Atomera Inc

Atomera Incorporated operates within the $700+ billion global semiconductor industry, which experienced a rebound in 2024 to $681 billion and is projected to grow to $755 billion in 2025, driven primarily by artificial intelligence (AI) workloads ¹. The company's core business is the development, commercialization, and licensing of proprietary processes and technologies, specifically Mears Silicon Technology (MST), a thin film of reengineered silicon, typically 100 to 300 angstroms thick ². MST is designed to address engineering challenges in the semiconductor industry by enabling smaller transistors with increased speed, reliability, and power efficiency, and is compatible with existing manufacturing processes and tools ³.

Atomera's business model is centered on a license and royalty-based approach, where it licenses its MST technology to foundries, integrated device manufacturers (IDMs), and fabless semiconductor manufacturers for use in manufacturing, and receives ongoing royalties based on the number and/or sales price of MST-enabled products sold ⁴. The company also licenses its MSTcad software, which runs on Synopsys' Sentaurus TCAD software, to customers for simulating MST effects on their products ⁵. Additionally, Atomera offers fee-based integration engineering services, typically through paid evaluation arrangements, joint development agreements (JDAs), or integration license agreements, which are intended to lead to commercial license agreements ⁶.

The company's primary technology, MST, is applied to power devices, RFSOI devices, and advanced CMOS integrated circuits, including logic and memory ⁷. MST-SP (3-5 volts) and MST-SPX (up to 48V) are MST-enabled power devices offering improved on-resistance at comparable or better breakdown voltage and reliability, targeting power management integrated circuits (PMICs) in handheld devices, and the automotive and data center power sectors for MST-SPX ⁸. In 2025, a variant of MST-SPX optimized for trenchFETs, used in data center power supplies, was introduced ⁹. For RFSOI devices, MST aims to optimize both RF switch and Low Noise Amplifier (LNA) devices ¹⁰. In advanced CMOS, MST addresses challenges in nano-scale devices by enhancing drive current, reducing leakage, and reducing variability, with illustrative implementations shown in Gate-All-Around (GAA) transistors for GPUs and CPUs in AI data centers ¹¹. The company also began applying its technology to compound semiconductors, such as gallium nitride (GaN)-on-Silicon substrates, in 2024, aiming to improve crystalline quality and reduce defect density ¹².

For the fiscal year ended December 31, 2025, Atomera reported total revenue of approximately $65,000 ¹³, a decrease from approximately $135,000 ¹⁴ in 2024. The cost of revenue was approximately $321,000 ¹⁵ in 2025, up from approximately $123,000 ¹⁶ in 2024, resulting in a gross margin of approximately $(256,000) ¹⁷ in 2025, compared to $12,000 ¹⁸ in 2024. Operating expenses totaled approximately $20.9 million ¹⁹ in 2025, an increase from approximately $19.3 million ²⁰ in 2024. The net loss for 2025 was approximately $20.2 million ²¹, compared to a net loss of approximately $18.4 million ²² in 2024. Diluted EPS was $(0.65) ²³ in 2025, compared to $(0.68) ²⁴ in 2024. Net cash used in operating activities was approximately $14.9 million ²⁵ in 2025, and cash and cash equivalents stood at approximately $19.2 million ²⁶ as of December 31, 2025. Total assets were approximately $21.1 million ²⁷ and total liabilities were approximately $2.7 million ²⁸ as of December 31, 2025. The company had an accumulated deficit of approximately $241.7 million ²⁹ as of December 31, 2025.

