TIDMAWE
RNS Number : 0175R
Alphawave IP Group PLC
24 October 2023
Q3 2023 Trading and Business Update
-- Expanded customer base with 9 new design wins, 5 IP licence
design wins and 4 custom silicon design wins
-- Approximately 80% of Licence & NRE bookings in advanced nodes, 7nm and below
-- Advanced node custom silicon design win with our 112G SerDes IP
-- Two 3nm IP licencing design wins with a leading
telecommunications business and a hyperscaler; 2 chiplet-based
design wins
-- Strong rate of quarterly design wins reflects the scalability of our technology
-- Custom silicon NRE booking of over US$20m signed in the first three weeks of Q4 2023
-- Design award for next generation chiplet-based AI part in early Q4 2023
-- Strong pipeline of opportunities in Q4 2023
-- Management remains confident in the outlook for the business
LONDON, United Kingdom and TORONTO, Ontario, Canada 24 October
2023 - Alphawave IP Group plc (LN: AWE, the "Company" or "Alphawave
Semi"), a global leader in high-speed connectivity for the world's
technology infrastructure, is pleased to publish its trading and
business update for the three months ended 30 September 2023.
US$m Q3 2023 Q3 2022 Change
Licence and NRE 42.9 57.8 (26)%
Royalties and Silicon Orders 30.1 22.2 35%
New Bookings 72.9 80.0 (9)%
Additional design win activity - FSA - 8.5 nm
drawdowns and China re-sale licences
[1]
Due to rounding, numbers presented in the table may not add up
to the totals provided and percentages may not precisely reflect
the absolute figures.
Tony Pialis, President and Chief Executive Officer of Alphawave
Semi said: "In the past quarter we achieved exciting new wins such
as a networking custom silicon with our 112G SerDes IP for a tier
one semiconductor device company, and a 3nm IP licencing deal for a
leading European telecommunications business. Design wins continued
during the first few weeks of October as we engage with our
customers to build the next generation of AI infrastructure. Our
strong pipeline continues to grow alongside customers' demand for
our high-performance IP and products. We are excited about the
prospects ahead and the long-term growth potential of our
business."
John Lofton Holt, Executive Chairman of Alphawave Semi said:
"The strong momentum of design wins in advanced nodes is a
reflection of our technology leadership in the most advanced
technologies and the role it plays in the development of
next-generation AI infrastructure. As we approach the end of the
year, we remain laser focused on strong execution and long-term
value creation."
Key Highlights
New bookings in Q3 2023 were 9% below the prior period at
US$72.9m (Q3 2022: US$80.0m). In the first three weeks of Q4 2023
we signed an additional custom silicon NRE booking of over
US$20m.
Licence and Non-recurring Engineering ("NRE") bookings in Q3
2023 were 26% below Q3 2022 as the signature of a custom silicon
NRE booking slipped into Q4 2023. North American customers
represented over two thirds of these bookings, including an
advanced node custom silicon design win with a leading North
American semiconductor device company and two 3nm IP licencing
design wins, with a leading European Telco business and a North
American hyperscaler. Chinese customers[2] represented 17% of the
Licence & NRE bookings in the period (11% on a year-to-date
basis) and approximately 80% of the Licence & NRE bookings were
in advanced nodes, 7nm and below.
Royalties and Silicon orders were US$30.1m, up 35% over Q3 2022.
The level of silicon orders was driven by pre-existing custom
silicon designs mostly for Chinese customers. In the quarter we
also ramped the production of AI silicon for a Japanese
customer.
Our pipeline of opportunities in Q4 2023 is very strong. The
level of bookings in the quarter reflects the scalability of our
technology through IP licensing and custom silicon. Our vertically
integrated business model enables us to generate larger revenue
streams and capture the full value embedded in our custom silicon
offering. Our Connectivity Products Group continues to make made
good progress toward our plan to start generating revenue in
2024.
Expanding Technology Leadership and Strong Customer Traction
Since 2017, the Company has demonstrated connectivity technology
leadership in leading-edge technologies, including the 3nm process.
In Q3 2023 we licenced our 3nm 112G SerDes IP to a leading European
telecommunications business and to a North American hyperscaler.
These design wins reflect the increased market momentum of
leading-edge connectivity and chiplet architectures. The Company
expects further design wins in 3nm and continues to work with its
foundry partners in 3nm and beyond.
With our expanded IP portfolio, we are strongly positioned to
deliver complete connectivity solutions for our IP and custom
silicon customers. In Q3 2023, we won an advanced node custom
silicon design win with a leading semiconductor device company
incorporating our 112G SerDes technology. In addition, during early
Q4 2023, we received a design award for a next generation
chiplet-based AI part, with a view to execute a definitive
agreement during the quarter. As a result of this design award,
Alphawave Semi will replace a long-standing semiconductor vendor, a
reflection of the strength of our connectivity technology and
custom silicon offering.
In Q3 2023, there were no Flexible Spending Accounts ([3])
("FSA") drawdowns (Q3 2022: US$3.0m) and no China (VeriSilicon)
reseller deals ([4]) (Q3 2022: US$5.5m). Both FSA and reseller
deals represent the conversion of customer commitments to design
wins.
