Following a "Tech Talk" hosted with Dr. Laura Markirimi, SVP of Engineering at Adeia Inc. (ADEA:NASDAQ), ROTH Capital Partners is maintaining its Buy rating and US$34.00 price target on the shares.
Analyst Scott Searle comes away from the event more positive on both the Hybrid Bonding (HB) and Direct-to-Chip (DTC) cooling outlook for 2026 and beyond, highlighting that all roads for higher-density memory and next-generation data center and AI processing lead to hybrid bonding, and that RapidCool's DTC adoption appears to be a matter of "when, not if."
Hybrid Bonding: The Core Thesis
Hybrid bonding — which dates to Adeia's 2015 acquisition of Ziptronics for US$39 million by then-parent Tessera — now encompasses a portfolio of over 1,100 patents covering methods, processes, and chemistries.
The technology enables wafers and dies to be bonded at fine pitch geometries down to 1 micron, delivering more than 30% power consumption savings, improved speed and latency, better thermal characteristics, and lower costs versus legacy interconnect and packaging solutions. With data centers estimated to have consumed over 4% of US electricity in 2023 and demand potentially tripling by 2028, the analyst views power efficiency as a key structural driver of HB adoption.
Logic Chiplets: AMD Deal as a Seminal Catalyst
The recently announced multi-year licensing agreement between Adeia and Advanced Micro Devices Inc. (AMD:NASDAQ) for Adeia's comprehensive semiconductor IP portfolio is described as "a seminal event" that validates HB in logic applications. While financial terms were not disclosed, Searle estimates quarterly royalty payments could begin at approximately US$2 million at the low end before ramping to US$5–10 million or more per quarter as HB is adopted more broadly across AMD's product portfolio.
The analyst views the AMD deal as a precursor to additional logic licensing agreements in 2026, with Broadcom Inc. (AVGO:NASDAQ) cited as a likely near-term candidate, alongside Intel Corp. (INTC:NASDAQ), Marvell Technology Inc. (MRVL:NASDAQ), vertically integrated hyperscalers including Amazon.com Inc. (AMZN:NASDAQ), Alphabet Inc. Class A (GOOGL:NASDAQ), and Meta Platforms Inc. (META:NASDAQ), and potentially Nvidia Corp. (NVDA:NASDAQ). Longer term, HB is expected to expand beyond data centers into edge processing and autonomous applications.
High-Density Memory: NAND and HBM DRAM
Within high-density memory, hybrid bonding is gaining adoption across both NAND and HBM DRAM. In 3D NAND, Kioxia and Western Digital Corp./Sandisk (SNDK: NASDAQ) are current users, with adoption yielding better performance, including more than 30% power reduction and market share gains. By 2030, Allied Market Research projects 3D NAND to represent a US$78 billion market, and Adeia has approximately 90% of the market currently licensed.
Near-term revenue growth is expected to be driven by Kioxia and Sandisk, which together hold more than 25% combined market share, as they ramp production. SK Hynix is expected to follow with HB-enabled solutions in 2026–2027.
Separately, Samsung Electronics Co. Ltd, SK Hynix, and Micron Technology Inc. (MU:NASDAQ) are already licensed under pre-existing agreements, though with no per-unit royalties — a dynamic expected to shift materially when renewals occur in 2027 and beyond.
On the DRAM side, HB adoption is expected to coincide with the commercialization of HBM4e, beginning in 2027. Over 90% of the DRAM market is currently licensed for existing Adeia solutions (primarily wafer-level packaging), but those deals predominantly involved one-time fixed fees that expire in 2027–2028. The analyst anticipates renegotiated agreements will carry meaningfully better unit-based economics. Searle addresses recent investor concerns about JEDEC's potential relaxation of HBM thickness standards, characterizing them as "a red herring" that misses the core driver of HB adoption — performance benefits, including power and thermal efficiency, not form factor — and notes that HB adoption timelines in HBM DRAM remain unchanged.
TAM and Timing
Across NAND, HBM4 DRAM, and logic chiplets, the analyst believes the total addressable market for hybrid bonding licensing could exceed US$200 million by 2030, and that Adeia can surpass US$100 million in semiconductor sales even without the contribution of DRAM renewals.
Recurring semiconductor licensing revenue is modeled to grow from approximately US$24 million in 2025 to US$78 million in 2027, with further acceleration anticipated in 2028 as DRAM renewals are consummated.
RapidCool: Direct-to-Chip Cooling
Adeia's RapidCool DTC liquid cooling technology reduces thermal resistance by more than 70% through specialized silicon cold plates bonded directly to chips, enabling 2–3x current power densities within existing infrastructure — a key differentiator versus immersion cooling solutions that require full architectural replacements.
