Alchip Technologies (3661) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 revenue of NT$14.83 billion (TWD 460 million/$459.7M), net income of NT$1.79 billion (TWD 55.6 million/$55.6M), and EPS of NT$22.46, all historical highs, driven by strong AI and HPC demand and ramp-up of 5nm AI accelerators for North American customers.

• 91.1%–95% year-on-year and 9.2% quarter-on-quarter revenue growth; over 90% of revenue from HPC/AI applications.

• Aggressive hiring and expansion outside China, especially in Japan, Malaysia, and Southeast Asia.

• Company operates primarily in ASIC and SoC design and manufacturing, with high exposure to high-performance computing.

• Gross margin improved to 19.5%–20% in Q3, attributed to higher NRE revenue and favorable production mix.

Financial highlights

• Q3 revenue: NT$14.83 billion (TWD 459.7 million/$459.7M), up 9.2% QoQ and 91.1%–95% YoY.

• Q3 net income: NT$1.79 billion (TWD 55.6 million/$55.6M), up 12.8% QoQ and 97.7%–102% YoY.

• Q3 EPS: NT$22.46 basic, NT$21.99 diluted.

• Gross margin for Q3: 19.5%–20%; operating margin: 13%.

• Cash and equivalents at period end: NT$19.72 billion, up from NT$6.00 billion a year ago.

Outlook and guidance

• Q4 revenue expected to decline by high single digits QoQ, mainly due to lower 7nm AI ASIC shipments, partially offset by ramping 5nm AI accelerator shipments.

• NRE revenue projected to be strong in Q4, with gross margin expected to exceed 20%.

• 2025 outlook stable in H1, with strong NRE pipeline and 5nm AI chip as main revenue driver; 2026 expected to see significant production ramp and new project wins.

• Management expects continued strong demand in high-performance computing and advanced process nodes.

• Ongoing investments in R&D and capacity expansion to support future growth.