Technology services and solutions business Adisyn (ASX: AI1) appears set to broaden its exposure to the burgeoning semiconductor sector through a proposed acquisition of innovative high-tech company, 2D Generation. The deal could see Adisyn boost its penetration into target markets such as data centres, cybersecurity, and the defense industry.
The tabled acquisition builds on a previously announced collaboration between the two companies, which has since seen the duo identify significant opportunities to leverage 2D Generation’s semiconductor solutions and industry relationships to enhance Adisyn’s market offerings.
More specifically, management believes that post-acquisition Adisyn will be better placed to pursue capital-light semiconductor intellectual property (IP) solutions for the data centre, cybersecurity, and managed IT business segments, instead of competing in the high-cost infrastructure sector.
2D Generation has developed an industry-first solution enabling graphene coating in semiconductors at sub-300 degrees centigrade. This expertise, according to Adisyn, paves the way for next generation semiconductor technology capable of further miniaturisation, lower power consumption, less heat, as well as greater computational power.
In turn, 2D Generation’s patented technology boasts the potential to substantially improve efficiency of data centres and generative artificial intelligence (AI) solutions, as well as hosting a string of other cutting-edge technological applications.
Management added that the existing generation of AI chips is expected to reach their useful limits by the end of the decade, if not sooner.
Furthermore, 2D Generation is a partner in the European Union’s joint undertaking known as ‘ConnectingChips’, specifically formed and funded to fast-track the next generation of semiconductor chips needed to better manage rising computer processing requirements and increased speed, whilst also reducing power consumption.
Other partners involved in the ConnectingChips initiative include global tech titan NVIDIA, Dutch semiconductor manufacturing business NXP, and French automotive supplier Valeo.
As things stand, Adisyn’s proposed acquisition of 2D Generation still has some wrinkles to iron out with final negotiations continuing. However, the duo expects a legally binding agreement to be wrapped up within three weeks.
In anticipation of a finalised agreement, Adisyn has also launched a capital raise in the form of a ‘placement’ that will see the group raise $3 million through the issue of 60 million new shares at an issue price of 5c per share. This represents a nine per cent discount to Adisyn’s last closing price and a six per cent premium to its five-day volume-weighted average price.
Participants in the placement will also receive one free option for every four shares subscribed to, exercisable at 7.5c per share withing three years of the issue.
Conclusion of the capital raise is subject to the two businesses entering a formal share purchase agreement for the proposed acquisition. 2D Generation’s chairman and chief executive officer, Arye Kohavi, is expected to join the board of Adisyn once the deal is set in stone.
Chairperson of Adisyn, Shane Wee, said:
“The collaboration with 2DG and Arye’s team is a truly transformative partnership. Their access to cutting-edge advancements in AI semiconductor technology positions AI1 at the forefront of the industry, particularly in sectors such as defense, data centers, and all chip-driven applications. This enables us to lead in delivering solutions that are faster, more compact, and energy efficient. Moreover, the ability to coat interconnects with graphene at temperatures below 300 degrees is a critical development, one that is indispensable for the future evolution of the industry.”
Based on data from the US Census Bureau, expenditure on data centres is projected to reach more than US$130 billion by the end of this year and rise by 763 per cent over the next five years to surpass US$1 trillion.
Furthermore, recent research by Morgan Stanley found that electricity consumption by American data centres is set to triple by the end of the decade from 2022 levels, to potentially reach 390 terawatt hours (TWh) and represent some 7.5 per cent of the nation’s overall electricity demand.
According to Adisyn, this surge is predominantly driven by the mammoth computational power needed for running generative AI models that use specialised hardware. It added that the growth of generative AI’s energy needs is expected to continue rising at an annual rate of 70 per cent over the next three years.
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