M31 Technology: Robust Foundry Demand, Operating Margin Expected to Recover in 2026

Hsinchu, Taiwan – August 6, 2025 – M31 Technology Corporation (M31), a global leader in silicon intellectual property (IP), held an investor conference today and announced consolidated revenue of NT$449 million for the second quarter of 2025. Despite the impact of the New Taiwan dollar’s appreciation, which significantly constrained revenue growth in NT$ terms, first-half consolidated revenue still reached NT$883 million, an increase of 14.5% year over year, demonstrating steady growth. However, the rapid appreciation of the New Taiwan dollar in the second quarter resulted in approximately NT$90 million in foreign exchange losses, turning a quarterly profit into a loss, and reducing first-half EPS by about NT$1.95, ending at -NT$0.51. On the expense side, although personnel costs have been effectively controlled, the significant increase in EDA licensing costs continued to weigh on profitability. With most long-term agreements with EDA vendors now in place and operational efficiency initiatives underway, R&D expenses are expected to stabilize, and the operating margin is anticipated to return to a healthy range by 2026.

In the first half of this year, strong demand from foundries drove steady overall business growth. This momentum was fueled by dual growth drivers from both advanced and mature process technologies: M31 deepened collaboration with Taiwan’s leading foundry and a major Korean foundry on advanced nodes, while Chinese foundries steadily expanded penetration in the 22nm/28nm nodes. At the same time, North America’s largest foundry actively launched new specialty process projects. These multi-regional, multi-process mass production platforms are expected to gradually translate into stable royalty income. M31 is also assisting two major advanced foundries in developing automotive-grade platforms, which are expected to be adopted by leading global EV manufacturers. On the fabless side, specification upgrades in consumer electronics slowed in the first half due to tariff uncertainties, but new project launches in the U.S. and China are expected to rebound in the second half. In particular, major U.S. semiconductor companies have successively initiated 2nm projects and expanded strategic alliances with North American leaders for high-speed interface IP below 5nm, becoming key growth drivers. Meanwhile, M31 continues to deepen collaboration with a leading Chinese EV manufacturer in the Advanced Driver Assistance Systems (ADAS) segment, with related projects expected to continue progressing in the second half. In terms of royalties, the second quarter saw a slight decline due to the revenue recognition schedules of overseas foundries. However, 12/16nm and 6nm platforms have entered small-scale trial production, with a ramp-up in advanced processes anticipated going forward. M31 CEO Scott Chang stated that this year’s key progress in advanced processes at foundries, along with the expanded adoption of 2nm IP by major North American semiconductor companies, fully affirms M31’s technology leadership. The company’s long-term commitment to advanced processes is steadily translating into mass production and commercial value. Looking ahead to the second half of the year, as chip design companies regain momentum, new advanced process projects below 5nm at foundries are expected to continue rolling out, supporting steady revenue growth. Chang added that the company has implemented multiple initiatives to optimize operational efficiency, and once the medium- to long-term benefits are realized, the operating profit margin is expected to return to a healthy level by 2026.