M31's Revenue Grew Against the Trend by 18.5% Last Year and Will Increase Investment in Advanced Processes This Year

March 8, 2024 -- M31 Technology Corporation (M31), a leading global provider of silicon intellectual property (IP), announced at today’s inverstor conference (03/05) that the consolidated revenue for the full year of 2023 increased by 18.5% compared to the previous year, reaching a historical high of NT$1.61 billion with EPS of NT$12.6 and maintaining a 100% high gross margin. Despite the semiconductor market experiencing a downturn last year, M31 still achieved double-digit growth, benefiting from the successful deployment of advanced processes. Focusing on this year, the continuing royalties from advanced process contracts will drive revenue growth. However, due to the traditional off-season effect, the negative impact of production royalties will continue into the first quarter of this year. There will also be increased investment in R&D expenses for advanced processes this year, keeping a cautious outlook on profit growth prospects.

M31 is currently fully engaged in the development of 3nm processes. This year, both Foundation IP and high-speed interface IP are planned to be introduced into high-end applications such as automotive electronics, data centers, and smartphones. M31 continues to collaborate with leading foundry customers on the latest process technology platforms and actively expands cooperation with Taiwanese IC design companies, expecting the scale of production royalties to further expand in the future. In terms of overseas market development, the United States is a key growth market this year, where the demand for AI applications and advanced processes continues to grow. M31 has long been involved in the IP required for AI applications such as data transmission, image processing, data storage, and memory. Plus, the fact that US-based foundries are beginning to benefit from massive government subsidies, all of which will bring new opportunities for M31; In China, IC design companies that entered the fields of mobile communication chips, smart Bluetooth headset chips, and automotive chips in the fourth quarter of last year, with mass production capabilities, are also expected to launch new technology platforms for mature processes at foundries this year. However, with the increasing complexity of advanced process design and more cautious customer evaluations of specifications, development timelines are expected to be extended, increasing the uncertainty of future project schedules.

Looking ahead, M31’s CEO, Scott Chang, stated that the benefits of the company’s global expansion strategy are evident this year, and expanding R&D expenses is key to converting them into revenue contributions in the future in order to enhance the development capability of advanced processes. The demand from foundries and chip design companies will complement each other, further consolidating M31’s resilience in facing economic cycles. Faced with the strong project development momentum of foundries and the tapeout of high-end application chips by chip design companies, M31 will spare no effort and believes that the price upward trend in licensing fees will be a significant driving force for future revenue growth.

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