---
title: "Q&A about capacitors and electrolyzers"
canonical_url: "https://www.smoltek.com/qa-about-capacitors-and-electrolyzers/6103/"
date: 2023-10-20
author: "Thomas Barregren"
featured_image: "https://www.smoltek.com/wp-content/uploads/2023/10/tech-plat-growing-jpg.webp"
categories:
  - name: "IR Blog Posts"
    url: "https://www.smoltek.com/category/ir-blog-posts.md"
tags:
  - name: "cnf-mim"
    url: "https://www.smoltek.com/topic/cnf-mim.md"
  - name: "ecm"
    url: "https://www.smoltek.com/topic/ecm.md"
  - name: "hydrogen"
    url: "https://www.smoltek.com/topic/hydrogen.md"
  - name: "semiconductor"
    url: "https://www.smoltek.com/topic/semiconductor.md"
---

# Q&A about capacitors and electrolyzers

At the begin­ning of Octo­ber 2023, Smoltek’s CEO, Håkan Pers­son, talked at the one-day con­fer­ence Aktieda­gen Lund orga­nized by the Swedish Share­hold­ers’ Asso­ci­a­tion. Some of what he said is prob­a­bly known to you as a well-informed share­hold­er or investor, but there are also some insights, if not news, worth noting.

So, I sat down with Håkan to fol­low up on some points he made in his pre­sen­ta­tion. In total, we cov­ered sev­en top­ics in depth. You can read the ques­tions and answers in this post.

But before doing that, you may want to check out his presentation.

Watch Håkan Persson’s talk at Aktieda­gen Lund on Octo­ber 9, 2023.

## [](https://www.smoltek.com#why-capacitors-and-electrolyzers)Why capacitors and electrolyzers?

*In your talk, you say that Smoltek has explored many appli­ca­tion areas for its patent-pro­tect­ed tech­nol­o­gy – grow­ing car­bon nanofibers on dif­fer­ent mate­ri­als. Among all these, Smoltek has focused on decou­pling capac­i­tors and elec­trolyz­er cell mate­ri­als. Why?*

We have a long list of pos­si­ble appli­ca­tions for our tech­nol­o­gy. It ranges from heat dis­si­pa­tion to biosen­sors. Many items on the list are relat­ed to semi­con­duc­tors. This is because Smoltek has grown out of research in this area at Chalmers Uni­ver­si­ty of Tech­nol­o­gy. But there is also a lot on the list that is not relat­ed to the semi­con­duc­tor industry.

To explore the oppor­tu­ni­ties out­side the semi­con­duc­tor indus­try, we formed a sep­a­rate busi­ness divi­sion, *Smoltek Inno­va­tion*, to iden­ti­fy an immi­nent need that we can address. Our analy­sis showed that the glob­al hydro­gen mar­ket urgent­ly needs a bet­ter elec­trolyz­er cell mate­r­i­al where we can make a big dif­fer­ence. So, we decid­ed to focus on that mar­ket, and con­se­quent­ly, we changed the name of the busi­ness divi­sion to *Smoltek Hydro­gen*.

Even before that, we had formed a sep­a­rate busi­ness divi­sion, Smoltek *Semi*, to do the same for the semi­con­duc­tor indus­try. We found that met­al-insu­la­tor-met­al (MIM) capac­i­tors, used by the semi­con­duc­tor indus­try, are a huge mar­ket where we can make a big impact.

That’s why we are pur­su­ing these two mar­kets with car­bon nanofiber-enhanced cell mate­r­i­al and car­bon nanofiber-enhanced MIM capac­i­tors, respectively.

We are focus­ing exclu­sive­ly on these two busi­ness divi­sions for now and in the fore­see­able future. But we have many more ideas on our list, so we expect to cre­ate more busi­ness divi­sions in the future. You can think of Smoltek as an incu­ba­tor for car­bon nanofiber-rein­forced solu­tions for var­i­ous applications.

