Alchip Technologies (3661) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was NT$10,484.9 million (US$318.7 million), down 21.1% quarter-on-quarter and nearly flat year-over-year, mainly due to reduced 7nm AI chip shipments and seasonality in NRE projects.

• Gross margin improved to 23.2% in Q1 2025 from 18.8% in Q1 2024, driven by favorable NRE mix and advanced node projects.

• Net income reached NT$1,463.5 million (US$44.5 million), up 19% year-over-year, with EPS of NT$18.13 (US$0.55) basic.

• The first 3nm AI accelerator project was taped out, with mass production expected in early 2026.

• High performance computing accounted for over 94% of Q1 2025 revenue, with strong NRE demand in North America.

Financial highlights

• Q1 2025 revenue: NT$10,484.9 million (US$318.7 million), down 21.1% QoQ and 4.4% YoY.

• Operating income: NT$1,494.5 million (US$45.4 million), up 17.9% YoY, down 16.3% QoQ.

• Gross profit: NT$2,428.7 million (US$73.8 million), up 17.8% YoY.

• EPS: NT$18.13 (US$0.55), up from NT$15.83 (US$0.50) in Q1 2024.

• Cash and cash equivalents: NT$38,262.9 million (US$1,152.3 million) as of March 31, 2025.

Outlook and guidance

• Annual revenue forecast remains consistent with previous guidance, with flat revenue expected next quarter but improving profit margin.

• Strong NRE revenue growth projected for 2025, driven by multiple 3nm and 2nm projects.

• Mass production of 3nm AI accelerator anticipated to start in early 2026.

• Revenue to remain quiet for the rest of the year due to limited 7nm AI accelerator contribution.

• Management expects ongoing volatility in semiconductor product life cycles and inventory impairment risk.