What happened

Shares of Atomera (NASDAQ:ATOM) have skyrocketed today, up by 36% as of 11:20 a.m. EST, after the company announced a new manufacturing deal. The joint development agreement (JDA) is with an unnamed "leading semiconductor provider."

So what

Under the JDA, the strategic partner will integrate Atomera's Mears Silicon Technology (MST) into its silicon fabrication process. The semiconductor provider has licensed the technology in order to incorporate MST into its silicon wafer manufacturing process. MST uses a material that enhances transistors to improve performance, according to Atomera.

A silicon wafer

Image source: Getty Images.

"Atomera is thrilled to join with an industry leader that has a strong record of technology innovation to extend Moore's Law," CEO Scott Bibaud said in a statement. "During this JDA, we will work together to prove the technical and economic advantage of adopting MST across multiple process technologies and business units within our partner company."

Now what

Moore's Law was an observation made by Intel co-founder Gordon Moore in 1965 that the number of transistors on a chip doubles every year, but industry observers have suggested that the trend, which has lasted decades, may soon end. Atomera says that MST extends Moore's Law by allowing semiconductor manufacturers to improve power and efficiency within the same process node.

The deal is an important milestone for Atomera, which has not generated revenue in the past two quarters while it has been focusing on commercializing MST. Bibaud had suggested on the last earnings call that a deal was imminent. Financial terms were not disclosed, but CFO Frank Laurencio noted at the time that the JDA would likely include milestone-based payments, which are difficult to forecast. As a result, Atomera's guidance calls for no revenue in the fourth quarter.

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