Alchip's revenue jumps 516% to a record TWD 10.3 billion on custom AI chips, but profit grows half as fast
Alchip's monthly numbers are the cleanest public read on whether the hyperscaler shift from Nvidia's GPUs to custom silicon is turning into money. Revenue is turning; profit is not keeping pace, and holders of Taipei-listed ticker 3661 are the ones exposed to the difference.
Richard Tangthree-minute read
Alchip Technologies+0.68% — Alchip Technologies, up 0.68 percent today just turned the custom-chip argument into booked revenue. The Taipei-listed designer of application-specific chips, the ASICs cloud providers commission for their own workloads instead of buying Nvidia's−5.64% — Nvidia, down 5.64 percent today general-purpose GPUs, reported October revenue of TWD 10.3 billion, up 515.81% year on year and the strongest month in its history, on 3-nanometer AI accelerator projects for US cloud providers 1. The catch sits in the quarter behind it: profit grew half as fast as sales.
Cloud providers' custom-chip plans are now Alchip's shipping volume
Cloud providers want accelerators tuned to their own workloads and owned outright, the case Marvell−2.24% — Marvell, down 2.24 percent today chief executive Matt Murphy pressed at his investor day, and each program still has to beat Nvidia's merchant hardware on cost and performance 2. All four big US providers, Alphabet+2.40% — Alphabet, up 2.40 percent today, Amazon+1.06% — Amazon, up 1.06 percent today, Meta−0.90% — Meta, down 0.90 percent today and Microsoft+0.64% — Microsoft, up 0.64 percent today, are funding their own silicon 3.
Alchip turns those plans into shipping chips: its N3 accelerator entered production in May, began shipping in June, and October's record took ten-month revenue to TWD 48.1 billion, up 72.62% 14. Chairman and CEO Johnny Shyang-Lin Shen promises another record this quarter and triple-digit growth in 2027, on existing projects plus one newly landed customer 1.
Alchip's whole of 2025 brought in under a billion US dollars 5; the third quarter alone came close 6. Marvell and Broadcom+5.39% — Broadcom, up 5.39 percent today fold the same custom work into far larger businesses 23, which is why Alchip's monthly prints are the purest public telemetry this shift has.
The production mix thins Alchip's cut
The third quarter puts numbers on the gap 6.
Alchip's record quarter outran its profit: sales up nearly 4x, net income up 2.4x
- Sales
- Net income
Data
| Sales | Net income | |
|---|---|---|
| Q3 2025 | 6,569.86 TWD m | 1,327.91 TWD m |
| Q3 2026 | 26,050.94 TWD m | 3,251.06 TWD m |
Alchip kept roughly one dollar in eight of sales as profit, against one in five a year earlier 6. The likely cause is mix: production services, where Alchip buys wafers, packaging and testing for customers, carry a thinner spread than design work, and the coverage of these results flags the production share as the open margin question 1. In the quarter before the ramp, gross margin ran 35% 4. The customers are not named.
The margin verdict arrives early in 2027
The street already leans bullish: thirteen analysts average a TWD 5,824 one-year target against a 3,180 price on November 5 7. December's and January's monthly prints arrive first but carry revenue only; margin shows up in the quarterly report, and on the cadence Q3 set this week, the Q4 verdict lands early in 2027 7.
If net margin holds as production scales, Alchip earns a durable cut of a custom-chip market analysts at the research firm Bernstein size at $250–300 billion by 2028 8. If it keeps sliding, the value pools with the foundry and the cloud buyer, and the ramp is volume without profit.
The demand is settled; the designer's fee is not
Nvidia, Marvell and Broadcom holders should read these prints the same way: demand for owned silicon is broadening, down to MediaTek, the Taiwanese chip designer that built modules for Google's Tensor Processing Units and is near a deal with ByteDance 8. The demand side of this shift is settled. Whether the design partner gets paid for it is what the Q4 report tests 8.
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More about NVIDIA
NVDAFiscal Q2 2027Revenue rose 106% to $96.2B, 92.5% of it from Data Center, “driven by the ramp of our Blackwell Ultra infrastructure”. Gains on equity stakes of $7.8B lifted net income to $59.7B.
Show as a table
| Line | Value |
|---|---|
| Revenue | $96.2B |
| Gross margin | 75.0% |
| Operating margin | 66.2% |
| Net income | $59.7B |
| Hyperscale | $48.7B |
| AI clouds & enterprise | $40.3B |
| Data Center | $89.0B |
| Edge Computing | $7.2B |
| Gross profit | $72.1B |
| Cost of revenue | $24.1B |
| Other income | $7.8B |
| Operating income | $63.7B |
| Operating expenses | $8.4B |
| Tax | $11.8B |
| R&D | $7.1B |
| SG&A | $1.4B |
