Background to the cREOTM Technology

Silex subsidiary Translucent Inc developed a novel set of semiconductor materials known as ‘crystalline Rare Earth Oxides’ (cREOTM) for application to the manufacturing of next generation semiconductor devices used in wireless communications, power electronics and other advanced semiconductor industries.  The cREOTM technology was the subject of an exclusive Option, License and Assignment Agreement signed between Translucent and UK-based IQE Plc (AIM:IQE) in September 2015.  IQE is the global leader in the design and manufacture of advanced semiconductor wafer products used in many of today's advanced semiconductor devices, such as smart phones and optical technologies.

In March 2018, IQE elected to purchase the cREOTM technology. The election was made in accordance with the 2015 Agreement and as a result, a payment of USD$5 million was received from IQE in September 2018 (in IQE shares). In addition, a perpetual royalty of between 3% and 6% will be payable to Translucent on the sale of any IQE products that utilise the cREOTM technology, with minimum annual royalties starting at US$400,000 due to commence being paid in FY2020.

IQE's Development of cREOTM

The cREOTM technology was successfully transferred in late 2015 to IQE's Greensboro, North Carolina manufacturing facility for the completion of product development and commercialisation activities. IQE have reported very good progress with the development and demonstration of the cREO™ technology for the integration of advanced high-performance compound semiconductor materials on silicon wafers. Product trials and preliminary qualification activities with the IQE group and with selected commercial partners continue. In addition, IQE continue to expand the intellectual property portfolio acquired from Translucent for the cREO™ technology, with the filing of numerous patents providing protection in additional applications. This will help strengthen IQE's competitive advantage as it takes the cREOTM technology to market.

IQE's initial product development and commercialisation focus for the cREOTM technology has been on applications for wireless communications devices (principally targeting next generation smart phones) and power electronics devices (for example, as commonly found in today's solar inverters and electric vehicles). IQE regards the cREOTM technology as an enabling technology that would allow IQE to make a step change for the integration of various compound semiconductor devices with large scale silicon wafer-based production techniques. This has the potential to significantly lower the cost of production of next generation devices such as wireless chips. 

IQE is committed to the potential of the cREOTM technology and continue to spend significant amounts on the development of cREOTM and other complementary materials technologies. Whilst the timelines to commercialisation are uncertain and subject to change, IQE believes that an optimal route to cREOTM commercialisation should occur within a 2 to 3-year timeframe.

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