TAIPEI (Taiwan News) — Taiwanese chip designer Alchip Technologies Ltd. is gradually recovering from a product transition period, with June revenue returning to year-on-year growth and reaching the highest monthly level so far this year.
Alchip reported consolidated revenue of NT$3.57 billion (US$111 million) in June. The figure was up 84.6% from May and 15.39% from the same period last year, according to CTEE and MoneyDJ.
For the first half of the year, consolidated revenue totaled NT$11.83 billion, down 39.74% year-on-year. The decline was mainly due to a transition from older products to new 3-nanometer AI chips in the first quarter.
Some projects also experienced delays in the tape-out stage, when chip designs are finalized before entering manufacturing. This reduced revenue from mass production.
Institutional investors said Alchip’s main growth driver this year is expected to come from an application-specific integrated circuit (ASIC) developed for a major North American cloud service provider. The chip, which is designed for a specific computing application rather than general-purpose use, entered mass production near the end of the second quarter, according to Business Next.
Revenue from ASIC mass production is typically much higher than revenue generated during the initial chip design stage. As shipments of the new chip increase, revenue from wafer production, advanced packaging, and related manufacturing services is expected to contribute to Alchip’s revenue growth.
The same North American cloud service provider has also selected Alchip as its main partner for a next-generation AI ASIC project, according to analysts. Design work has already started, with supply chain sources saying the chip will be built using a 2-nm process.
The project is expected to complete tape-out in the fourth quarter. Initial mass production is scheduled for the fourth quarter of 2027.
Beyond its North American cloud service provider projects, Alchip’s advanced driver assistance system chips (ADAS) entered mass production in the fourth quarter of last year and began making a meaningful contribution to revenue in the first quarter of this year.
Analysts expect automotive products to become Alchip’s second-largest revenue source starting this year. Additionally, the company’s next-generation automotive chip is expected to enter mass production in the third quarter of 2027.
Analysts noted that Alchip remains highly dependent on a limited number of customers and projects. However, with June revenue returning to growth, they believe the company has entered a new product production cycle, with business momentum expected to improve in the second half of the year.
They added that market attention will focus on the production ramp-up of Alchip’s North American project, progress on its ASIC design project, and shipments of its ADAS products in the coming months.
To reduce their reliance on Nvidia, major cloud service providers, including Google, Amazon Web Services, Microsoft, and Meta, have been investing in the development of their own chips. These companies have turned to design service providers to help create ASICs, with Broadcom among the leading providers in the field.
In Taiwan, Alchip and Global Unichip Corp. are among the companies specializing in ASIC development. MediaTek, which has also been developing ASIC solutions, expects the global ASIC market to reach NT$1.45 trillion by 2028.
