Alchip Technologies Ltd (世芯), an application-specific integrated circuit (ASIC) designer specializing in artificial intelligence (AI) chips, yesterday said revenue would pick up significantly next year after a major customer’s 3-nanometer chip enters volume production.
Revenue has been dipping for the past four quarters as a key customer’s 5-nanometer AI accelerator is approaching the end of its lifecycle. Revenue in the third quarter sank 51.5 percent annually, or down 25 percent sequentially, to US$223 million.
The company attributed the decline to lower revenue contribution from 5-nanometer and 3-nanometer chips due to capacity shortage. Alchip counts Amazon.com Inc and Intel Corp among its customers.
Photo: Screengrab from the Alchip Technologies Web site
“We anticipate a further revenue decline this quarter,” Alchip chairman and chief executive officer Johnny Shen (沈翔霖) told an online earnings conference.
“Looking ahead, we remain highly optimistic about the AI market. From 2026 to 2029, we expect our growth to stay in line with the industry and ahead of competitors,” Shen said.
Alchip generated 79 percent of its revenue by supplying ASICs used in high-performance computing devices, such as AI servers, in the third quarter.
Revenue is likely to jump next year as a 3-nanometer chip ramps up production in the second quarter for a North American customer, Alchip chief financial officer Daniel Wang (王德善) said.
The customer has placed a large order for 3-nanometer chips from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and tried to squeeze more capacity from TSMC amid supply constraints, Wang said.
“This 3-nanometer chip revenue definitely could be a multiple-billion [dollar] business for us as a whole,” he said.
The company expects a new automotive chip, set to enter volume production later this quarter, to drive its growth next year, it said.
Alchip expects the gross margin this quarter to climb from 28 percent last quarter, thanks to growth in non-recurring engineering (NRE) income, Shen said.
NRE refers to one-time charges for chip designing and test services.
Alchip has booked NRE income from a 2-nanometer chip design project earlier this quarter and expected more to come later this quarter, it said.
The growth in NRE income would help boost this quarter’s earnings to the strongest of this year, as NRE business delivers higher gross margin than chip production business, Shen said.
Net income expanded 3.1 percent last quarter to US$44.26 million from US$42.94 million in the second quarter, ending two quarters in decline. On an annual basis, net income shrank 20.32 percent from US$55.55 million.
Earnings per share improved to NT$16.4 from NT$16.37 in the second quarter. That represents a decline from NT$22.46 a year ago.
Elon Musk’s lieutenants have reached out to chip industry suppliers, including Applied Materials Inc, Tokyo Electron Ltd and Lam Research Corp, for his envisioned Terafab, early steps in an audacious and likely arduous attempt to break into the production of cutting-edge chips. Staff working for the joint venture between Tesla Inc and Space Exploration Technologies Corp (SpaceX) have sought price quotes and delivery times for an array of chipmaking gear, people familiar with the matter said. In past weeks, they’ve contacted makers of photomasks, substrates, etchers, depositors, cleaning devices, testers and other tools, according to the people, who asked not to
Taichung reported the steepest fall in completed home prices among the six special municipalities in the first quarter of this year, data compiled by Taiwan Realty Co (台灣房屋) showed yesterday. From January through last month, the average transaction price for completed homes in Taichung fell 8 percent from a year earlier to NT$299,000 (US$9,483) per ping (3.3m²), said Taiwan Realty, which compiled the data based on the government’s price registration platform. The decline could be attributed to many home buyers choosing relatively affordable used homes to live in themselves, instead of newly built homes in the city’s prime property market, Taiwan Realty
The government yesterday approved applications by Alphabet Inc’s Google to invest NT$27.08 billion (US$859.98 million) in Taiwan, the Ministry of Economic Affairs said in a statement. The Department of Investment Review approved two investments proposed by Google, with much of the funds to be used for data processing and electronic information supply services, as well as inventory procurement businesses in the semiconductor field, the ministry said. It marks the second consecutive year that Google has applied to increase its investment in Taiwan. Google plans to infuse NT$25.34 billion into Charter Investments Ltd (特許投資顧問) through its Singapore-based subsidiary Fructan Holdings Singapore Pte Ltd, and
JET JUICE: The war on Iran’s secondary effects have seen fuel prices skyrocket, knocking flight schedules down to earth in return as airlines struggle with costs Airline passengers should brace for more irritation in the next few months as carriers worldwide cancel flights and ground planes to cope with stratospheric increases in jet-fuel prices. Dutch flag carrier KLM is the latest company to cut its schedule, saying on Thursday that it would scrap 80 return flights at Amsterdam’s Schiphol Airport in the coming month. That puts it in the same league as United Airlines Holdings Inc, Deutsche Lufthansa AG and Cathay Pacific Airways Ltd, which have all pruned itineraries to mitigate costs. Global capacity for next month has been reduced by about 3 percentage points, with all
RSS