For many investors, the word "silicon" calls to mind the computer revolution of the 80s and 90s. It represents the microscopic engine behind our laptops and smartphones.
But for Archer Materials (ASX: AXE), silicon represents something entirely different: a potential lifeline for kidney disease patients and a pathway to scalable manufacturing for a medical device.
In this update, we are looking at Archer’s "Biochip" technology.
We want to move past the scientific jargon to answer the fundamental questions for investors: What problem does this solve? Is it commercially viable? And why is the company’s recent breakthrough in silicon integration a pivotal moment?
The "Silent Killer": A global health crisis
To understand the value of the Biochip, you first have to understand the scale of the problem. Chronic Kidney Disease (CKD) is often called a "silent killer," affecting more than 850 million people globally. In the US alone, the renal disease market is estimated at over US$80 billion annually.
For patients with advanced CKD, managing potassium levels is critical. The kidneys are responsible for filtering potassium from the blood. When they fail, potassium levels can spike dangerously high (a condition called hyperkalemia), which can lead to heart issues or cardiac arrest.
Currently, the main way for these patients to check their potassium is to visit a hospital or clinic for a blood draw. There is no "diabetic style" glucometer for potassium. Patients often live with anxiety between visits, not knowing if a meal has pushed them into the danger zone.
Archer is stepping in to develop a "lab-on-a-chip." This is a disposable cartridge that would allow patients to test their potassium levels at home using a simple finger-prick. The potential savings for the healthcare system are massive, estimated at US$3 billion attributed to potassium-related care by reducing avoidable hospitalisations.
The Technology: Why silicon is key
For the past few years, Archer has been known for its work with graphene, a material that is incredibly sensitive to biological changes. Graphene is excellent at detecting things, but it can be difficult to manufacture reliably at massive scale.
This is why Archer’s recent progress with silicon is significant.
Archer has been developing a parallel track using silicon-based sensors. Recently, their silicon "ion-selective" Biochips, fabricated by their partner IMEC in Belgium, met the critical clinical accuracy standard known as CLIA (±0.3 mM).
Here is why this matters:
1. Proven Manufacturing
Silicon is the foundation of the global electronics industry. The world has spent 50 years perfecting how to print silicon chips cheaply and reliably. By proving their technology works on silicon, Archer taps into a global supply chain that already exists. They don't need to invent a new factory; they can potentially use the ones that are already building chips for major tech companies. This de-risks the commercial path significantly.
2. Speed and Stability
While graphene is hyper-sensitive, the silicon version of the chip has shown practical advantages. Recent tests showed the silicon chips had faster readout times and shorter "stabilisation" times (about 30 minutes) compared to the longer conditioning required for graphene. In a consumer medical device, speed and ease of use are vital.
3. Cost at Scale
Silicon manufacturing is a volume game. The more you print, the cheaper they get. For a disposable medical test to be viable for insurance reimbursement, the cost per unit needs to be low. Silicon offers a clear path to those low unit costs.
The 'Dual-Track' Strategy
One of the prudent aspects of Archer’s strategy is that they are not betting everything on a single material. They are pursuing a dual-track approach, developing both graphene and silicon sensors simultaneously.
Think of it like a hybrid car engine. You have the electric motor (graphene) for high performance and sensitivity, and the combustion engine (silicon) for reliability and range.
- The Graphene Track: Archer has achieved some solid engineering here. They have miniaturised their graphene chips from a chunky 10 x 10 mm down to a tiny 1.5 x 1.5 mm. This 97% reduction in size means they can now fit approximately 1,375 chips on a single 4-inch wafer, compared to just 45 previously. They have also reduced the variability between chips from roughly 15% down to 1.5%, a major leap in consistency.
- The Silicon Track: As noted, this track offers the stability and established manufacturing protocols of the semiconductor world.
By running both tracks, Archer gives itself "manufacturing optionality". If one material proves too expensive or difficult to scale for a specific market, they have a backup.
The Business Model: 'Razor and razorblade'
Archer is aiming for a model familiar to many investors: the "Razor and Razorblade" approach.
- The Razor: The handheld reader device.
- The Razorblade: The disposable Biochip cartridge. A CKD patient might need to test themselves several times a week. Every test requires a new cartridge.
This creates a stream of recurring revenue. Archer’s role is to provide the intellectual property (IP) and the chip design—the "brains" inside the cartridge. They intend to license this technology or partner with major diagnostics manufacturers rather than trying to build a global sales force themselves.
Validation by Association: The partners
In the small-cap biotech and semiconductor space, a company is often judged by the company it keeps. Archer has assembled a roster of partners that lends credibility to their claims:
- IMEC (Belgium): A global semiconductor research hub fabricating the silicon Biochips.
- VTT (Finland): A leader in CMOS integration. They are helping Archer combine the sensing part of the chip with the electronic "readout" part on a single wafer.
- Hylid Diagnostics: Based in North America and Europe, Hylid is helping design the cartridge and providing guidance on regulatory pathways. They are also working on detecting "haemolysis" (damage to blood cells), which is vital for test accuracy.
- Paragraf (UK): Experts in graphene helping Archer ensure the quality of the graphene devices meets industrial standards.
The Timeline
Investing in medical technology requires patience. It requires rigorous testing to ensure patient safety. Based on Archer’s current roadmap, here is the outlook:
- End of 2025: The immediate goal is to demonstrate "lab-grade" accuracy in human blood samples and have a working prototype of the cartridge.
- Early 2026: We should see the first fully integrated prototypes - chips inside cartridges, talking to readers.
- 2026 Onwards: Archer plans to initiate formal clinical trials. These are necessary to prove to regulators that the device works on real patients.
- 2027–2030: If trials are successful, this is the window for commercialisation and pilot manufacturing.
Investor Takeaway
For investors, the appeal of Archer Materials lies in balancing high-growth potential with risk management.
The silicon integration announcement is a pivotal moment because it acts as a safety net. It tells the market that Archer isn't just relying on exotic materials. They are anchoring their innovation in silicon—the most reliable, scalable and understood material in the technology world.
While commercial revenues are still a few years away, the company is ticking the boxes required to get there: miniaturisation, accuracy, and now, manufacturability.
For those looking to add a topical, high-potential play to a diversified portfolio, Archer’s Biochip offers a compelling narrative of using proven industrial processes to solve a modern medical crisis.
