NVE Corporation Analysis

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NVE Corporation was founded in 1989 in Eden Prairie, Minnesota. Originally called Nonvolatile Electronics, the company changed its name to NVE Corporation after going public on the Nasdaq stock exchange in 2000; their ticker symbol is NVEC. The word “nonvolatile” refers to memory that retains information after a power source has been removed. Since their founding, NVEC has been granted over $50 million in government research contracts, especially for their research in the nonvolatile memory called MRAM or magnetoresistive random access memory. These contracts helped NVEC develop an intellectual property portfolio and accumulate over 50 patents regarding spintronic and MRAM technology. Recently the company has reduced their dependence on research contracts and has grown tremendously through product sales, averaging an increase of 25% top-line growth the past three years.

The company develops and sells products that utilize “spintronics”, a nanotechnology which relies on electron spin rather than electron charge to gather, store and send information. NVE Corp. manufactures high performance sensors and couplers that are used to acquire and transmit data. Additionally, they license their MRAM technology to various companies including Avago Technologies, Honeywell, Cypress Semiconductor Company, and until 2006, Motorola. As of fiscal year 2008, product sales accounted for 85% of revenue and research and development contracts accounted for 15%. They currently have 50 employees and generate sales in over 75 countries.

The electronics industry relies heavily on devices that acquire, store and transmit data. NVE Corp’s spintronics technology focuses on magnetic sensors, couplers, and memory which perform these activities w...

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...y without booting up, enabling a user to simply push a button and the computer will turn exactly as it was when it was turned off. Mobile devices will benefit from MRAM as it has less power demands, allowing for much longer uses on a single charge. Further, MRAM’s durability and low power needs make it ideal for defense and aerospace technologies as well as for the primary data storage technology for satellites.

NVE Corp. has patents on advanced MRAM designs which include vertical transport MRAM, magnetothermal MRAM, and spin-momentum transfer MRAM. These advanced designs are aimed to resolve the current hindrances of MRAM technology; mainly, lowering manufacturing costs while increasing memory density. Due to MRAM’s more expensive production costs and larger relative size than DRAM and Flash RAM, they are slowly being integrated into electronics devices.

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