what was hoped for.

Unexpected problems send investors running

The update this morning revealed the initial internal analysis of the company’s Third Platform Lot.

For some technical background, the company’s stated objective is “to develop an Interface Switching ReRAM specifically developed for Storage Class Memory applications that has DRAM-like read speed, has lower than DRAM cost per bit and is non-volatile”.

Commencing in 2021, 4DS Memory undertook several iterations on Non-Platform Lots and Platform Lots. It concluded that the Interface Switching ReRAM displayed characteristics that may be applicable to Storage Class Memory.

The 4DS Memory share price had some big moves up and down during that time as investors digested the commercial potential of the technology.

On 11 April, the company reported that, “The final verification of the efficacy of these process improvements requires electrical testing, which can only be performed on this Third Platform Lot.”

Today, 4DS Memory announced that, “Testing of the memory cells used in the imec megabit memory array showed unexpected problems with scaling the memory cell to small dimensions suitable for Storage Class Memory potential applications.”

The company is conducting further testing but said the primary goal of its Third Platform Lot can’t be successfully completed until this issue is resolved.

Managing director departs

4DS managing director Ken Hurley will leave his position immediately.

In its statement, 4DS said this was a prudent mutual decision to “conserve the Company’s existing cash reserves”.

The 4DS board said:

Ken was engaged for the specific purpose of leading the Company’s commercialization effort, but due to the delays foreshadowed above, the Company believes that his expertise would be more useful to the Company once the Company is further developed in the commercialisation of its technology.

4DS Memory share price snapshot

The 4DS Memory share price was outpacing the benchmark this year, right up until it started trading today.

With today’s big losses factored in, 4DS Memory shares are down 63% year-to-date.

This compares to a 2022 loss of 7% posted by the All Ordinaries Index (ASX: XAO).

The post The 4DS Memory share price just crashed 65%. What happened? appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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