Year-over-year, revenue decreased by approximately 51.9% from $135,000 in 2024 to $65,000 in 2025 ³⁰. Cost of revenue increased by approximately 161.0% from $123,000 in 2024 to $321,000 in 2025 ³¹. This led to a negative gross margin in 2025, a contraction from the positive gross margin in 2024. Research and development expenses increased by approximately $1.3 million, or 12%, from $11.0 million in 2024 to $12.3 million in 2025 ³². General and administrative expenses increased by approximately $540,000, or 7%, from $7.3 million in 2024 to $7.8 million in 2025 ³³. Selling and marketing expenses decreased by approximately $295,000, or 28%, from $1.1 million in 2024 to $758,000 in 2025 ³⁴. Interest income increased by approximately $152,000, or 20%, from $779,000 in 2024 to $931,000 in 2025 ³⁵. Accretion income significantly decreased from $178,000 in 2024 to $6,000 in 2025 ³⁶.

During 2025, Atomera entered into a strategic marketing agreement with a global leader in chip fabrication technology in April 2025, focusing on accelerating MST adoption for GAA (leading-edge logic) and DRAM customers ³⁷. This collaboration aims to perfect MST implementation on the tool vendor's reactors, increasing market reach and accelerating customer decisions ³⁸. The company also extended its corporate headquarters lease in Los Gatos, California, through March 31, 2031, and its Tempe, Arizona office lease through February 2029 ³⁹. A new lease agreement for an epitaxial deposition tool in Tempe, Arizona, was entered into in December 2025, with a 12-month term beginning January 1, 2026, at $95,000 per month ⁴⁰. In October 2025, ST Microelectronics (ST) informed Atomera that they would not complete the qualification of MST into their process, due to a migration of their targeted process development to 300mm wafers ⁴¹.

Atomera believes it has sufficient capital to fund its current business plans and obligations for at least the next 24 months following the filing date of this report, after giving effect to its February 2026 registered direct offering ⁴². The company's future capital requirements and the adequacy of its available funds are dependent on its ability to successfully commercialize MST technology, competing technological and market developments, and the need for collaborations or technology acquisitions ⁴³. If sufficient revenue from license fees and royalties is not generated in a timely manner, additional capital will be required ⁴⁴.

A major growth area for Atomera is the application of MST to compound semiconductors, specifically GaN-on-Silicon substrates ⁴⁵. Recent experiments indicate that MST substrates can enable the growth of device-ready GaN layers with enhanced crystalline quality and reduced defect density compared to conventional GaN-on-Si ⁴⁶. This improved material quality is expected to increase wafer-level yield and device-level performance ⁴⁷. Preliminary results from a collaboration with Texas State University support these improvements ⁴⁸. The company is actively developing this technology and testing it with initial customers ⁴⁹.

Another significant growth vector is the strategic marketing agreement entered into in April 2025 with a global leader in chip fabrication technology ⁵⁰. This collaboration is specifically focused on accelerating the adoption of MST for next-generation technologies, including GAA (leading-edge logic) and DRAM customers ⁵¹. The partnership aims to perfect the implementation of Atomera's MST technology on the tool vendor's reactors, which is expected to offer solutions more targeted to customer requirements, increase market reach, and accelerate customer decisions on MST adoption in commercial, high-volume manufacturing ⁵².

Operationally, Atomera anticipates that its cost of revenue will vary substantially based on the mix of license and engineering services revenues and the nature of products and/or services delivered in each customer engagement ⁵³. The company's operating plans for the next 12 months include increased research and development expenses ⁵⁴. Research and development efforts are focused on enabling existing and prospective customers to integrate MST into their manufacturing processes and commercialize MST-enabled semiconductor products, as well as evolving and expanding the technology to address new process technologies in the semiconductor industry roadmap ⁵⁵.

Regarding capital allocation, Atomera incurred research and development expenses of approximately $12.3 million in 2025 and $11.0 million in 2024 ⁵⁶. The company's equity incentive plans, including the 2017 Stock Incentive Plan and the 2023 Stock Incentive Plan, are designed to attract, retain, and reward personnel through stock-based compensation awards ⁵⁷. As of December 31, 2025, approximately 6.0 million shares of common stock are reserved for issuance under outstanding stock options and restricted stock units ⁵⁸. The company has not paid dividends in the past and plans to reinvest all earnings, if any, to cover operating costs and remain competitive, with no immediate plans to pay cash dividends ⁵⁹.

