Is AIM-listed chipmaking minnow Sondrel’s technology coming to a brain implant near you?
Yes, according to a Daily Mail feature quoting “a source with knowledge of the matter”, who revealed that Sondrel played a key part in developing Tesla boss Elon Musk’s brain–computer interface Neuralink.
According to sources, Musk called on Sondrel to lend its highly specialised knowledge of bespoke microchip designs to Neuralink, which was successfully implanted into a patient's brain for the first time last Sunday.
“Sondrel solved a problem that others could not, and that was necessary for the finished product, so it played a pretty significant role,” said the insider.
None of this is confirmed by the way.
Speaking on “recent press speculation”, Sondrel said it “remains one of only a few companies capable of designing and supplying higher-spec, complex chips built on the most advanced semiconductor technologies, and the group's customer base continues to include leading global technology brands”.
The company “remains encouraged that demand for Sondrel's ASIC services, including in the US”, where several new application-specific integrated circuit (ASIC) business opportunities are “at advanced stages of negotiation”.
“The Group does not comment on the identity of customers,” stated Sondrel.
The rumours are not unprecedented though.
In a trading update published earlier this week, Sondrel boss Graham Curren said: “We have made good progress on the ASIC project with the automotive Tier 1 supplier”.
Last October, Sondrel announced its involvement with Arm Holdings PLC (NASDAQ:ARM)’s Total Design ecosystem.
“These new high-performance Arm cores will enable the group to design next-generation chips for demanding, compute-intensive applications and enable our customers to rapidly bring next-generation products to market,” Curren said of the partnership.
He added: “Sondrel is one of the few ASIC design houses with a full turnkey offering that has access to these advanced cores and this demonstrates the group's position as a leading player in the semiconductor market."
Once again, none of this directly implies a relationship with Musk, but the feeling is that big things are cooking for Sondrel.
To that end, Curren said he has “confidence” in Sondrel’s medium-term ambition to achieve £100 million in annual revenues in a September 2023 update.
That would be a 670% increase compared to Sondrel’s £13 million top-line forecast for the current financial year.
The market shrugged his comments off at the time, but following the Mail’s article, shares were catapulted 140% today.
Another thing to consider is that Sondrel’s shares took a massive battering last August, when the group announced that three of its ASICs customers pushed their deliveries back between six to 12 months, citing increasing inflation and decreasing end-market demand for Sondrel’s technology.
As a result of these project delays, Sondrel conceded that full-year revenues would be “substantially below current market expectations”, with a corresponding impact on full-year losses.
Even with today’s 140% rally, at 13.85p, shares are significantly below the pre-August 56p spot price.