Alchip Technologies Ltd. warned of a challenging year ahead as weakening demand from a major US chipmaker and delays in advanced driver-assistance systems are expected to drive annual revenue down by as much as 20%.
The Taiwan-based chip design service provider, which reported record profits for 2023, now faces significant headwinds in 2024, according to CEO James Shen. The company had initially anticipated growth driven by a US integrated device manufacturer and ADAS customers, but those expectations have been tempered.
“The momentum from the US IDM client has fallen short of expectations, while ADAS chip customers have delayed their products by two to three months,” Shen said during an earnings call.
Alchip reported fourth-quarter net income of NT$1.84 billion (US$57.5 million), a 64% increase from the same period a year earlier and a 2.4% rise from the previous quarter. Revenue for the quarter reached NT$13.07 billion (US$408.4 million), up 41.7% year-on-year despite declining 11.8% from the third quarter.
For the full year 2023, Alchip posted NT$51.97 billion (US$1.62 billion) in revenue, a 70.5% jump from 2022, while net profit surged 93.8% to NT$6.45 billion (US$201.6 million). This translated to earnings per share of NT$81.34.
Despite projecting a 10-20% revenue decline for 2024, Shen indicated that high-margin non-recurring engineering contracts could help maintain profitability at reasonable levels.
