Artificial intelligence (AI) chip designer Alchip Technologies Ltd (世芯) yesterday said that revenue and net profit this quarter would surpass a record-high performance in the second quarter, thanks to increasingly stable supply of advanced chip-on-wafer-on-substrate (CoWoS) packaging capacity and new orders.
The Taipei-based company gave a bullish view about next year’s revenue growth momentum, benefiting from a growing trend that cloud service providers intend to make their own AI chips to provide differentiated services.
The company said its confidence is built on strong demand as multiple North-America-based customers are to see their new AI chips entering volume production from next year, chief executive officer Johnny Shen (沈翔霖) told investors yesterday.
Photo: screen grab from the Alchip Technologies Ltd Web site
One of the customers is set to ship AI training chips made on 7-nanometer and 5-nanometer process technologies from this quarter through next year, Shen said.
“Customers’ demand for high-performance-computing [HPC] and AI applications remains robust,” Shen said. “Demand at our largest customer is increasing. Its business forecast for next year significantly surpasses this year’s figures.”
Alchip also saw orders from other customers “drastically increase,” Shen said.
“We anticipate substantial revenue growth for the next three to four quarters,” he said.
Alchip counts Amazon.com Inc and Intel Corp among its AI chip customers. Chips used in HPC, notably servers, accounted for 85 percent of the company’s revenue last quarter, up from 81 percent in the second quarter.
The firm is also making “steady progress” in boosting CoWoS packaging capacity allocations at Taiwan Semiconductor Manufacturing Co (台積電), Shen said.
“We expect smoother production of CoWoS-related products starting in the second half of this quarter,” Shen said.
Supply of CoWoS capacity is a deciding factor in the company’s revenue momentum, Alchip chief financial officer Daniel Wang (王德善) told investors.
Supply constraints of CoWoS packaging capacity was blamed for a sequential decline of 7 percent of revenue in the third quarter.
To cope with the better-than-expected demand, Alchip plans to raise US$350 million by issuing global depositary receipts (GDRs) to finance the expansion of its production lines.
The company plans to issue as many as 40 million new shares in the form of GDRs, about 5 percent of the company’s total share capital.
Addressing investors’ concern about the impact of the US’ curbs on chip exports to China, Shen said the impact would be very minimal, as the affected chips only make up a 1 or 2 percent of the company’s total revenue.
This year revenue from China would drop to less than 15 percent of total revenue, Shen said.
Alchip yesterday reported a net profit of NT$28.09 billion (US$868 million) for the third quarter, a 93 percent year-on-year increase, thanks to robust demand for chips used in servers.
On a quarterly basis, net profit expanded 17.4 percent.
Gross margin improved to 23.75 percent last quarter from 21.34 percent in the second quarter, but fell from 31.7 percent in the third quarter last year.
Taiwan’s foreign exchange reserves fell below the US$600 billion mark at the end of last month, with the central bank reporting a total of US$596.89 billion — a decline of US$8.6 billion from February — ending a three-month streak of increases. The central bank attributed the drop to a combination of factors such as outflows by foreign institutional investors, currency fluctuations and its own market interventions. “The large-scale outflows disrupted the balance of supply and demand in the foreign exchange market, prompting the central bank to intervene repeatedly by selling US dollars to stabilize the local currency,” Department of Foreign
ENERGY ISSUES: The TSIA urged the government to increase natural gas and helium reserves to reduce the impact of the Middle East war on semiconductor supply stability Chip testing and packaging service provider ASE Technology Holding Co (日月光投控) yesterday said it planned to invest more than NT$100 billion (US$3.15 billion) in building a new advanced chip testing facility in Kaohsiung to keep up with customer demand driven by the artificial intelligence (AI) boom. That would be included in the company’s capital expenditure budget next year, ASE said. There is also room to raise this year’s capital spending budget from a record-high US$7 billion estimated three months ago, it added. ASE would have six factories under construction this year, another record-breaking number, ASE chief operating officer Tien Wu
Intel Corp is joining Elon Musk’s long-shot effort to develop semiconductors for Tesla Inc, Space Exploration Technologies Corp and xAI, marking a surprising twist in the chipmaker’s comeback bid. Intel would help the Terafab project “refactor” the technology in a chip factory, the company said on Tuesday in a post on X, Musk’s social media platform. That is a stage in the development process that typically helps make chips more powerful or reliable. The chipmaker’s shares jumped 4.2 percent to US$52.91 in New York trading on Tuesday. The Terafab project is a grand plan by Musk to eventually manufacture his own chips for
For weeks now, the global tech industry has been waiting for a major artificial intelligence (AI) launch from DeepSeek (深度求索), seen as a benchmark for China’s progress in the fast-moving field. More than a year has passed since the start-up put Chinese AI on the map in early last year with a low-cost chatbot that performed at a similar level to US rivals. However, despite reports and rumors about its imminent release, DeepSeek’s next-generation “V4” model is nowhere in sight. Speculation is also swirling over the geopolitical implications of which computer chips were chosen to train and power the new
RSS