Alphawave reports record bookings in fourth quarter

Alphawave IP Group reported record quarterly bookings of $128.7m in its fourth quarter on Monday, marking a 36% increase compared to the same period in the prior year.

The London-listed silicon chip technology and intellectual property specialist, which trades as Alphawave Semi, said about 90% of the bookings came from advanced nodes, specifically 7nm and below.

Notably, licence and non-recurring engineering (NRE) bookings reached an all-time high of $121.1m, representing a 245% increase from the final quarter of 2022.

The majority of the bookings were from Europe, Middle East and Africa (EMEA), Asia-Pacific excluding China, and North American customers.

However, royalties and silicon orders declined significantly in the period to $7.6m, reflecting a strategic shift away from lower-margin silicon business with Chinese customers.

Alphawave said it still anticipated some silicon orders from Chinese customers in 2024, albeit at a reduced level compared to 2023.

The company said it maintained a strong pipeline of opportunities for the first quarter of 2024, reflecting the scalability of its technology through IP licensing and custom silicon.

It said the Connectivity Products Group was on track to begin generating revenue in 2024.

Alphawave Semi said its custom silicon design wins in 2023 had the potential for a lifetime revenue of $500m, with the first silicon production orders expected in 2025.

It achieved seven new design wins in the fourth quarter, primarily from existing customers, emphasising its strength in artificial intelligence (AI) and data infrastructure markets that demand advanced connectivity technology.

In the fourth quarter, Alphawave also expanded its technology leadership by signing a major IP licence deal extension with a leading Asia-Pacific customer, which includes UCIe, PCIeGen7, 224G, and 2nm technology.

Additionally, the company said it secured a 5nm IP licence deal with a prominent North American customer, demonstrating continued market momentum in leading-edge connectivity solutions.

The company said its involvement in ‘Arm Total Design’, an ecosystem for specialised solutions based on Arm Neoverse Compute Subsystems, positioned it to deliver advanced connectivity solutions.

Looking ahead, Alphawave Semi maintained its outlook for 2023, expecting revenue in the range of $340m to $360m and adjusted EBITDA of about $87m, representing around 25% of revenue.

Despite the uncertain macroeconomic environment, the company's strong pipeline, growth trends in data infrastructure markets, and investment in next-generation AI-centric connectivity solutions gave its board confidence in the future.

“In the past quarter we achieved record quarterly bookings of $128.7m, predominantly in our high margin IP and custom silicon NRE business,” said president and chief executive officer Tony Pialis.

“We continued to increase our market share in advanced nodes with a major IP extension with a leading Asia-Pacific customer and our second 3nm custom silicon design win.

“Our first quarter 2024 pipeline remains strong with continued high demand from customers for our high-performance IP and products.”

Alphawave said it would report its audited results for the year ended 31 December in April.

At 0837 GMT, shares in Alphawave IP Group were up 12.07% at 130p.

Reporting by Josh White for Sharecast.com.