Alphawave IP Group sees bookings soar amid computer chip shortage

Alphawave IP Group PLC (LSE:AWE) hiked its full year guidance as the computer chip designer enjoyed very strong bookings momentum and said the global shortage of semiconductor manufacturing capacity "has only reinforced the importance of semiconductor technology on a global scale".

Revenues in the first half of the year, a period when the Toronto-based company completed its flotation in London, came in at US$27.6mln, a rise of 140% year-on-year.

For the whole of 2021, revenues are expected to top US$75mln, which would be 125% higher than the previous year.

As they rise, revenues are also becoming more diverse across customers, end markets and regions, with six new customer wins spanning storage, networking, 5G wireless, AI and optical markets.

The period saw Alphawave, which is opening a UK R&D HQ in Cambridge, UK agree a master license framework agreement with “one of the world's largest chip makers in North America”, which it said “will serve as the basis for strategic collaboration and licensing across numerous business units and projects with our most advanced technology”, while other developments included new design wins with top-tier customers in the US and Korea and five of the top eight global semiconductor companies now using the company’s technology.

Bookings momentum was very strong in the half, surging 490% higher in the first half to US$196mln, with full year guidance for at least US$230mln as “multiple US wins” are expected in the second half.

Underlying earnings (adjusted EBITDA) were US$13.9mln in the first half, compared to US$6.3mln a year ago, though margins slipped to 50% from 55%. The business closed the half with a net cash position of US$519.1mln, reflecting the £347mln (US$492mln) IPO fundraising. 

“The first half of 2021 was a breakout period for us, with exceptional growth in revenue and bookings which underpins our confidence in raising full year guidance,” said president and chief executive officer Tony Pialis.

“The strength of demand for our market-leading IP, combined with the platform provided by our successful IPO, will enable us to continue to expand our leadership position in the connectivity space and sustain our long-term growth trajectory. We are also proud to have enabled several of our early and most advanced customers to move to production with our 100G technology.

“We are excited about the next phase of our growth as we transition more customers into production in 2021 and beyond.”