Overall, design win activity in the quarter was strong with 9
new design wins, 3 from new end-customers and 6 from existing
end-customers.
Alphawave Semi has more than half of the top twenty
semiconductor device companies as customers [5] , a reflection of
its continued strength in the data infrastructure markets that
require the world's most advanced connectivity technology.
In Q3 2023, the Company announced two successful tapeouts on
TSMC's most advanced 3nm process of its High Bandwidth Memory 3
(HBM3) PHY and Universal Chiplet Interconnect Express(TM)
(UCIe(TM)) PHY IPs, paving the way for a new generation of
chiplet-enabled silicon platforms, tailored for hyperscaler and
data infrastructure customers. Alphawave Semi was the first company
to announce UCIe PHY IP supporting faster die-to-die data rates of
24Gbps per lane, delivering an impressive bandwidth of 7.9 Terabits
per second over a tight space of a mm of a chip beachfront.
In AI and high-performance computing (HPC) systems where the key
performance indicator is Memory Bandwidth per Watt, HBM emerges as
a top choice, offering highest bandwidth, optimal area footprint,
and superior power efficiency. Alphawave Semi's HBM3 PHY IP targets
leading edge high-performance memory interfaces up to 8.6Gbps and
16 channels, operating at very low power. Customers are deploying
complete HBM subsystem solutions from Alphawave Semi which
integrate the HBM PHY with a highly configurable HBM controller
that can be fine-tuned to maximize the efficiency for application
specific AI and high-performance computing workloads.
Alphawave Semi announced on 18 October that it had joined Arm
Total Design , an ecosystem to make specialised solutions based on
Arm(R) Neoverse(TM) Compute Subsystems (CSS) widely available
across the infrastructure. Generative AI has fundamentally
transformed data center compute and connectivity by creating a
surge in demand for compute, memory bandwidth, I/O speeds, and
energy efficiency. Customers gain a significant time to market
advantage by integrating Alphawave Semi's Universal Chiplet Express
(UCIe(TM) ) enabled custom silicon and pre-built connectivity
chiplets with Arm Neoverse CSS compute.
Outlook
The outlook for 2023 remains unchanged. Alphawave Semi expects
2023 revenue of US$340m to US$360m and adjusted EBITDA of
approximately US$87m (or approximately 25% of revenue), which is at
the mid-point of the revenue guidance range.
Despite the uncertain macroeconomic environment, our growing
pipeline reflects positive secular growth trends in data
infrastructure markets and the continued investment in
next-generation AI- centric connectivity solutions. This, combined
with our talented team and strong balance sheet, give us confidence
in our future.
About Alphawave Semi
Alphawave Semi is a global leader in high-speed connectivity for
the world's technology infrastructure. Faced with the exponential
growth of data, Alphawave Semi's technology services a critical
need: enabling data to travel faster, more reliably and with higher
performance at lower power. We are a vertically integrated
semiconductor company, and our IP, custom silicon, and connectivity
products are deployed by global tier-one customers in data centers,
compute, networking, AI, 5G, autonomous vehicles, and storage.
Founded in 2017 by an expert technical team with a proven track
record in licensing semiconductor IP, our mission is to accelerate
the critical data infrastructure at the heart of our digital world.
To find out more about Alphawave Semi, visit: awavesemi.com
Related Party Disclosures
There are no new related parties disclosed in this press
release.
###
Trademarks
Alphawave Semi and the Alphawave Semi logo are trademarks of
Alphawave IP Group plc. All rights reserved. All registered
trademarks and other trademarks belong to their respective
owners.
Contact Information:
Alphawave Semi John Lofton Holt, Executive ir@awavesemi.com
plc Chairman +44 (0) 20 7717 5877
Jose Cano, Head of IR
Brunswick Group Simone Selzer alphawave@brunswickgroup.com
Sarah West +44 (0) 20 7404 5959
Gravitate PR Lisette Paras alphawave@gravitatepr.com
Michael Terry Caraher +1 415 420 8420
LEI: 213800ZXTO21EU4VMH37
[1] Both FSA (Flexible Spending Account) drawdowns and China
re-sale licences convert previously announced contractual
commitments included within bookings reported in prior periods to
new product design wins which will be recognised as revenue over
time.
[2] These Chinese customers are out of scope from the WiseWave
and VeriSilicon agreements.
[3] FSAs or Flexible Spending Accounts represent contracts with
customers who have committed to regular periodic payments. These
payments are not in respect of specific licences but can be used as
credit against future deliverables. FSA drawdowns represent the
design win value of transactions signed during the period, against
which FSA payments will be credited and will convert to revenue
over time.
[4] In February 2021, Alphawave IP signed a three-year exclusive
subscription reseller agreement with VeriSilicon with a minimum
value of US$54 million. Reseller deals represent the subsequent
licensing of IP by VeriSilicon to third parties in China and do not
constitute additional bookings for the Company as they are part of
the US$54 million minimum commitment.
([5]) Semiconductor device companies ranked on market
capitalisation as of 17.10.23.
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END
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