[Reporter Zhuo Yijun/Taipei Report] IC design factory Xiangshuo (5269) held a press conference today. General Manager Lin Zhewei said that due to the surge in memory prices, the PC market was dragged down. The motherboard market demand fell by about 30% in the first half of the year. The decline has gradually converged since the third quarter. As some customers have begun to increase production plans, shipments are expected to recover in the first half of next year. In addition, Xiangshuo has also made progress in the ASIC business. The first-largest customer's new-generation platform project has completed sample delivery, pricing and contract signing. Xiangshuo has firmly maintained its position as a major supplier. The first product of the second ASIC customer has been developed and has begun small-scale shipments. It is also actively promoting cooperation plans with other potential ASIC customers.
Faced with rising cost pressures on upstream supply chains such as carrier boards, packaging and testing, and wafer foundry, Lin Zhewei pointed out that since the third quarter, it has gradually adjusted its quotations for its own brand products and negotiated cost sharing with customers. In order to further strengthen cost competitiveness and supply flexibility, Xiangshuo is actively promoting the supply chain diversification strategy, simultaneously evaluating and introducing second supply sources and overseas production capacity allocation at the wafer foundry and packaging and testing ends, and prioritizing the transfer of some mature products to fully support the production capacity needs of subsequent high-end product lines.
Xiangshuo's third-quarter consolidated revenue was 2.66 billion yuan, gross profit margin was 51.6%, operating profit was 578 million yuan, after-tax net profit was 1.969 billion yuan, and earnings per share were 26.60 yuan. The cumulative consolidated revenue for the first three quarters was 8.88 billion yuan, with a gross profit margin of 50.9%, net profit after tax of 5.84 billion yuan, and earnings per share of 78.66 yuan. The gross profit margin in the third quarter was better than the first two quarters, mainly due to the increase in the proportion of self-owned brand Host products and the recognition of NRE (entrusted design) income from the second ASIC customer.
In terms of its own products, PCIe Switch and SATA continue to expand, entering Edge AI, Physical AI, robots, Edge Server, NAS, IoT, IPC and other fields. PCIe Gen4 Switch has begun shipping, covering 12, 24 and 48 lanes. As customers' system specifications change from generation to generation, the ASP and revenue scale of the PCIe product line will increase. The revenue of PCIe and SATA in the first three quarters has exceeded last year's full year, and the annual growth rate is expected to reach 50%.
In terms of robot and Physical AI layout, Xiangshuo has not only expanded its edge computing needs such as PCIe Switch to enter the robot ecosystem, but Xiangshuo's USB4 Host Controller has become an important equipment of the iconic robot platform. Among them, the project is jointly developed with brand customers and is expected to officially enter mass production in 2027. At the same time, Xiangshuo and Infineon strategically cooperate to target the needs of machine learning vision and Physical AI systems. Through the integration of Infineon and Xiangshuo USB4 40Gbps host control chip ASM4242, developers and manufacturers will be able to implement high-speed USB connections in emerging AI and data-intensive applications, with stable high-bandwidth connections and wide deployment, as well as comprehensive support for devices, cables and hosts.
As for automotive and imaging market applications, the high-speed transmission of Xiangshuo and Techpoint is combined with the image processing technology of Xinding, and existing customers and channel resources are used to jointly expand the thermal imaging, automotive, drone, security monitoring and Edge AI/Physical AI markets.
