Artificial intelligence (AI) chip designer Alchip Technologies Ltd (世芯) yesterday said that revenue would grow significantly again in 2026 after adding a major AI chip customer, reversing moderation amid a product transition next year.
The Taipei-based application-specific IC (ASIC) designer reiterated its strong revenue growth forecast for this year and 2026 after its stock plummeted about 23 percent to NT$3,145 from a peak of NT$4,085 on March 6 amid growing competition.
Alchip said it has built strong partnerships with cloud service providers (CSP), denying that it had lost orders to smaller competitors such as Faraday Technology Corp (智原).
Photo: screen grab from the Alchip Technologies Ltd Web site
Faraday said it has secured its first order to design AI chips for customers.
“We are working on several test chips for potential customers and I have high confidence that we will win those projects,” Alchip chief executive officer Johnny Shen (沈翔霖) told investors during an online conference yesterday. “As leading-edge process technologies, such as 5-nanometer, 4-nanometer and 3-nanometer, become more complicated, there is only a handful of companies capable of providing designing services.”
“Only Marvell Technology Inc, Broadcom Inc and Alchip have the capabilities and track record to provide such services,” Shen said. “The ASIC market is enormous and Alchip cannot do it all on its own. Competition is always welcomed.”
The ASIC market is expected to increase to US$70 billion in the next four years, compared with US$4 billion last year, Shen said, citing an unspecified forecast.
CSP companies are aiming to reduce chip supply from expensive suppliers, such as Nvidia Corp, and trying to develop their own AI chips, Shen said.
Alchip will be one of the biggest beneficiaries of this trend, he said.
Alchip said it expects its new contract with an integrated device manufacturer would be a significant revenue stream next year and in 2026.
The new customer would utilize 5-nanometer technology to produce its AI chip, Alchip said.
Intel Corp is widely believed to be the customer.
Alchip said it has secured several projects to design AI-related chips using 4-nanometer and 3-nanometer process technologies.
The company said it is highly confident that this year would be “another record-breaking year” in terms of revenue, which would expand significantly, in line with an estimate it made in its previous earnings call in March.
To facilitate AI chip production, Alchip said its top priority this year is to get as much advanced packaging chip-on-wafer-on-substrate capacity from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) as possible, Shen said.
“We have delivered a message to TSMC to get capacity support for a specific customer,” he said. “So far so good — we received reasonable feedback.”
Alchip reported that net profit soared 104 percent to US$38.99 billion last quarter, compared with US$19.12 billion a year earlier.
On a quarterly basis, net profit rose 10 percent from US$35.44 billion.
First-quarter revenue grew 77 percent year-on-year to US$333.57 million and 14.6 percent quarter-on-quarter.
More than 94 percent of its revenue came from 7-nanometer chips or more advanced chips, up from 83 percent in the same period last year and 92 percent the previous quarter.
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