## [](https://www.smoltek.com#still-the-worlds-smallest-capacitor)Still the world’s smallest capacitor?

*In 2021, Smoltek pre­sent­ed the world’s thinnest capac­i­tor as a ful­ly usable pro­to­type. In your pre­sen­ta­tion, you say Smoltek can man­u­fac­ture ultra-thin decou­pling capac­i­tors more effi­cient­ly than **com­pet­ing** tech­nolo­gies. Does this mean that com­peti­tors have caught up?*

No, there are cur­rent­ly no thin­ner capac­i­tors on the open mar­ket than our prototype. 

But there are strong con­tenders whose capac­i­tors can also be char­ac­ter­ized as ultra-thin. These capac­i­tors are man­u­fac­tured by dig­ging deep trench­es in sil­i­con. This is why they are called *deep trench­es capac­i­tors* or *sil­i­con capac­i­tors*. They are not wide­ly used because of their costs, and we believe there is a lim­it to how far they can go.

We don’t feel com­peti­tors breath­ing down our neck because our CNF-MIM capac­i­tors have two com­pet­i­tive advan­tages over sil­i­con capacitors.

First, CNF-MIM capac­i­tors are expect­ed to be cheap­er to pro­duce, so we can com­pete on price and still have a good mar­gin for capac­i­tors aimed at high-end device segments.

Sec­ond, our capac­i­tors will have sig­nif­i­cant­ly high­er capac­i­tance per unit area and unit height.

![Scanning electron microscope image of Smoltek's prototype capacitor. Measurement line shows a height of 38.2 µm.](https://www.smoltek.com/wp-content/uploads/2023/04/sem-image-of-the-cnf-mim-prototype-only-38-microns-thick-1200x800.webp)

Scan­ning elec­tron micro­scope image of Smoltek’s pro­to­type capac­i­tor that is thin­ner than any com­mer­cial­ly avail­able capacitor.

## [](https://www.smoltek.com#why-the-premium-segment-except-apple)Why the premium segment except Apple?

*You men­tioned that Smoltek tar­gets the pre­mi­um seg­ment, except Apple, with its CNF-MIM capac­i­tors. Can you explain that strategy?*

I talked about the pre­mi­um seg­ment of the smart­phone mar­ket. We define the seg­ment as smart­phones that 2023 cost more than 300 USD to buy from wholesalers.

There are hun­dreds of brands in this mar­ket seg­ment. The largest is Sam­sung. The best-known is Apple. But there are also oth­er big play­ers like Xiao­mi, Oppo, and Vivo, as well as well-rec­og­nized brands such as Google Pix­el and Sony Xperia.

It is this mar­ket seg­ment that we address with our CNF-MIM capac­i­tors. With one cru­cial excep­tion: Apple.

Of course, Apple knows what we are doing. But right now, we choose to focus on the rest of the pre­mi­um seg­ment because we believe Apple has a tight part­ner­ship with a capac­i­tor man­u­fac­tur­er and is not like­ly to jump ship any time soon.

Although Apple rep­re­sents one-third of the pre­mi­um seg­ment, the remain­ing mar­ket is huge. We esti­mate that the oth­er pre­mi­um smart­phone man­u­fac­tur­ers pur­chase between 3.5 and 4.5 bil­lion capac­i­tors annu­al­ly. And our goal is to cap­ture one-third of that mar­ket eventually.

We are con­sid­er­ing mak­ing smart­phones our first tar­get mar­ket because they great­ly need ultra-thin capac­i­tors. And we nar­rowed it down to the pre­mi­um seg­ment because of the high­er gross prof­it margin.

How­ev­er, the mar­ket for CNF-MIM does not end with smart­phones. We are explor­ing oth­er pos­si­bil­i­ties and have iden­ti­fied more places where our capac­i­tor tech­nol­o­gy can make a big dif­fer­ence. So, the mobile mar­ket is just the beginning.

![Slide 7 in Håkan's presentation from Aktiedagen Lund on October 9, 2023](https://www.smoltek.com/wp-content/uploads/2023/10/aktiedagen-lund-9-okt-2023-bild-7.png)

Slide from Håkan Persson’s pre­sen­ta­tion at Aktieda­gen Lund on Octo­ber 9, 2023.

