Alchip Technologies Ltd (世芯), an application-specific integrated circuit (ASIC) designer specializing in artificial intelligence (AI) chips, said it is highly confident that revenue would grow 30 percent annually next year, although a key customer’s demand for existing chips are to falter due to a product transition.
The stock price of Alchip has plummeted more than 35 percent to NT$3,120 yesterday, a few months after seeing the peak of NT$4,430 in February.
Investors had turned bearish in fear that Alchip might lose growth momentum, as its biggest customer, Amazon.com Inc, would adopt a new chip next year or maybe even give up using ASICs completely.
Photo: Vanessa Cho, Taipei Times
The stock price decline was, to some extent, buoyed by Amazon.com’s NT$535 million (US$16.5 million) equity investment in Alchip via a share subscription last month.
“I have set a minimal growth target of 30 percent year-over-year each year,” Alchip CEO Johnny Shen (沈翔霖) told reporters on Thursday on the sidelines of the company’s annual shareholders’ meeting in Taipei.
“I am confident we can reach that [growth] figure next year…. We are striving to sustain existing customer accounts and to win new orders at the same time,” he said.
Shen said the company would regain strong revenue growth in 2026, after customers start adopting its new 3-nanometer and 2-nanometer AI chips.
Alchip last month said that the world’s major cloud service providers would continue developing their AI chips through ASIC service providers, given lower costs compared with Nvidia Corp’s AI chips.
Alchip would be a major beneficiary from the AI trend, given its engineering capabilities and its experience in bringing chips to mass production, the company told investors at the time.
Additionally, the technology barrier is getting higher, meaning fewer competitors are capable of developing chips using advanced 3-nanometer and 2-nanometer process technologies, Shen said.
Nvidia is reportedly considering tapping into the ASIC market, while smartphone chip designer MediaTek Inc (聯發科) has been trying to break into the ASIC market over the past few years by leveraging its intellectual property portfolios.
As tight supply of advanced chip-on-wafer-on-substrate (CoWoS) technology from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) causes a bottleneck in the shipping of AI chips, securing as much CoWoS capacity as possible has been Alchip’s priority, it said.
The progress “is getting better,” as TSMC has doubled CoWoS capacity this year, Shen said.
Alchip shareholders on Thursday approved a new share offering plan via a private placement. The company plans to issue 1 million common shares at most to introduce new strategic partners and fund its operations.
To support its growth, Alchip is expanding its workforce primarily outside of China, as customers are trying to avert risk from geopolitical tensions.
Vietnam is likely to become a large overseas site, given that the company plans to recruit 50 to 100 engineers in the nation over the next two years. Alchip is also expanding its headcount in Taiwan, Japan and Malaysia.
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