Alchip Technologies (3661) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue reached $241.7 million, up 82.6% quarter-on-quarter but down 18.7% year-on-year.

• Net income was $51.8 million, with EPS of $20.01.

• Significant growth driven by the ramp-up of the N3 AI accelerator, which entered mass production and began shipping in May and June.

• Automotive ADAS program in China is now the second-largest revenue contributor, with stable shipments and next-generation project nearing tape-out.

• Two Arm-based CPU programs are in mass production, benefiting from global CPU shortages.

Financial highlights

• Operating income for Q2 was $52.1 million, up 20.5% quarter-on-quarter and 38.7% year-on-year.

• Gross margin declined from 50% in Q1 to the mid-30% range in Q2, with further declines expected as production revenue increases.

• Operating margin dropped from 33% in Q1 to 22% in Q2, but improved year-over-year.

• Gross profit for Q2 was $84.2 million, up 26.8% sequentially and 36.7% year-over-year.

• Revenue mix: 50% HPC, 16% networking, 32% consumer, 1% each from other markets.

Outlook and guidance

• Q3 and Q4 are expected to deliver record-high revenue and earnings, with sequential growth anticipated.

• Gross margin for the second half of the year is projected to be in the low to mid-20% range.

• Operating margin is targeted to be in the high teens as scale increases.

• Growth momentum is expected to sustain for at least the next three to four years, driven by AI and next-generation design pipeline.

• N3 accelerator production is expected to continue ramping up in Q3 2026.