Given that cooling represents approximately 40% of data center power consumption, commercialization potential is seen as meaningful. Early trials have been encouraging, and the company targets commercial availability in as little as three years (2028+). Importantly, RapidCool is not currently reflected in the analyst's financial estimates, representing potential upside to the model.
Financial Estimates and Valuation
Searle models fiscal 2026 revenue of US$416.1 million, adjusted EBITDA of US$234.9 million, and non-GAAP EPS of US$1.39, followed by fiscal 2027 revenue of US$450.4 million, adjusted EBITDA of US$272.5 million, and non-GAAP EPS of US$1.69.
Despite more than doubling since mid-December 2025, ADEA trades at approximately 17x calendar 2027 estimated EPS and 7x+ EV/2027E sales — a discount of more than 30% to peers in the IP/licensing group. The analyst sees a "very reasonable path" to US$3.00 or more in adjusted non-GAAP EPS by 2030 and views the shares as meaningfully undervalued relative to the long-term opportunity.
Risks
Key risks cited include the global macroeconomic environment, uncertainty around OTT licensing progress Netflix Inc. (NFLX:NASDAQ) and Walt Disney Co. (DIS:NYSE) remain unlicensed, with litigation filed against Disney in November 2024), the pace of hybrid bonding adoption, execution risk around DRAM renewal negotiations, and the company's remaining debt load of approximately US$450 million — though Adeia's annualized free cash flow of more than US$150 million is expected to support a leverage target of 2x adjusted EBITDA within 12–18 months.
The analyst maintains a Buy rating and US$34.00 price target, equivalent to approximately 20x calendar 2027 estimated adjusted non-GAAP EPS.
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Disclosures for Roth Capital Partners, Adeia Inc., April 14, 2026
Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report. For important disclosure information regarding the companies in this summary report, please contact the Director of Research at (800) 678-9147 or write to: ROTH Capital Partners, LLC, Attention: Director of Research, 888 San Clemente Drive, Newport Beach, CA 92660 Disclosures: Within the last twelve months, ROTH Capital Partners, or an affiliate to ROTH Capital Partners, has received compensation for investment banking services from Adeia Inc. and CEVA Inc.. A household member of the research analyst principally responsible for the preparation of research reports on Amazon.com, Inc. is an employee of Amazon.com, Inc. in a non-officer, non-director, and non-advisory board member position. An Associated Person owns debt or equity securities of Meta Platforms, Inc.. A Research Analyst and/or a member of the Analyst's household own(s) debt or equity securities of Adeia Inc. and Amazon.com, Inc.. Within the last twelve months, ROTH Capital Partners, or an affiliate to ROTH Capital Partners, has managed or co-managed a public offering for CEVA Inc.. Distribution of IB Services Firmwide IB Serv./Past 12 Mos. as of April 13, 2026 Rating Count Percent Count Percent Buy [B] 390 76.47 114 29.23 Neutral [N] 90 17.65 7 7.78 Sell [S] 3 0.59 1 33.33 Under Review [UR] 27 5.29 6 22.22 Our rating system attempts to incorporate industry, company and/or overall market risk and volatility. Consequently, at any given point in time, our investment rating on a stock and its implied price movement may not correspond to the stated 12-month price target. Ratings System Definitions - ROTH Capital employs a rating system based on the following: Buy: A rating, which at the time it is instituted and or reiterated, that indicates an expectation of a total return of at least 10% over the next 12 months. Neutral: A rating, which at the time it is instituted and or reiterated, that indicates an expectation of a total return between negative 10% and 10% over the next 12 months. Sell: A rating, which at the time it is instituted and or reiterated, that indicates an expectation that the price will depreciate by more than 10% over the next 12 months. Under Review [UR]: A rating, which at the time it is instituted and or reiterated, indicates the temporary removal of the prior rating, price target and estimates for the security. Prior rating, price target and estimates should no longer be relied upon for UR-rated securities. Not Covered [NC]: ROTH Capital does not publish research or have an opinion about this security. ROTH Capital Partners, LLC and its affiliates expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months. The material, information and facts discussed in this report other than the information regarding ROTH Capital Partners, LLC and its affiliates, are from sources believed to be reliable, but are in no way guaranteed to be complete or accurate. This report should not be used as a complete analysis of the company, industry or security discussed in the report. Additional information is available upon request. This is not, however, an offer or solicitation of the securities discussed. Any opinions or estimates in this report are subject to change without notice. An investment in the stock may involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Additionally, an investment in the stock may involve a high degree of risk and may not be suitable for all investors. No part of this report may be reproduced in any form without the express written permission of ROTH. Copyright 2026. Member: FINRA/SIPC.
