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.
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