M31 Technology (M31), a leading global IP provider, held an investor conference today (March 19) and announced consolidated revenue of NT$1.48 billion for the full year 2024, representing a YoY decrease of 8.15%. Earnings per share (EPS) were NT$3.05, marking the first revenue decline since the company’s founding. Although significant investments have been made in advanced R&D and market expansion, the progress of foundry projects has fallen short of expectations, compressing profit margins for 2024. Despite short-term operational challenges, growth opportunities are anticipated in 2025. With the launch of 2nm IP development, steady demand for sub-6nm IPs from foundries, active project initiations by U.S.-based cloud service providers (CSPs), and the growth in the advanced process IP market sub-4nm driven by automotive ADAS applications, revenue for the first quarter of this year is still projected to achieve both YoY and QoQ growth—even with fewer working days. High per-unit licensing fees from advanced process technologies, along with royalties with mass production potential, are expected to provide strong momentum for business growth in 2025.
The demand for advanced process IP from IC design companies remains strong. In 2024, overall revenue from fabless new licensing projects grew by more than 30%, while sub-16nm nodes surged by 70%, demonstrating strong momentum in advanced processes. As edge computing accelerates the adoption of AI chips in end devices, M31 is expected to further expand its influence in the high-speed data transmission sector. Looking ahead to 2025, demand from leading companies for upgraded high-speed interface IP remains robust in key areas such as high-end smartphones, ADAS, AI inference, image recognition, and server storage interfaces. Licensing revenue from IC design firms for sub-4nm processes is expected to continue expanding.
Despite a decline of over 50% in new projects from foundry customers last year, M31 has continued to deepen its collaboration with leading foundries. This year, the company is not only expanding its R&D efforts for sub-6nm Foundation IP, but also expects the 12/16nm FinFET platform to enter mass production, further increasing royalty revenue. In addition, M31 continues to strengthen its cross-regional foundry ecosystem, having successfully secured a 5nm technology platform project with a South Korean foundry and advancing collaborations with China’s top three foundry groups on 22/28nm platforms with mass production potential. The onboarding of new overseas foundry partners is expected to drive strong growth in royalty income and lay a more solid foundation for the company’s long-term development.
M31 CEO Scott Chang stated that, given the shift in customer structure and the rising technical barriers to advanced process projects, increased R&D investment is imperative. Deep regret was expressed over the operational results for 2024. Looking ahead, project momentum from both foundries and chip design companies is expected to advance in parallel, with advanced process technologies remaining a key driver of revenue. M31 will take a more prudent approach in evaluating R&D resource allocation and, through solid market positioning and strategic adjustments, aims to emerge from the lows of 2024 and move toward recovery and growth.