Alchip, 34% off its high, reports October 30 with its $9.3 billion AWS forecast living only in trader posts
The Taipei chip house printed second-quarter revenue down 19 percent with its 3-nanometer ramp just begun. The bull case, US$9.3 billion by 2028 from designing and building Amazon's AWS chips end to end, exists in public only as a trader post.
Vincent Jiang · 4 min read
The ramp started in May; the proof is due October 30
Johnny Shen, Alchip's−2.84% — Alchip's, down 2.84 percent today chairman, chief executive and president, put one fact under the second-quarter numbers in August: shipments of a 3-nanometer AI accelerator to a North American customer began in May, with the ramp expected to run through the third quarter 1. Alchip does not name the client. DigiTimes has reported AWS as its main customer since 2024, the year Amazon−0.78% — Amazon, down 0.78 percent today subscribed to Alchip shares in a private placement 2. The third-quarter report scheduled for October 30 is the first print that shows whether that ramp became revenue or stayed a roadmap 3.
The stock is 34 percent off its high and still 56 times earnings
Alchip (TWSE: 3661) designs application-specific integrated circuits, chips built for one customer's workload, on a turnkey basis that runs from design through manufacturing. It last traded at TWD 3,705 on October 15, 34 percent under its TWD 5,640 high, at a TWD 304.1 billion market value 3. The day before, at TWD 3,940, the same shares carried a price-to-earnings ratio of 56 11. The discount has a history: revenue fell from US$1.6 billion in 2024 to about US$992 million in 2025 after Alchip missed one product generation from its largest customer, and management guided roughly 80 percent of this year's revenue into the second half on the new 3nm programs 4.
Amazon licenses the blueprints, funds the boards, buys the suppliers
Amazon, meanwhile, has been buying pieces of the stack that builds its chips. On September 30, AWS signed a multi-year licensing deal worth more than US$1 billion with Synopsys−3.46% — Synopsys, down 3.46 percent today, the chip-design software firm, covering Amazon's three custom chip lines, the Graviton processor, the Trainium AI accelerator and the Nitro networking and security chip, with royalties tied to production volume 56.
The same day brought word of an NT$1.59 billion (US$49.88 million) Amazon placement into Gold Circuit Electronics, the circuit-board maker for Trainium servers 7. An October 14 trader post adds a longer list: it counts Amazon with ownership or warrants in Applied Optoelectronics, Marvell−3.61% — Marvell, down 3.61 percent today, Astera Labs−2.44% — Astera Labs, down 2.44 percent today, Credo−1.22% — Credo, down 1.22 percent today and Alchip itself, with no terms or filings behind the count 8. The 2024 placement already put the customer inside the designer's shareholder register 2. Andy Jassy, Amazon's chief executive, has put Amazon's annualized revenue from its own chips at roughly US$20 billion 6.
Printed revenue against a tweeted forecast
The printed quarter: revenue of US$241.7 million, down 18.7 percent year over year but up about 83 percent from US$132.4 million in the first quarter; net income of US$51.8 million, up 20.7 percent; 3nm and 2nm work, 47 percent of revenue; North America, 51 percent 1. The forecast: a post attributed to Morgan Stanley, circulating since October 13, puts Alchip's Amazon AWS turnkey revenue at US$2.8 billion in 2027 and total turnkey revenue at US$9.3 billion in 2028, with US$8 billion of that from a 2nm Trainium 4 chip 9. Morgan Stanley−1.66% — Morgan Stanley, down 1.66 percent today has named Alchip a key design provider on Trainium before 4; no published note or filing carries these figures.
The ramp lifted Q2 revenue 83 percent in a quarter, still 19 percent below last year
Data
| Revenue | |
|---|---|
| Q2 2025 | $297.4 |
| Q1 2026 | $132.4 |
| Q2 2026 | $241.7 |
The forecast puts 2028 turnkey work at more than nine times Alchip's 2025 revenue
- Revenue
- Estimate
Data
| Revenue | |
|---|---|
| FY2025, printed | $0.99bn |
| 2027E AWS turnkey (estimate) | $2.8bn |
| 2028E all turnkey (estimate) | $9.3bn |
The bull case is real, just not that number
TrendForce expects custom ASIC shipments to grow 44.6 percent this year against 16.1 percent for merchant GPUs, the processors Nvidia−1.89% — Nvidia, down 1.89 percent today sells to any buyer 4. Morgan Stanley estimated in late 2025 that more than 1.5 million Trainium chips would ship in 2026, with Alchip as a key design services provider 4. Simply Wall St lifted its Alchip target to TWD 6,800 on October 6 10, and listed Taipei rival Global Unichip trades at 212 times earnings to Alchip's 56 11. The distinction is provenance: the Q2 ramp appears in a printed earnings release, while the 2028 figure appears only in a trader's post quoting a Morgan Stanley revenue forecast for Alchip's AWS work.
What the print has to show
The checklist is short: sequential revenue against Q2's US$241.7 million, the North America share above 51 percent, the 3nm and 2nm mix, and whether the second-half weighting lands as guided. Amazon licenses the blueprints, funds the circuit boards and holds a piece of the designer; how much design margin Alchip keeps is the number October 30 starts to price.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