## [](https://www.smoltek.com#what-planning-has-smoltek-and-yageo-initiated)What planning has Smoltek and Yageo initiated?

*You say that Smoltek and YAGEO have start­ed plan­ning for the next step. What does that mean?*

Let me start by reca­pit­u­lat­ing where we are today and where we are going.

YAGEO wants the right to sell our CNF-MIM capac­i­tors when that time comes. And we need a dis­trib­u­tor who can sell and ship our capac­i­tors to the big play­ers. We have there­fore agreed on a col­lab­o­ra­tion with two phases.

The first phase is to devel­op and pro­duce engi­neer­ing sam­ples of CNF-MIM capac­i­tors and bring them to the mar­ket. This allows poten­tial cus­tomers to test and design them into their appli­ca­tions. This phase is gov­erned by a joint devel­op­ment agree­ment (JDA) that we signed in August 2022.

The sec­ond phase is form­ing a joint ven­ture to mass-pro­duce our CNF-MIM capac­i­tors. We plan for a *fab­less* pro­duc­tion, which means the man­u­fac­tur­ing will be done by sub­con­trac­tors rather than in-house. Pro­duc­tion will start when we have a *design-win*, when some­one has designed a future prod­uct with our CNF-MIM capacitors.

Right now, we are in the first phase. We have made the first batch of just over a quar­ter of a mil­lion capac­i­tors with­out car­bon nanofibers. We are cur­rent­ly mak­ing a sim­i­lar batch, now with car­bon nanofibers. These will be test­ed and eval­u­at­ed by YAGEO, and when they meet the per­for­mance met­rics out­lined in the joint devel­op­ment agree­ment, we will enter phase 2.

In par­al­lel with the devel­op­ment of engi­neer­ing sam­ples, YAGEO and Smoltek have already begun plan­ning the next step to avoid los­ing time.

The fact that YAGEO is already pre­pared to put in the resources and do the work involved in plan­ning for phase two is an excel­lent tes­ti­mo­ni­al from YAGEO.

## [](https://www.smoltek.com#what-is-electrolyzer-cell-material)What is electrolyzer cell material?

*Let’s switch gears and talk about the hydro­gen indus­try. Smoltek devel­ops and plans to sell elec­trolyz­er cell mate­r­i­al. What is it?*

It’s a lay­er of cor­ro­sion-coat­ed car­bon nanofibers that pen­e­trates the mem­brane on the anode side. On the out­side of the met­al are atoms of iridium.

Irid­i­um is a scarce and cost­ly earth met­al used as a cat­a­lyst in a par­tic­u­lar type of elec­trolyz­er. Smoltek’s cell mate­r­i­al will use 95 per­cent less irid­i­um than exist­ing tech­nol­o­gy, thus con­serv­ing a finite resource and sav­ing vast amounts of mon­ey for pro­duc­ers of electrolyzers.

This mar­ket is mas­sive. It is not just about future ener­gy sys­tems and trans­porta­tion. There is a huge need here and now. Hydro­gen has been used in indus­try for over 100 years.

But 95 per­cent of that hydro­gen is pro­duced from fos­sil fuels. That is not sus­tain­able. There­fore, the indus­try is fac­ing a gigan­tic tran­si­tion to elec­trolyz­ers that pro­duce fos­sil-free hydro­gen. And that’s when irid­i­um is needed.

### Read more about electrolyzers

*Fos­sil-free hydro­gen*, or *green hydro­gen*, is pro­duced by run­ning elec­tric­i­ty from solar, wind, or hydropow­er plants through water. This is called *water elec­trol­y­sis*. The appa­ra­tus in which it takes place is called an *elec­trolyz­er*.

There are two types of elec­trolyz­ers: an old­er type with low effi­cien­cy and uses alka­line chem­i­cals, and a new­er type that is more effi­cient and doesn’t use chem­i­cals. The new­er tech­nol­o­gy uses a *pro­ton exchange mem­brane* (abbre­vi­at­ed *PEM*), and con­se­quent­ly, it is called a *PEM elec­trolyz­er*.

