PETALING JAYA: SkyeChip Bhd, which is mainly involved in integrated circuit (IC) design, has a growth story which remains intact, but this year is more about expanding capabilities than delivering the next step-up in earnings.
Hong Leong Investment Bank (HLIB) Research said this in a report, adding that it agreed with the market’s high expectations for SkyeChip, with the stock currently trading at around 64 times mid-2028 price to earnings.
“But (we) believe it is important to set out what investors should realistically expect in the near term. IC design carries long development cycles, meaning design wins announced today typically reflect customer engagements and work initiated well before that,” it told clients.
Since its May listing, SkyeChip has bolstered its balance sheet and raised its corporate profile, giving management greater capacity to pursue new opportunities, it noted.
“We see these as laying the groundwork for results that are only likely to materialise over the next one to two years. Hence, we believe 2026 is more of a capability expansion year, with more tangible progress towards (or beyond) management’s 30% revenue compounded annual growth rate, and 30% net margin targets more likely to emerge in 2027 to 2028,” it said.
HLIB Research said as high bandwidth memory four transitions the base die to an advanced logic process from 2026, it sees increasing scope for customisation, creating more opportunities for logic design houses such as SkyeChip.
It said the outlook for central processing unit (CPU) demand has turned much stronger, underpinned by the rise of agentic artificial intelligence (AI), which is moving towards mainstream consumer adoption following the launch of Meta’s personal AI agent, Muse.
Each Muse agent runs on its own dedicated virtual machine, a CPU-intensive architecture. “As agentic workloads proliferate, we believe this will drive more players towards customised CPUs, widening SkyeChip’s pool of potential partners/customers,” it added.
It also noted that at last month’s briefing, management said it was looking to broaden its intellectual property (IP) portfolio, either by acquiring an external team or building the capability inhouse.
“We believe Serialiser/Deserialiser or SerDes is a likely candidate, given its strategic fit with SkyeChip’s existing IP portfolio. SerDes serialises and deserialises digital data for high-speed chip-to-chip communication, and would complement its existing memory interface,” it said.
This could allow SkyeChip to offer a broader interface IP suite spanning on-chip, dieto-die and off-chip connectivity, all key building blocks for modern chips, it added.
HLIB Research said it has maintained a “hold” call on the counter with an unchanged RM2.85 target price, based on 61 times mid-2028 price earnings.
At last look, the stock was at RM3.07 apiece.
