M31's EPS Soared 24.7% in H1, showing sequential growth

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Aug. 28, 2023 – 

Hsinchu, Taiwan -- August 28, 2023 -- M31 Technology Corporation (M31), a leading global supplier of silicon intellectual property (IP), at today’s earning conference (8/16/2023), announced that the revenue of NT$347 million for the Q2 of 2023, which represents a 16% increase compared to the same period last year, and the cumulative revenue for the first half of this year has reached NT$661 million, an increase of 20.7% annually. Despite the adjusted retroactive Capital increased by earning shares, EPS still reached NT$4.89, representing an increase of 24.7% YoY compared to the same period last year. M31's revenue continued to grow against the trend, while maintaining a gross profit margin of 100%, the overall operational structure has been optimized. In the first half of the year, the Company achieved outstanding results with both operating and after-tax net profit margin attributable to the parent company exhibiting a double-digit increase. In the second quarter of this year, as well as in the first half overall, both revenue and profits have simultaneously set new historical highs for the same period.

Looking back at the first half of the year, despite the QoQ decline in royalties in the second quarter due to the overall decline in foundry capacity utilization; however, with a certain foundation in the scale of mass production, as the number of customers entering mass production continues to expand, the amount of Royalty's revenue in the first half of this year compared to the same period in 2022, still grew strongly by more than 70%. In terms of advanced process development, U.S. chip designers are particularly keen on licensing below 7nm IP, and it is expected that below 5nm processes will be introduced into the design of automated driving, data centers, high-end mobile phones, and consumer electronics related applications in the second half of the year. Currently, the collaboration with foundries has extended to technology platforms utilizing FinFET processes 16nm and below. In the future, as the number of tape-out and order releasing from advanced process customers increase each quarter, this will bring M31 a sustainable contribution to revenue. As the widely-applicable and cost-effective mature processes face a decline in the order boom brought by the pandemic, major foundries are actively enhancing special processes tailored for specific applications. In the second half of the year, M31 will continue to cooperate with foundry partners on new mature process platforms, and this year's revenue contribution from foundry customers is expected to surpass that of fabless chip designers.

Looking ahead to the second half of the year, the CEO, Scott, said that the Company is planning to expand the R&D team globally in response to the strong long-term demand for advanced processes from foundry customers. Currently, the Company has already been established a subsidiary in India, and will cautiously expand in the future under the premise of prudent consideration of the revenue situation and operating expenses. Regarding the recent hot topic about AI, we have noticed that not only advanced processes, but also in mature processes such as 22nm, are starting to introduce AI-related applications. We believe that AI applications will become even more widespread in the future, simultaneously driving the demand for high-speed interface IPs capable of supporting massive data transmission, as well as other related IP solutions like edge computing. In the automotive electronics sector, where semiconductor content has shown strong long-term growth, major automotive chip manufacturers from regions including Europe, America, Japan, Korea, and even China have been incorporating M31 IPs into their tape-out, which has made M31 more visible in the field of automotive IP. In the second half of the year, the IP for processes below 7nm is expected to be introduced into automotive electronics-related application platforms. Despite the ongoing downturn in the semiconductor market, achieving a 20% year-on-year revenue growth target this year presents significant challenges, M31 will strategically position itself within emerging technology trends. As collaboration with foundries progresses from mature to advanced processes, the Company anticipates stronger growth momentum in the second half of the year, with revenue expected to increase each quarter. With full commitment to this year's operational objectives, the Company is confident that annual revenue is poised to achieve a double-digit percentage increase, believing that will set a new all-time record.

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