Montage Tech sees interim profit surge up to 81% on AI chip demand

Montage Technology forecast H1 net profit of as much as RMB 2.1 billion, up 81% from a year earlier, driven by AI-linked chip demand.

The company attributed the growth to "the AI industry trend and strong market demand," with DDR5 RCD chip shipments rising as sub-generations iterated and new interconnect products gaining traction, Montage said in a filing.

Revenue reached about RMB 3.34 billion in the six months through June, up 27% from RMB 2.63 billion a year earlier. Interconnect chip sales, the main revenue driver, totaled about RMB 3.11 billion, up 26% year on year. Second-quarter interconnect revenue alone was RMB 1.69 billion, up 28% from a year earlier and 20% sequentially. Net profit after excluding share-based payment expenses ranged from RMB 2.08 billion to RMB 2.28 billion, up 56% to 71%.

The results underscore Montage's position as a key beneficiary of the AI infrastructure buildout, with its memory interface and interconnect chips essential for high-performance computing and data center servers. The company's shares fell 4.5% on Thursday, paring gains from a 16.8% surge earlier this month.

Separately, Montage disclosed that South Korean prosecutors raided its local office on July 15 over potential antitrust violations. The company said it is cooperating fully and that no directors or employees have been accused. Business operations remain normal, Montage said, adding it cannot predict the investigation's outcome or financial impact.

Chairman and Chief Executive Officer Yang Chonghe proposed an A-share buyback after the stock's Shanghai-listed shares fell more than 20% over 20 consecutive trading days. The buyback, to be funded from the company's own cash, would run for three months from board approval, with the repurchase price capped at 150% of the 30-day average trading price. Yang, who hasn't traded shares in the past six months, said he would vote for the proposal.

The profit alert signals management expects AI-driven demand to sustain momentum through the second half. Investors will watch for the interim report's full segment margins and any update on the South Korean probe.

This article is for informational purposes only and does not constitute investment advice.