Chips&Media Reports Q2 Revenue of 6.8 Billion KRW, Up 11% Year-on-Year

Chips&Media announced on the 26th that its consolidated sales for the second quarter of 2023 reached 6.8 billion KRW, with an operating profit of 1.9 billion KRW. While sales increased by 11%, operating profit decreased by 1.9%.

The increase in sales was driven by the growing demand for video processing within AI (Artificial Intelligence) industrial data centers, leading to increased licenses for GPU SoC (Graphics Processing Unit System on Chip) and AI SoC (Artificial Intelligence System on Chip). A Chips&Media representative stated, “Although royalty revenue declined due to a contraction in the video home appliance market, the booming AI semiconductor market boosted AI SoC license sales for data centers, driving overall sales growth.” They added, “With the increase in AI-related licenses, successful productization of semiconductor chips is expected to lead to significant growth in the future.”

Meanwhile, operating profit slightly decreased due to increased recurring R&D expenses caused by the expansion of R&D personnel. Additionally, regarding the redeemable convertible preferred shares (RCPS) issued in November last year, the stock price at the end of Q2 2023 significantly exceeded the issue price, resulting in a derivative valuation loss of approximately 13 billion KRW, which caused a decrease in net profit for the period. This derivative valuation loss is an accounting loss unrelated to cash outflow.

Kim Sang-hyun, CEO of Chips&Media, said, “The AI market, sparked by ChatGPT, is rapidly increasing demand for AI semiconductors. This has led to a rise in new semiconductor chip development and expanded opportunities for IP licenses.” He added, “Starting in Q4 this year, we will begin promotions of video-specialized NPU IP to domestic and international clients, aiming to lead the global video IP market.”

This content was produced with the assistance of AI translation services.