Application specific integrated circuit (ASIC) designer Faraday Technology Corp (智原) yesterday raised its projected revenue contribution from artificial intelligence (AI) related business to a high single digit this year, driven by robust demand for advanced 2.5D packaging technology, and expects growth to further pick up next year with more AI chips entering mass production.
“AI products are the major driving force this year in terms of NRE [non-recurring engineering] and MP [mass production],” Faraday president Steve Wang (王國雍) told investors during a virtual conference.
Faraday, which mainly offers advanced packaging design services for AI chips, secured its first AI project at the end of last year, the company said.
Photo: Grace Hung, Taipei Times
The firm designs the interposer — a key structure providing electrical connection between chips and components inside the 2.5D packaging.
Foundry service provider United Microelectronics Corp (聯電) produces this interposer before handing it over to chip packagers.
Faraday is leveraging its partnership with Arm Holdings Ltd to expand into AI. The firm last year became the only ASIC company picked by Arm to become a partner for its Neoverse subsystems.
Faraday expects revenue this year to return to the growth track, after sliding 8.42 percent last year as customers grappled with a prolonged inventory correction cycle, Wang said.
A spike in NRE revenue would help cover the weakness in MP revenue, which would drop by about 20 percent this year, Wang said.
NRE revenue would at least double this year, after climbing 1.6 percent annually to a record-high of NT$627 million (US$19.24 million) in the first three months of the year, he said.
ASIC companies usually generate revenue from collecting NRE, the one-time cost to research, design, develop and test a new product or product enhancement, intellectual property (IP) license, or royalty and revenue after the chips they designed enters mass production.
Faraday’s growth would also be fueled by expanding its business to advanced chips made on 5-nanometer, 4-nanometer or 2-nanometer technology through its collaborations with foundry partners Samsung Electronics Co and Intel Corp.
The company expects consolidated revenue to grow by a low-single-digit percentage this quarter compared with NT$2.58 billion last quarter, led by NRE revenue, which would grow by a double-digit percentage, while IP revenue would increase by a single-digit percentage.
MP revenue would shrink by a low-single-digit quarterly due to inventory digestion, it said.
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