Atomera explicitly flagged several structural headwinds and execution risks. The product qualification and licensing cycle is expected to be lengthy and costly, with the time from initial engagement to customer incorporation of technologies in semiconductor products potentially taking 18 to 36 months or longer ⁶⁰. The company has incurred significant engineering, marketing, and sales expenses ahead of license revenue and expects this trend to continue ⁶¹. There is no assurance that current relationships, including JDAs and integration license agreements, will advance to further licensing stages or royalty-based distribution agreements ⁶². Specifically, ST Microelectronics (ST) decided in October 2025 not to complete the qualification of MST into their process due to a migration to 300mm wafers ⁶³. The long-term success of the business is dependent on a royalty-based model, which carries inherent risks such as the rate of technology adoption, customer willingness to agree to an ongoing royalty model, and demand for MST-enabled products ⁶⁴.

Geopolitical and macroeconomic factors are also identified as constraints. Unfavorable geopolitical and macroeconomic developments, including inflation rates, conflicts, bank failures, and economic uncertainties, could adversely affect the business ⁶⁵. Recent efforts by various countries to achieve national self-sufficiency in the semiconductor supply chain create new competitive and economic dynamics that are difficult to predict and may lead to industry instability ⁶⁶. Increased export controls, particularly on exports to China, have already impacted certain semiconductor and equipment vendors, and may limit Atomera's ability to license its IP in some parts of the world ⁶⁷.

Atomera faces material risks including its limited revenue generation to date and a history of significant operating losses, with a net loss of approximately $20.2 million ⁶⁸ in 2025 and cash used in operations of approximately $14.9 million ⁶⁹, leading to an accumulated deficit of approximately $241.7 million ⁷⁰ as of December 31, 2025. The company's ability to secure additional financing is crucial, as it may require more capital before royalty-based licenses generate sufficient income, and there is no guarantee such funds will be available on reasonable terms ⁷¹. The lengthy and costly product qualification and licensing cycle, which can take 18 to 36 months or longer ⁷², poses a significant execution risk, as demonstrated by ST Microelectronics' decision in October 2025 to halt MST qualification due to a process migration ⁷³. The long-term success relies on a royalty-based business model, which is inherently risky due to factors outside the company's control, such as customer adoption rates and market demand ⁷⁴. Geopolitical and macroeconomic developments, including increasingly strict export controls to regions like China, could adversely affect the business and limit IP licensing capabilities ⁷⁵. Cybersecurity threats, including system failures or breaches, could disrupt development programs, lead to loss of proprietary information, and result in financial, legal, business, or reputational harm ⁷⁶. The company's intellectual property rights, including 119 patents in the U.S. and 130 abroad ⁷⁷, are critical, and failure to protect or enforce them could allow competitors to use MST technology without payment, weakening the company's competitive position ⁷⁸.

Management's message to shareholders conveys a focus on the commercialization and licensing of its proprietary Mears Silicon Technology (MST) within the $700+ billion semiconductor industry, particularly emphasizing its potential to address key engineering challenges and enable smaller, faster, more reliable, and power-efficient transistors. The company highlights its license and royalty-based business model, aiming for upfront license fees and ongoing royalties from commercial agreements. Despite a net loss of approximately $20.2 million ⁷⁹ in 2025 and an accumulated deficit of approximately $241.7 million ⁸⁰, management believes that, following a registered direct offering on February 24, 2026, which generated net proceeds of approximately $23.6 million ⁸¹, the company has sufficient capital to fund its current business plans for at least the next 24 months ⁸². Key strategic priorities include advancing existing joint development agreements and integration licenses to commercial, royalty-bearing stages, as well as expanding into new application areas such as compound semiconductors like GaN-on-Silicon substrates. The strategic marketing agreement with a global leader in chip fabrication technology, focused on GAA and DRAM customers, is emphasized as a means to accelerate MST adoption and increase market reach.