Faraday Technology, a leading provider of ASIC design services and silicon intellectual property (IP) research and development, reported its second-quarter financial results for 2024, showing consolidated revenue of NT$2.65 billion. This marks a 3% increase from the previous quarter, though it reflects a 9% decrease year-on-year. The company’s gross profit margin improved to 47.1%, with a net profit of NT$260 million and basic earnings per share of 1 yuan.
All three major product categories showed quarterly growth. IP revenue reached NT$350 million, a 5% quarterly increase and a 1% annual increase. Commissioned design services (NRE) achieved NT$650 million, marking a 3% quarterly increase and a significant 32% annual rise, setting a new single-quarter record. Mass production (MP) revenue was NT$1.66 billion, up 2% quarterly but down 21% year-on-year.
Faraday highlighted that ASIC customer inventory adjustments are nearing completion, which should boost momentum. Increased demand for MCUs also contributed to the growth in mass production revenue. Despite a rise in operating expenses by 12% quarter-on-quarter, gross profit margin increased by 0.6 percentage points to 47.1%, though the operating profit margin dropped by 9.7%.
Looking forward, Faraday anticipates a peak quarterly revenue increase of up to 10% in the third quarter. IP and NRE revenues are expected to set new single-quarter highs, while gross profit margins may see a slight reduction.
The company has completed several strategic initiatives in the first half of the year, including mergers and acquisitions, cash capital increases, and strategic investments, positioning itself for long-term growth. Significant progress in advanced processes and partnerships has been made, securing advanced process ASIC projects from several international customers.
Faraday’s future growth will be propelled by its focus on advanced processes and advanced packaging. The company aims to extend its value chain by offering comprehensive SoC design, advanced packaging, and design support services. Its unique vertical division of labor model in advanced packaging provides customers with integrated, one-stop solutions, emphasizing the importance of strategic material control. This strategy is expected to enhance design value and amplify the revenue contribution from advanced packaging while increasing opportunities in advanced manufacturing processes.
