ASIC design services and silicon intellectual property (IP) factory Faraday Future (3035) held a press conference today. Faraday General Manager Wang Guoyong pointed out that the company has recently made breakthrough progress in its two growth engines of high-end packaging and advanced processes. It has made another breakthrough in the advanced process business and successfully received a large-scale project for cloud AI applications from the United States, using the industry-leading 2 nanometers. Mi GAA (gate surround) process, this AI project is of great significance. The design process, design complexity, NRE (entrusted design) amount, and high-end packaging technology have all set new records for the company, which will help to receive orders and promote subsequent advanced processes and high-end packaging. It is optimistic that each product line will continue to grow next year, and the annual revenue growth rate is expected to be double digits.
Wang Guoyong said that the scale of this 2-nanometer AI ASIC project is approximately tens of millions of US dollars. It will start to contribute revenue in the first half of next year. It is the largest project in Faraday's history. It uses Samsung wafer foundry and cooperates with UMC (2303).
Faraday announced its third quarter financial report. In the third quarter, consolidated revenue reached 3.66 billion yuan, a quarterly increase of 11% and an annual increase of 13%. Operating gross profit was 1.56 billion yuan, a quarterly increase of 4% and an annual increase of 45%. The gross profit margin reached 42.5%. Operating profit It was 210 million yuan, a quarterly decrease of 21% and an annual increase of 443%. The operating profit margin was 5.8%. The after-tax net profit attributable to the owners of the parent company was 280 million yuan, a quarterly increase of 41% and an annual increase of 84%. The basic earnings per share was 1.07 yuan.
Looking back on the third quarter, Faraday said that driven by mass production business, consolidated revenue in the third quarter was not only better than original expectations, but also bucked the trend and increased by 11% quarterly and 13% annually, reaching 3.66 billion yuan. In terms of profit structure, due to the optimization of product mix, gross profit margin increased by about 9 percentage points compared with the same period last year, rising to 42.5%. Although operating profit fell slightly from the previous quarter, due to the expansion of revenue scale and improvement in gross profit structure, it increased significantly by more than four times compared with the same period last year, showing that profitability continues to improve. Operations in the third quarter set a number of records, including IP revenue hitting a record high, and mass production and single-quarter consolidated revenue both setting new highs for the same period in previous years.
In terms of products, IP revenue was NT$450 million, a quarterly increase of 4% and an annual increase of 8%, hitting a record high. NRE revenue was NT$310 million, a quarterly decrease of 31% and an annual decrease of 37%. Mass production revenue was the main growth driver this quarter, not only MCU-related revenue hit a new single-quarter high again, and ASIC mass production also increased simultaneously with the acceleration of shipments of AI-related high-end packaging projects, pushing mass production revenue up by 20% quarterly and 25% annually, reaching 2.91 billion yuan, setting a new high for the same period in previous years.
Looking forward, fourth-quarter revenue is expected to remain at a high level, the same as the previous quarter, and full-year revenue is expected to maintain growth. Facing the challenges of the external industrial supply chain and the booming demand for AI, the company's core values will continue to deepen and move towards providing a full range of value chain management, locking wafer production capacity, managing supply chains, coordinating packaging and testing schedules and dynamically controlling costs for customers, acting as an important core hub between customers' design services, wafer foundry and packaging and testing. At the same time, the company will continue to focus on the three main growth axes of AI efficient computing, advanced processes and high-end packaging, and continue to drive AI layout through one-stop services.
