PETALING JAYA: SkyeChip Bhd is expected to deliver strong growth in the coming years as rising demand for AI, high-performance computing (HPC) and advanced memory technologies drives greater semiconductor design complexity and boosts contract opportunities.
Its earnings are also projected to grow as contract wins and improved operational productivity lift profitability over the next three years.
Maybank Investment Bank Research (Maybank IB) expects SkyeChip’s core net profit to grow at a 24% compound annual growth rate (CAGR) over three years, while revenue is forecast to expand at a 25% CAGR from financial year 2026 (FY26) to FY29.
It initiated coverage on the integrated circuit (IC) design company with a “hold” rating and target price of RM3.28, based on 79 times calendar year 2027 estimated price-earnings (P/E).
“We believe SkyeChip is well positioned to benefit from rising semiconductor design complexity across AI, HPC, and advanced memory interfaces,” Maybank IB said in a note to clients.
The research house expects silicon products to be the main growth driver, with revenue forecast to grow at a 59% three-year CAGR, significantly ahead of the 10% CAGR expected for silicon intellectual property (IP).
This reflects SkyeChip’s “strategic positioning into becoming a custom application-specific integrated circuit (Asic) solutions provider rather than just a memory IP specialist”, it added.
Silicon IP growth is expected to come from existing and new customers purchasing or repurchasing IP to meet new technology standards, alongside the launch of new portfolios covering 2.5D/3D and automotive-related IP.
As of the first quarter (1Q) of its financial year ending March 31, 2027 (FY27), SkyeChip’s order book had risen to RM150mil from RM130mil in 4Q26, with the bulk expected to be recognised in FY27.
The company’s margins, however, have faced pressure since FY24 as higher fixed costs and increased headcount weighed on operating leverage.
“We expect core net margins to stabilise at about 31% from FY27 onwards, supported by improving economies of scale and a low effective tax rate environment,” Maybank IB said.
It noted that SkyeChip’s Malaysia pioneer status expired in April 2026, although management is pursuing a renewal by 2027.
Meanwhile, the group is expected to maintain a net cash position, with Maybank IB projecting SkyeChip’s RM352mil in gross initial public offering (IPO) proceeds lifting cash to RM452mil in FY27. Cash is forecast to remain at RM450mil to RM500mil through FY29, according to the brokerage.
“SkyeChip’s capital expenditure (capex) plans usually include purchasing plant and equipment items, and intangible assets, but more importantly on tools for masks sets when preparing chips for mass production,” it said.
“We estimate capex intensity at 25% to 35% of revenue over FY27 to FY29, with a notable step-up in FY28, driven by anticipated mask set expenditures for a sizeable project that we expect to push down free cash flow in that year,” it added.
It noted that the stock currently trades at 74 times 2027 P/E, a discount to its weighted average peer P/E of 105 times, reflecting its smaller scale and shorter listing track record.
