Alchip Technologies (3661) Q2 2025 earnings summary

Executive summary

• Q2 revenue was $297.4 million (NT$9.14 billion), down 6.7% quarter-on-quarter and 33% year-over-year, mainly due to the end of 7nm AI chip shipments and a delayed 3nm tape-out milestone.

• Net income for Q2 was $42.9 million (NT$1.32 billion), a 3.3% quarter-on-quarter and 17% year-over-year decline, with profit supported by expense control and higher non-operating income.

• Gross margin for Q2 was 20–25%, lower than expected due to NRE revenue slip and delayed 3nm tape-out, but improved year-over-year.

• Significant progress was made on key accounts, with ADAS chip prototyping completed and expected to be a top-three revenue generator from next year.

• Open ecosystem strategy expanded, with new partners and strategic alliances, including collaborations with NVIDIA, Astera Labs, and Synopsys.

Financial highlights

• Q2 revenue: $297.4 million (NT$9.14 billion), down 6.7% quarter-on-quarter and 33% year-over-year.

• Operating income: $37.6 million (NT$1.15 billion), down 17.3% quarter-on-quarter and 30% year-over-year.

• Net income: $42.9 million (NT$1.32 billion), down 3.3% quarter-on-quarter and 17% year-over-year.

• EPS: NT$16.4 (diluted EPS NT$16.02), down from NT$18.1 in Q1 and NT$19.38 last year.

• Cash and cash equivalents at June 30, 2024: NT$31.05 billion, up from NT$23.25 billion a year ago.

Outlook and guidance

• Revenue expected to remain relatively flat through year-end, with gross margin improvement anticipated as NRE revenue grows in the second half.

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

• Management continues to monitor industry cycles and expects ongoing volatility in demand.

• Long-term outlook is strong, with growth expected to align with or outperform industry peers, especially in AI and HPC.