Artificial intelligence (AI) chip designer Alchip Technologies Ltd (世芯) yesterday forecast that revenue would grow significantly again this year, thanks to stronger-than-expected demand from its top customer and new orders from its second-largest customer.
The Taipei-based company saw revenue more than double to US$978.39 million last year, compared with US$460.5 million in 2022, largely due to its biggest customer.
Net profit soared 73.3 percent year-on-year to US$106.58 million last year, from US$61.51 million in the prior year.
Photo: Screen grab from the Alchip Technologies Ltd Web site
Alchip, which yesterday closed at NT$4,340 — the highest on the local stock market — said that the outlook for next year is promising, based on customers’ indications.
“Demand for mass production [of chips] for high performance computing [HPC] and artificial-intelligence applications remains robust. Purchase orders from our largest customer has continued to increase,” Alchip CEO Johnny Shen (沈翔霖) told investors on Zoom.
“We are confident that the company’s business is in an excellent stage. We anticipate very strong growth for this year: 2024 will be another outstanding and record-breaking year for Alchip,” he said.
Production volume growth of AI chips for Amazon Web Services would be significant, increasing by at least 30 percent this year, Shen said.
Three months ago, Alchip expected shipments of the chip to be flat or to grow only slightly.
Additionally, the growth of chip shipments, mostly 7 nanometers and 5 nanometers, for its second-largest customer — likely Intel Corp, sources say — would be heavily dependent on the allocation of advanced chip-on-wafer-on-substrate, or CoWoS, packaging capacity from Taiwan Semiconductor Manufacturing Co (台積電), Shen said.
The more capacity it secures, the greater Alchip’s revenue upside would be, he said.
“There is a good chance that Alchip would register another strong year next year, as its second-largest customer has expressed confidence in its [Alchip’s] 5-nanometer chip design and indicated that it would continue ordering it next year,” Alchip said.
Potential changes in the competitive landscape was also a hot topic in yesterday’s call with investors, following Nvidia Corp’s announcement that it is seeking to build an ASIC unit.
“If Nvidia starts to do ASICs, it would compete with its customers who are using its standard [AI] chips. I don’t think that is the right thing to do for Nvidia,” Shen said.
Shen said he does not see why Nvidia would sacrifice higher-margin standard AI chips over ASICs.
The world’s major cloud service providers, Amazon.com and Microsoft Corp, are developing their own AI chips through ASIC companies like Alchip to reduce their dependence on Nvidia, so it makes no sense that they would seek Nvidia for ASIC supply.
“Alchip never fears competition,” Shen said.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
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