Taiwan's Alchip Makes Chips That Power The AI Boom

The fabless chip design company focuses on high-performance chips that are essential in both sectors. Alchip's newer high-performance, yet energy-efficent, 16-nanometer chips were ideal for mining bitcoin and other cryptocurrencies in 2015, just as the price of bitcoin rose from around $300 to hit an initial peak of over $14,000 in late 2017. Alchip has seen five consecutive years of revenue growth, benefiting from increased demand as advanced chips find their way into new products and applications, mostly recently AI. Last year, the company's sales were $460 million, a 24% rise over the previous year, while net profit was $77 million, a 23% increase over the previous year. As Alchip delves deeper into more leading-edge chip design, those at the 7nm or below level, it is also building a moat around its business that presents high barriers to entry, with the increased complexity and cost in creating such chips. Sales of chips in the 7nm or lower category contributed 68% of Alchip's revenue last year. Alchip's chips are known as ASIC, or application-specific integrated circuit, customized chips. Analyst Priestley says the spread of self-driving vehicles will drive demand for AI chips.