PEM elec­trolyz­ers need irid­i­um as a cat­a­lyst. The met­al acts as a place for water mol­e­cules to hold on while they split into hydro­gen and oxygen.

And here is the crux: Irid­i­um costs many times more than gold because it’s so rare and hard to extract. In 2023, a sin­gle kilo of irid­i­um costs up to 200,000 euros; by 2030, just sev­en years from now, it is esti­mat­ed to cost up to 700,000 euros.

So even though cur­rent tech­nol­o­gy only needs 2 mil­ligrams of irid­i­um per square cen­time­ter of mem­brane, it is a sig­nif­i­cant cost for elec­trolyz­er manufacturers.

That’s the prob­lem we address with our cell material.

Smoltek’s cell mate­r­i­al cur­rent­ly uses 75 per­cent less irid­i­um than avail­able tech­nol­o­gy. And we expect to save up to 95 per­cent of irid­i­um com­pared to today’s exist­ing tech­nolo­gies. In this way, our cell mate­r­i­al con­serves a finite resource and saves a lot of mon­ey for elec­trolyz­er manufacturers.

## [](https://www.smoltek.com#what-prevents-competitors)What prevents competitors?

*What pre­vents com­peti­tors from mak­ing the same savings?*

The stan­dard tech­nol­o­gy uses 2 mil­ligrams of irid­i­um per square cen­time­ter. Exter­nal research insti­tutes expect this lev­el to be reduced to 0.8 mil­ligrams per square cen­time­ter by 2030. 

Improv­ing the cur­rent tech­nol­o­gy beyond this will be dif­fi­cult, and the tech­nol­o­gy has a lim­it where irid­i­um can­not be fur­ther reduced with­out severe dete­ri­o­ra­tion of the lifetime.

Com­pare that to Smoltek’s cell mate­r­i­al, which uses only 0.5 mil­ligrams already, expect­ing to reach 0.2 mil­ligrams quite soon and even­tu­al­ly 0.1 milligrams.

Our tech­nol­o­gy is pro­tect­ed by patents and pend­ing patents. And entire­ly new solu­tions require years of research and devel­op­ment. Remem­ber, we have been work­ing on car­bon nanofibers for almost 20 years.

## [](https://www.smoltek.com#whats-the-go-to-market-strategy)What’s the go-to-market strategy?

*How will Smoltek bring the cell mate­r­i­al to market?*

The approach is the same as we use for our capacitors.

We are work­ing in par­al­lel to fur­ther devel­op the cell mate­r­i­al from a lab pro­to­type to a ver­i­fied prod­uct and to devel­op an indus­tri­al process for mass pro­duc­tion. We expect to step out of the lab and take the first steps in the indus­tri­al are­na in 2024.

The goal is to be up and run­ning with mass pro­duc­tion in 2027. Before that, we will start small-scale pro­duc­tion of engi­neer­ing sam­ples and find the right part­ners to bring the cell mate­r­i­al to the world market.

![Slide 13 in Håkan's presentation from Aktiedagen Lund on October 9, 2023](https://www.smoltek.com/wp-content/uploads/2023/10/aktiedagen-lund-9-okt-2023-bild-13.png)

Slide from Håkan Persson’s pre­sen­ta­tion at Aktieda­gen Lund on Octo­ber 9, 2023.

## [](https://www.smoltek.com#over-and-out)Over and out

Sev­en ques­tions and sev­en thor­ough answers lat­er, I con­clude by remind­ing you to vis­it Smoltek’s investor rela­tions page on LinkedIn. Find [the post about this Q&A](https://www.linkedin.com/posts/smoltek-investor-relations_h%C3%A5kan-persson-ceo-of-smoltek-talked-at-activity-7121027949956349952-FWTk) and tell us what you want to know more about. I can’t promise you’ll get an answer right away or even at all. After all, Smoltek is a list­ed com­pa­ny and has many rules to con­sid­er. But we will do our best to answer every­thing we can in due course.