KUALA LUMPUR: Chip design firm SkyeChip Bhd’s prospectus launch yesterday marks a significant milestone in Malaysia’s efforts to elevate the country’s semiconductor industry and move it up the value chain.
Michael Oh-Lau, chief executive officer of Maybank Investment Bank Bhd, noted that SkyeChip’s listing represents a significant addition to Malaysia’s public markets, as the listing, scheduled for May 20, would help lift the industry into a global powerhouse.
SkyeChip is a fabless integrated circuit (IC) design company specialising in silicon intellectual properties (IPs) and silicon products.
The group develops licensable IP blocks – such as high bandwidth memory, network-on-chip and die-to-die interconnects – which are integrated into customers’ chips, as well as custom application-specific integrated circuits (ASICs) tailored to specific use cases.
The company has over 318 designers and more than 100 patents filed across the United States, China and Malaysia since inception.
SkyeChip is positioning itself to tap into Malaysia’s broader push into advanced chip design under the government’s “Silicon Vision” initiative.
In March 2025, Malaysia announced a US$250mil (RM1.1bil) partnership with Arm Holdings to acquire key IP licences, including the Arm Compute Subsystem (CSS) and Arm Flexible Access (AFA), aimed at strengthening the country’s IC design ecosystem.
SkyeChip had applied for access to one CSS and one AFA platform in July 2025, and subsequently received letters of conditional approval in April 2026, with the terms and conditions currently being reviewed and evaluated.
When asked whether SkyeChip has received the CSS tokens, SkyeChip chief executive officer Datuk Fong Swee Kiang said the company is “still working on some of the details with the government to make sure that both parties are aligned”.
The country’s partnership with Arm has come under scrutiny in recent months, following an anti-corruption probe into the deal by local authorities.
SkyeChip plans to leverage the CSS platform to develop high-performance central processing unit (CPU) and artificial intelligence (AI) silicon products, and has earmarked RM82mil from its initial public offering (IPO) proceeds for this purpose.
If the company does not enter into an agreement for the CSS platform, the proceeds would be redeployed towards the development of custom compute and AI hardware accelerators that do not require the CSS platform, or the pursuit of alternative CPU solutions (such as RISC-V) for the high-performance CPU platform.
Fong said while the CSS initiative provides a boost, it is not a pre-requisite for the company’s growth.
“We have built the company over the past six years without CSS, through our own silicon IP and expansion into silicon products,” he said.
“No matter whether there is CSS or no CSS, the key factors are whether the company has the talent, the technology that is directly linked to AI and high performance computing, and the market.”
Fong added that SkyeChip is playing at a global level and in that sense, CSS is “definitely a boost to its positioning”.
On whether the Arm CSS initiative is critical for Malaysia’s push into advanced semiconductor design, Fong said it is difficult to generalise across the industry, as each company has its own strategy.
“It’s hard to comment from a sector perspective because every company and startup will have its own business model.
“What I can share is SkyeChip’s strategy. For SkyeChip, we must have our own IP.
“Once you have your own IP, not only can you licence it, but you can also use it to build your own products.
“That creates differentiation and gives us a competitive edge in the silicon product business,” he said.
On whether the company has determined its foundry partner for the CSS, Fong said it is still not finalised.
“But I can give you a generic guide on how we position the fabrication part of our CSS-based products.
“For CSS-based products, which are very high-end CPUs, they need to be paired with very advanced process technology,” he said, adding that beyond process capability, ecosystem support and cost efficiency are also critical factors.
“We will look at how advanced the process technology is, how complete the ecosystem is in terms of available building blocks, and also the cost performance of the process nodes. These are the three main factors we consider,” he said.
The Penang-based IC design house’s listing will be considered the largest front-end semiconductor IPO in Asean.
SkyeChip’s listing saw strong institutional support with 22 cornerstone investors taking up close to 60% of the institutional offering and included the likes of the Employees Provident Fund Board, Lembaga Tabung Angkatan Tentera, Lembaga Tabung Haji, AHAM Asset Management, AIA, CMY Capital and Great Eastern Life Assurance (Malaysia).
The IPO will see 400 million new shares issued with no offer for sale, indicating that none of the existing shareholders are cashing out.
Of the 400 million shares, 264.7 million shares are allocated for institutional offering and the balance for retail investors.
The issuance is being priced at 44 times SkyeChip’s earnings for the financial year ended March 31, 2025 (FY25).
However, Maybank Investment Bank head of equity capital markets Raymond Chooi said in a media briefing yesterday that if SkyeChip’s earnings for the first seven months of FY26 are annualised, the offer price of 88 sen implies a price-to-earnings (PE) ratio of about 30 times.
Trident Analytics chief research officer Peter Lim Tze Cheng said SkyeChip is “reasonably priced”, looking at the company’s forward PE. He sees the group’s fair value at 30 to 35 times.
From an investment perspective, Lim said one of SkyeChip’s main attractions is that it is a pure chip designer, distinguishing it from other companies that are primarily chip design service providers.
A potential re-rating, Trident Analytics’ Lim said, could come from a shift in SkyeChip’s business model, noting that the company currently derives most of its revenue from one-off project based chip design work rather than recurring royalties.
“This would be a key re-rating driver and could bring it closer to global peers like Qualcomm,” he said.
“Currently, SkyeChip does not have the bargaining power for such arrangements, given its current scale and market position. However, as the company becomes more well-known and successful, it may gain the leverage it needs to shift to recurring nature,” he said.
SkyeChip’s revenue is currently derived mainly from lump-sum contracts for silicon IP and custom ASIC design, including outright sales for the right-of-use of its IP designs for silicon IPs, design and development work performed for custom ASICs, or based on confirmed purchase orders for the sales of custom ASIC products.
As such, revenue is largely non-recurring upon completion and delivery, and the company’s financial performance depends on its ability to continuously secure new contracts to replenish its order book.
As at March 31, 2026, the company has an unbilled order book of about RM130.3mil.
Upon full subscription, SkyeChip would be valued at RM397.1mil, placing its total market capitalisation at RM1.6bil.
