Alchip Technologies (3661) investor relations material

Executive summary

• Q1 2026 revenue was TWD 132.4 million (or $132.4M), down 13.3% quarter-on-quarter and 58.5% year-on-year, mainly due to a postponed tape-out milestone.

• Gross margin exceeded 50%, driven by strong NRE demand, favorable revenue mix, and higher production margin despite lower production revenue.

• Net income for Q1 2026 was TWD 45.1 million (or $45.1M), down 5.7% quarter-on-quarter but up 1.6% year-on-year, reflecting robust NRE revenue growth.

• Automotive business entered volume production, expected to ramp in Q2 and become a top revenue contributor in H1.

• Majority of design resources now located outside China, with aggressive hiring in Japan, Malaysia, and Vietnam to mitigate geopolitical risks.

Financial highlights

• Q1 2026 revenue: TWD 132.4 million (or $132.4M), down from TWD 152.7 million (or $152.7M) in Q4 2025 and TWD 319.1 million (or $319.1M) in Q1 2025.

• Operating income for Q1 was TWD 43.2 million, up 10.5% quarter-on-quarter but down 4.8% year-on-year.

• Gross profit increased 3.2% quarter-on-quarter to $66.4M, but down 10% year-on-year.

• HPC accounted for 70% of total revenue in Q1, with expectations for this share to rise.

• Advanced process nodes (N3, N2, N5, N7) contributed over 80% of total revenue.

Outlook and guidance

• Q2 revenue expected to be higher than Q1, with significant ramps in Q3 and Q4, driven by N3 AI accelerator shipments to North America.

• Revenue momentum anticipated to continue into late next year, with mass production of next-gen chips and N2 accelerator project tape-out by year-end.

• Gross margin expected to trend down as production revenue increases, but NRE pipeline remains strong, especially in North America.

• Growth momentum expected to align with industry leaders through 2029.