REG - Alphawave IP Group - Q1 2024 Trading and Business Update

Alphawave IPAnnouncement

23/04/2024 07:00

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RNS Number : 6547L  Alphawave IP Group PLC  23 April 2024

Q1 2024 Trading and Business Update

 

·      Second consecutive quarter of bookings above $100m at US$117.9m

·      Licence and NRE bookings of US$108.9m up 75% over Q1 2023

·      Lower silicon orders reflect accelerated transition away from
China

·      Approximately 95% of licence & NRE bookings in advanced
nodes, 5nm and below

·      9 new design wins, mainly in APAC and North America

·      Strong pipeline of opportunities in FY 2024

·      Management remains confident in the outlook for the business

LONDON, United Kingdom and TORONTO, Ontario, Canada 23 April 2024 - 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 31 March
2024.

 

 US$m                                                                          Q1 2024  Q1 2023 1  (#_ftn1)  Change
   Licence and NRE                                                             108.9    62.3                 75%
   Royalties and Silicon Orders                                                9.0      35.8                 (75)%
 New Bookings                                                                  117.9    98.1                 20%

 Additional design win activity - FSA drawdowns and China re-sale licences 2   -        -                    nm
 (#_ftn2)

 

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: "We
started the year with another strong quarter of bookings in excess of US$110m.
We achieved several exciting new wins during the quarter, including two 5nm AI
custom silicon designs, for a Korean and a North American customer.  We also
signed a 4nm IP licencing deal for a leading North American automotive
company. Customers' demand for our high-performance custom silicon and IP
remains strong and the level of Q1 bookings underpins our confidence for the
year. We are excited about the year ahead and the long-term growth potential
of our business."

 

John Lofton Holt, Executive Chairman of Alphawave Semi said: "Our technology
leadership in the most advanced technologies is driving the ongoing momentum
of design wins and strong quarterly bookings. Following our updated revenue
outlook guidance last week that reflects our transition away from China and
changes in expected revenue recognition of long-term contracts in advanced
nodes, we are entering 2024 with strong business momentum and remain focused
on execution and long-term value creation."

 

Key Highlights

 

New bookings in Q1 2024 were 20% above the prior period at US$117.9m (Q1 2023:
US$98.1m).

 

Licence and Non-recurring Engineering ("NRE") bookings in Q1 2024 were 75%
above Q1 2023 at US$108.9m. APAC (excluding China) and North American
customers represented 93% of these bookings and approximately 95% of the
licence & NRE bookings were in advanced nodes, 5nm and below.

 

Royalties and Silicon orders were down significantly compared to Q1 2023 at
US$9.0m, as we actively de-prioritised the legacy lower margin silicon
business from Chinese customers and accelerate our transition away from China.
Silicon orders in the quarter were from EMEA and North American customers. We
expect further silicon orders from Chinese customers in 2024, albeit at a
lower level than in 2023.

 

The level of bookings in the quarter and our growing pipeline reflects the
scalability of our technology through IP licensing and custom silicon.

 

The Company has also received its first orders for silicon products from a top
networking equipment OEM in North America. 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

 

Alphawave Semi's customers include leading semiconductor device companies, as
well as data centre module makers and hyperscalers.

 

Overall, design win activity in the quarter was strong with 9 new design wins,
from new and existing end-customers. These wins reflect Alphawave Semi's
continued strength in AI and the data infrastructure markets that require the
world's most advanced connectivity technology.

 

Since 2017, Alphawave Semi has demonstrated connectivity technology leadership
in leading-edge technologies. In Q1 2024 we signed various licencing deals in
5nm and below. During the quarter we signed our first licensing deal with a
leading North American automotive business and a licencing deal with a leading
North American compute silicon company. These design wins reflect the ongoing
market momentum of leading-edge connectivity. The Company expects further
design wins in advanced nodes and continues to work with its foundry partners
in 2nm and beyond.

 

With our expanded IP portfolio and silicon expertise, we are strongly
positioned to deliver the most advanced connectivity solutions for our custom
silicon customers. In Q1 2024 we won an AI custom silicon design with a
leading APAC customer. This is a chiplet design win that leverages the
Company's full range of capabilities including IP, custom silicon, and
advanced packaging solutions. Furthermore, during the quarter we won
additional 5nm business with an AI North American business building next
generation AI solutions.

 

In Q1 2024, there were US$nil Flexible Spending Accounts(( 3  (#_ftn3) ))
("FSA") drawdowns (Q1 2023: US$nil). Both FSA and reseller deals represent the
conversion of customer commitments to design wins.

 

 

 

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 (http://www.awaveip.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 plc  John Lofton Holt, Executive Chairman            ir@awavesemi.com

                     Jose Cano, Head of IR                           +44 (0) 20 7717 5877
 Brunswick Group     Caroline Daniel      alphawave@brunswickgroup.com+44 (0) 20 7404 5959
 Gravitate PR        Lisette Paras                                   alphawave@gravitatepr.com

                     Michael Terry Caraher                           +1 415 420 8420

 

 

 

LEI: 213800ZXTO21EU4VMH37

 1  (#_ftnref1) Licence and NRE bookings in Q1 2023 have been adjusted for an
amount of US$4.9m related to a licence & NRE booking reported in Q1 2023.

 2  (#_ftnref2) 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.

 3  (#_ftnref3) 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.

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