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.
A proposed 100 percent tariff on chip imports announced by US President Donald Trump could shift more of Taiwan’s semiconductor production overseas, a Taiwan Institute of Economic Research (TIER) researcher said yesterday. Trump’s tariff policy will accelerate the global semiconductor industry’s pace to establish roots in the US, leading to higher supply chain costs and ultimately raising prices of consumer electronics and creating uncertainty for future market demand, Arisa Liu (劉佩真) at the institute’s Taiwan Industry Economics Database said in a telephone interview. Trump’s move signals his intention to "restore the glory of the US semiconductor industry," Liu noted, saying that
On Ireland’s blustery western seaboard, researchers are gleefully flying giant kites — not for fun, but in the hope of generating renewable electricity and sparking a “revolution” in wind energy. “We use a kite to capture the wind and a generator at the bottom of it that captures the power,” said Padraic Doherty of Kitepower, the Dutch firm behind the venture. At its test site in operation since September 2023 near the small town of Bangor Erris, the team transports the vast 60-square-meter kite from a hangar across the lunar-like bogland to a generator. The kite is then attached by a
Foxconn Technology Co (鴻準精密), a metal casing supplier owned by Hon Hai Precision Industry Co (鴻海精密), yesterday announced plans to invest US$1 billion in the US over the next decade as part of its business transformation strategy. The Apple Inc supplier said in a statement that its board approved the investment on Thursday, as part of a transformation strategy focused on precision mold development, smart manufacturing, robotics and advanced automation. The strategy would have a strong emphasis on artificial intelligence (AI), the company added. The company said it aims to build a flexible, intelligent production ecosystem to boost competitiveness and sustainability. Foxconn
Leading Taiwanese bicycle brands Giant Manufacturing Co (巨大機械) and Merida Industry Co (美利達工業) on Sunday said that they have adopted measures to mitigate the impact of the tariff policies of US President Donald Trump’s administration. The US announced at the beginning of this month that it would impose a 20 percent tariff on imported goods made in Taiwan, effective on Thursday last week. The tariff would be added to other pre-existing most-favored-nation duties and industry-specific trade remedy levy, which would bring the overall tariff on Taiwan-made bicycles to between 25.5 percent and 31 percent. However, Giant did not seem too perturbed by the
RSS