Alchip Technologies (3661) Q2 2025 earnings summary

Executive summary

• Q2 revenue was $297.4 million, down 6.7% quarter-on-quarter and 29.4% year-on-year, mainly due to the end of 7nm AI chip shipments and a delayed N3/3nm tape-out milestone.

• Net income for Q2 was $42.9 million, a 3.3% quarter-on-quarter and 12.8% year-on-year decline, with profit supported by expense control and higher non-operating income.

• Gross margin decreased in Q2 due to lower-than-expected NRE revenue and the 3nm tape-out delay, but confidence remains for a notable year-over-year increase.

• Significant progress was made on key accounts, with top-down design proven and on track for volume production in Q1 next year.

• ADAS chip prototyping completed successfully, with substantial orders placed and expected to be a top-three revenue generator from next year.

Financial highlights

• Q2 revenue: $297.4 million, down from $318.7 million in Q1 and $421.3 million in Q2 last year.

• Gross profit: $61.6 million, down 16.5% sequentially and 22.8% year-over-year.

• Operating income: $37.6 million, down 17.3% quarter-on-quarter and 26.6% year-on-year.

• Net income: $42.9 million, down 3.3% quarter-on-quarter and 12.8% year-on-year.

• EPS for Q2 was NTD 16.4, impacted by FX changes and a strong NT dollar.

Outlook and guidance

• Revenue expected to remain relatively flat quarter-over-quarter through year-end, with gross margin improvement anticipated.

• NRE revenue projected to post meaningful growth in the second half, driven by 3nm and 2nm projects.

• 3nm AI-related production revenue expected to begin in late Q1 next year, with no delay in mass production schedule.

• Management expects continued volatility in the semiconductor industry due to rapid technology changes and regulatory uncertainties.

• Ongoing capital expenditures and R&D investments are planned to support future growth.