Audio Pixels (ASX:AKP) - Chair, Fred Bart
Chair, Fred Bart
Source: Electro Optic Systems
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  • Audio Pixels (AKP) share price has dropped after releasing its March quarter results
  • Over the quarter, AKP saw delays in its packaged chips from an overseas vendor for its MEMS digital speaker
  • The company and its packaging partner have spent over five years developing and refining an automated packing process for the chips
  • Initially, COVID-19 delayed the packaged chips from arriving in December, while logistical issues stopped the product from arriving in February
  • The the now-packaged chips have since arrived from the Israel-based vendor and have proved to be effective at protecting the MEMS chips from environmental hazards, such as dust particles and humidity
  • However according to the company, unprecedented production demands the partner have prevented AKP from using this packaging line.
  • At the end of March, AKP had $3.2 million in cash and equivalents
  • On the market today, AKP is down 11.2 per cent and is trading at $22.95 per share

Audio Pixels (AKP) share price has dropped after releasing its March quarter results.

The company is a world-leader in digital loudspeaker technologies. Its technologies use entirely new techniques to generate sound waves directly from a digital audio stream, using microelectromechanical structures (MEMS).

Over the quarter, AKP saw delays in its packaged chips from an overseas vendor. The packaged chips make up AKP’s MEMS digital speaker and are sourced from a third-party in Israel.

Initially, COVID-19 delayed the packaged chips from arriving in December, while logistical issues stopped the product from arriving in February.

Once AKP received the chips, the product proved effective in protecting the MEMS from environmental hazards, such as dust particles and humidity.

“While the impact on our MEMS and ASIC wafer production has so far been manageable, the adverse effect on the packaging of our chips has been dramatic,” AKP told the market.

The company and its packaging partner have spent over five years developing and refining an automated packing process for the chips. However, unprecedented production demands the partner have prevented AKP from using this packaging line.

While AKP has plans in place to meet future mass production demands, its short-term options to augment packaging were extremely limited.

“Extending packaging capacity isn’t as simple as adding another production line or adding another vendor, as beyond the fact that seemingly the entire supply chain including equipment vendors are already at full capacity, and that it can take many months to order, receive and bring new equipment online,” AKP explained

“Unlike traditional semiconductor chips, the packaging of a MEMS device such as ours necessitates very specific and unique requirements,” it added.

AKP expressed gratitude to the Israel-based packaging vendor that agreed to support the company though this crisis.

Despite this commitment, it takes many iterations to get the process correct and stable, during which a large number of MEMS must be sacrificed.

Until such time that the process is reasonably reliable, the MEMS chips used to develop the packaging process are of the prior generation, which, according to the company, are undesirable for public demonstration of its technologies.

Over the quarter, the company spent $1.4 million, with majority going towards research and development.

At the end of March, AKP had $3.2 million in cash and equivalents.

On the market today, AKP is down 11.2 per cent and is trading at $22.95 per share at 1:07pm AEST.

AKP by the numbers
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