Shares in Alphawave Semi plummeted by more than a third after markets opened in London on Monday as the semiconductor IP business posted a more than halving in revenues and cut its guidance for the rest of the year.
The Leeds-based business posted sales of $91m in the first six months of the year, down by 51% compared to last year, while losses after tax more than quadrupled to $40m and the company’s debt climbed 42% to $142m.
Alphawave cut its full-year revenue from the previous range of $345m to $365m down to $310 to $330m, which it put down to “the merger of two large AI customers in Korea that resulted in the consolidation of development programmes already in progress”.
But the firm said bookings “remain strong” with total bookings up 20% compared to this time last year.
The company’s stock fell by 39% to 76p, wiping hundreds of millions of pounds from its market cap. The shares have now fallen by around 80% since the firm’s 2021 IPO.
John Lofton Holt, Executive Chairman of Alphawave Semi, said the company’s revenue and adjusted EBIDTA were “impacted by the timing of specific customer programmes.”
“We expect revenue and adjusted EBITDA in the second half to increase significantly over the first half as our high-quality design wins from last year tape out and convert into revenue.”
Aphawave put the sales fall down to “an expected strategic change in business mix including revenue from IP licences and silicon, and a significant reduction of legacy China business.” The company said its lower earnings was due to R&D investment in chiplets and new Silicon connectivity products, which would “ramp up production” in 2025.
Alphawave has operations in Toronto and London, with a global footprint in China, Europe and Korea. Founded in 2017, the company has more than 800 employees worldwide.