In last Friday’s press release, NVE Corporation (NASDAQ: NVEC, $47.70) claimed that Magnetic or Magnetoresistive Random Access Memory (“MRAM”) chips are fabricated using nanotechnology and that spintronics is a nanotechnology. In fact, nanotechnology is not used to fabricate MRAM chips and spintronics is not a nanotechnology. NVE had not used the word nanotechnology in its SEC filings or press releases before July 25, 2003. The mention of the “nano” word coincides with the commencement of NVE’s newsletter and Internet based stock promotion, which personally benefited NVE’s stock selling leaders James Daughton and Daniel Baker. Perhaps NVE bases its nanotechnology claims on its own definition created for stock promotion purposes.
In the release NVE also said that they "believe" Motorola, Inc. (NYSE: MOT, $16.94) is using their intellectual property and that they "expect" to get paid. Immediately investors have to be thinking: Why does NVE have those beliefs and expectations? If they are so involved in MRAM shouldn’t they know this for a fact? After all, NVE didn’t say they “believe” they are in nanotechnology or they “expect” to be in nanotechnology. NVE’s statements are wrong but at least they were strongly worded. Could NVE be hiding something? Why don’t they disclose some facts? Why are they so desperately trying to convince investors? How can NVE admit that their claim was totally overblown now that we know they sold their stock?
If NVE is as important to spintronics and MRAM’s development as they claim their alleged discoveries would be easy to independently verify. They are not. Today, we published two appendices to this research report. Appendix A is titled “NVE is not involved in nanotechnology” and explains why spintronics is not nanotechnology. Appendix B is titled “NVE’s MRAM contribution claims are unfounded.” Appendix B identifies eight (8) inventors that materially contributed to the advancement of MRAM beginning 148 years ago and leading to the first commercialization last year. Appendix B describes the earliest mathematical achievements and the most recent manufacturing breakthroughs. It turns out that real valuable inventions are easier to understand and more tangible than NVE’s MRAM fantasy-duo James Daughton and Daniel Baker want you to know. The development of MRAM’s basic technology and commercialization is an extraordinary story of individual scientific achievement, alliances between great companies, government support and international cooperation. It does not include NVE.
MRAM’s history is not a story of nanotechnology. MRAM comes from well understood physics. It involves metal, magnets and semiconductor manufacturing. In this case, knowing that it could be done was not the issue. The memory market is extremely cost competitive. Manufacturing issues and costs still remain MRAM’s primary concerns.
As Appendix B shows, NVE is totally absent from the MRAM story. It took about 15 years after the first GMR was sold in a real memory product (not special use imbedded memory but computing memory) for a semiconductor manufacturer to be able to fabricate a competitive memory chip using spin in metal to replace charges in capacitors. Hundreds of patented and unpatented discoveries led to the new MRAM products.
Whether you study MRAM’s early origin or Motorola’s most recent manufacturing work, there is no mention of any NVE MRAM invention. There is nothing that indicates, much less verifies, NVE’s claim. On the contrary, the evidence points to the exact opposite conclusion. This is not a rich company in poor company clothing. NVE is a genuinely poor company and those that made up the story about it being rich have sold all or most of their stock.
Last Friday afternoon’s unwarranted stock reaction to NVE’s pathetically weak and unspecific press release only serves to raise questions about NVE’s seriousness and intent. Even without the benefit of the MRAM facts disclosed herein and in the accompanying appendices, it seems fair to ask why is NVE’s management involved in extremely questionable activities if NVE really does posses something of such great value? We remain fully committed to our opinion that NVE possesses no valuable MRAM intellectual property and that its shares are worth no more that one tenth of their current price.