Thread by @realmemes6

A break from my regular $AMD coverage. I’ve been looking at $ACEV for a while and I like it, it’s now my 2nd largest holding. It’s a SPAC. If you've heard that but haven't learned about them, overdue to learn. They can be good in this market, with downside protection until merger

$ACEV is taking Achronix public. Achronix is an FPGA company that’s been around for a while. Much smaller than Altera (acquired by Intel) and Xilinx (being acquired by AMD), it is arguably the last independent high performance FPGA company.

The investor presentation is here: achronix.com/sites/default/… I’m not going to rehash it, take a look yourself. But I will go through what I see as the biggest risks, and some big benefits that aren’t clear in the presentation.

Achronix profitably ships real products. Gross margins are almost 80%. They are releasing a new set of FPGAs on TSMC N7 and have also released FPGA designs as IP to include in a custom SoC. This video explains what they do well, worth a watch

People seem to like their product, it is well suited for some strongly growing markets. Much of their forward projections, at least for this year and next are deals that are already done. Extra sales can boost their profit a lot.

Achronix suffers from a lack of mindshare and confidence that they will still be around in a few years to furnish their product. The SPAC will give them enough money to fund operations for years without revenue, and give them more awareness as a public company (AKA meme stonk).

Achronix can be like ARM for FPGA, licensing IP. AMD taking Xilinx private is good for Achronix, IMO. Xilinx probably won’t be able to sell FPGA IP. Anyone that wants to integrate FPGA into ARM or RISC, or is named Jensen Huang is going to want to look at Achronix IP.

AMD (and presumably Intel) will likely incorporate FPGAs into their chip offerings, and again I see this as a positive for Achronix. This will help to mainstream FPGA use, and as experience grows, Achronix will be there for anyone making their own chips.

Ok, risks. The last few years Intel has been *their only client*. Yikes. But they appear to already have some additional deals, and with new products, especially with eFPGA designs on TSMC, they just need the marketing and mindshare that this IPO will give them.

Their financial projections include 0 new deals from Intel. Intel has their own internal FPGA company, why are they buying from Achronix? But they have been. Either Achronix is providing something Altera cannot, or Intel just needed something that was ready to go.

New orders from Intel would be a big upside surprise, and that depends on Intel not getting their stuff together and using their internal IP. So. What are the odds that happens. I think of $ACEV as an indirect long on Intel dysfunction. It doesn't need that, but it benefits.

Maybe FPGA's just don’t catch on (Lisa Su thinks otherwise). Maybe Achronix’s new products are totally broken. I like $ACEV at the $11.40 it’s at, market cap post merger of around $2.25B, knowing I can redeem shares for ~$10. A few big deals and Achronix is worth double that.

Here's an article from @dylan522p with his take: semianalysis.com/achronix-goes-…

One more thing, SPAC stands for
S - Read
P - The
A - SEC
C - Filings
SPACs tend to be very similar, once you know how one works you have a good handle on others. There are differences and you should read the SEC filings. Here are $ACEV’s filings: sec.gov/cgi-bin/browse…