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Expanded customer base with 8 new designs, including two new top semiconductor companies
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Strong design wins in the fourth quarter reflect our hybrid business model, combining IP and silicon
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Second design win with optoelectronics products
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Tapeouts of several leading next generation products for solutions in 224G, PCI-Express Gen6, CXL3.0, HBM 3.0 and UCIE
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The first full three-month consolidation of OpenFive into the Group
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Management remains confident in business prospects
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The company is changing to Alphawave Semi, reflecting the expanded business model
LONDON and TORONTO, January 13, 2023 /CNW/ – Alphawave IP Group plc (LSE: AWE) (“Alphawave Semi”, “Alphawave”, the “Company”), a global leader in high-speed connectivity for the world’s technology infrastructure, is pleased to announce its trading and business update for the quarter which have ended December 31, 2022.
|
million US dollars |
Fourth quarter 2022 |
Fourth quarter of 2021 |
To change |
|
License and NRE |
35.1 |
18.5 |
90% |
|
Silicone royalties and orders |
59.7 |
7.0 |
n.m |
|
New bookings (excluding VeriSilicon and WiseWave multi-year subscription licenses) |
94.8 |
25.5 |
272% |
|
Additional design gain activity – FSA withdrawals and resale licenses in China1 |
– |
– |
n.m |
|
WiseWave multi-year subscription licenses |
– |
– |
n.m |
|
Number of end customers (at the end of the period)2 |
69 |
20 |
n.m |
Due to rounding, the numbers shown in the table may not correspond to the totals stated, and the percentages may not accurately reflect the absolute figures.
Tony PialisPresident and CEO of Alphawave IP said: “We finished the final year of 2022 with strong momentum in design success and a rapidly expanding customer base. Building on a broader product portfolio, our design success streak remains strong as we can now address more of our customers’ connectivity needs, via silicon IP and custom silicon . In the fourth quarter of 2022, we saw the benefits of our hybrid business model and the potential to further monetize our high-performance IP through silicon. We also recently completed several large tapeouts for new next-generation products in 224G, HBM, and UCIE-based chiplets . All of this makes us very excited about the year ahead and we remain confident in the long-term growth potential of our business.”
John Lofton HoltCEO of Alphawave IP said: “The level of bookings in the final quarter of the year reflects the growth potential of our connectivity technology and the continued strong performance of our team. Our talented team and leadership in cutting-edge technologies support our long-term ambition and value creation for shareholders and other stakeholders.”
Key highlights
Licensing and engineering one-off (“NRE”) bookings in the fourth quarter of 2022 were up 90% year-over-year. Including estimates of potential future royalties3 and silicon orders, new bookings excluding the WiseWave multi-year subscription license increased 272% year-over-year. License and NRE bookings in the fourth quarter were primarily driven by clients from North America and APAC, with less than 10% from China4.
In Q4 2022, we also secured our second design win for our optoelectronics products targeting next-generation 800G ethernet applications. This design win leverages our strong electro-optical IP portfolio and demonstrates the potential to create value by meeting more of our customers’ connectivity needs.
Cumulative reservations during the life of the Company5 exceeded 580 million dollars.
Expanding technological leadership and strong customer appeal
Since 2017, the company has demonstrated a leading position in connectivity technology in cutting-edge technology, now at 3nm. Reservations of licenses and NREs in the fourth quarter of 2022 were mainly on 7nm, 5nm and 4nm. The company expects further design wins in 3nm technology and continues to work with its foundry partners in 3nm technology and beyond.
Furthermore, in the fourth quarter, the company shipped silicon wafers for its next generation 224G, PCI-Express Gen6, HBM3 and UCIe interface IP in 5nm and 4nm processes. 224G, PCI-Express Gen6, CXL3.0, HBM3 and UCIe and the next generation of network, memory and chiplet interfaces that are essential for AI, servers, storage and networking devices that are heavily used by hyperscalers. With our expanded IP portfolio, we are strongly positioned to deliver end-to-end connectivity solutions for our IP and silicon-enabled clients.
In Q4 2022, Alphawave joined TSMC’s Open Innovation Platform (OIP) 3DFabric Alliance. As a founding member, Alphawave will support TSMC’s OIP to launch a new chiplet-based ecosystem to accelerate next-generation semiconductor development.
In line with the previous year, there were no flexible consumption accounts in the fourth quarter of 20226 (“FSA”) withdrawals or China (VeriSilicon) reseller business7. Both FSAs and reseller agreements represent the conversion of customer obligations into design gains.
Design win activity in the quarter was strong with 8 new design wins, including 4 from new customers and 4 from repeat customers. In the quarter, we built on the benefits of the hybrid business model with four new custom silicon wins in September. Our hybrid model enables the enterprise to generate larger revenue streams by capturing the full value embedded in our customized silicon offering.
Alphawave now has seven of the top ten semiconductor companies as customers8which is a reflection of its continued strength in data infrastructure markets that require the most advanced connectivity technology in the world.
Outlook
Alphawave expects revenue from 2023 340 million US dollars to 360 million US dollars and adjusted EBITDA of approx 87 million US dollars in the middle of the income guidance range.
Despite the uncertain macroeconomic environment, our growing development reflects positive growth trends in data infrastructure markets and continued investment in next-generation connectivity solutions. This combined with our talented team and strong balance sheet gives us confidence in our future.
Alphawave IP changes name to Alphawave Semi
Alphawave IP rebranded to Alphawave Semi to reflect its expansion into a vertically integrated semiconductor company. Merging IP and silicon capabilities adds enhanced value to customers and serves more of their high-speed connectivity needs. The new identity preserves the Alphawave brand that customers have come to depend on and trust. Alphawave Semi continues to expand the technology leadership it has built on high-speed IP connectivity, with a mission to accelerate critical data infrastructure at the heart of the digital world.
About Alphawave Semi
Alphawave Semi is a global leader in high-speed connectivity for the world’s technology infrastructure. Faced with exponential data growth, Alphawave Semi technology meets a critical need: enabling data to travel faster, more reliably and with better performance at lower power. We are a vertically integrated semiconductor company, and our IP, custom silicon and connectivity products are deployed by global first customers in data center, computing, 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 learn more about Alphawave Semi, visit: awavesemi.com
Disclosure of related party information
There are no new related parties in this announcement.
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.
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1 Both FSA (Flexible Spending Account) withdrawals and resale licenses in China convert previously announced contractual obligations included in provisions reported in prior periods into new product design gains that will be recognized as revenue over time. |
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2 It includes customers from OpenFive who were not already Alphawave customers and who signed contracts from 1St September 2022 |
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3 Our provisions in some cases include our estimate of potential future royalties. Our royalties are estimated based on contractually obligated upfront royalties or, in limited cases, sensitive volume estimates provided by customers. |
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4 These Chinese customers are outside the scope of the WiseWave and VeriSilicon agreement. |
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5 Since its foundation in 2017. |
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6 FSAs or flexible spending accounts are contracts with customers who have committed to regular periodic payments. These payments do not apply to specific licenses, but can be used as credit for future deliveries. FSA withdrawals represent the earned value of transactions signed during the period, against which FSA payments will be credited and converted into income over time. |
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7 In February 2021, Alphawave IP signed a three-year exclusive subscription reseller agreement with VeriSilicon with a minimum value of $54 million. The vendor agreements represent VeriSilicon’s post-licensing of IP to third parties in China and do not represent additional provisions for the company as they are part of the $54 million minimum commitment. |
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8 Semiconductor device companies ranked by market capitalization. |
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SOURCE Alphawave IP Group Plc
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