ADTechnology

ADTechnology is a semiconductor design house that sits between fabless chip designers and foundries, optimizing chip designs and managing the transition to mass production.

In 2020 the company exited the TSMC ecosystem in Taiwan and became a Design Solution Partner (DSP) for Samsung Foundry, a shift that broadened its base of domestic and overseas fabless customers.

Its business spans a service (development) segment covering SoC, platform and infrastructure design, and a product segment supplying mass-produced chips; as of the first quarter of 2026, services accounted for 87.46% of revenue versus 9.85% for products, reflecting continued heavy reliance on development revenue.

Since being named an Arm Total Design partner in 2023, the company has built Neoverse-based high-performance computing design capability for servers, AI and networking, and has recently expanded partnerships with Rebellions' NPU business, Siemens Industry Software, German fabless firm Ubitium, and US-based Kenyi Technologies.

Domestically it competes with Gaonchips and SemiFive within the Samsung Foundry design-house ecosystem, while overseas its business model overlaps with Taiwanese design houses such as GUC and Alchip, as well as large ASIC design players like Broadcom and Marvell.

The company is attempting to shift from passive design outsourcing toward proactively proposing chip architectures to customers, with its self-developed ADP620 server CPU platform serving as the flagship example. It positions its one-stop offering—spanning design through packaging and testing—as a core strength.

Its customer base is diversifying across domestic and overseas fabless and systems companies, but heavy dependence on specific large projects still drives significant quarter-to-quarter revenue swings.

On an annual basis, the company posted revenue of KRW 164.2bn, operating profit of KRW 4.40bn and owner net profit of KRW 5.62bn in 2022, before swinging to losses in 2023 (revenue down 39% to KRW 100.2bn, operating loss of KRW 17.4bn, net loss of KRW 16.0bn) and remaining in the red in 2024 (revenue KRW 106.5bn, operating loss KRW 17.0bn, net loss KRW 14.3bn).

In 2025, revenue grew 54.4% year-on-year to KRW 164.5bn, with operating profit of KRW 2.85bn and owner net profit of KRW 3.61bn, marking the first annual profit in three years, though the operating margin remained thin at 1.7%.

On a quarterly basis, 2Q25 posted an operating loss of KRW 1.02bn and a net loss of KRW 3.20bn, before turning profitable in 3Q25 with operating profit of KRW 2.67bn and net profit of KRW 2.93bn; 4Q25 revenue jumped to KRW 61.0bn with operating profit of KRW 2.76bn and net profit of KRW 5.52bn.

However, 1Q26 revenue fell to KRW 36.0bn with an operating loss of KRW 0.36bn, even as net profit stayed positive at KRW 0.36bn, while 2Q26 revenue rose to KRW 45.9bn but the operating loss widened to KRW 1.17bn and the net loss expanded sharply to KRW 6.54bn.

This uneven quarterly pattern has been attributed to a timing gap between progress-based revenue recognition and the recognition of IP purchase costs tied to large projects.

Over the trailing four quarters (3Q25–2Q26), cumulative owner net profit stood at roughly KRW 2.27bn, indicating that the absolute scale of profit remains modest even as the company has returned to positive territory.

Market researcher Infinity Research projects the global AI ASIC market will grow at a 35.9% compound annual rate from 2024, reaching USD 38.3bn in 2025 and USD 70.4bn in 2027. Design houses within the Samsung Foundry ecosystem are said to have entered a recovery phase as more projects move into mass production.

Samsung Foundry itself reportedly revised its business roadmap last year and has been focusing on yield improvement and order expansion to accelerate its own recovery.

However, the company's position within the foundry ecosystem remains closely tied to Samsung's process roadmap and yield-stabilization pace, meaning the speed of Samsung's 2nm process progress largely dictates how quickly design houses can ramp up earnings.

On the competitive front, brokerage commentary notes that Taiwanese design houses such as GUC and Alchip are seeing valuations rise as they signal large-scale mass production from the second half of 2026.

Domestically, peer design houses Gaonchips and SemiFive are also reported to be expecting earnings improvement this year, intensifying competition within the Samsung Foundry ecosystem.

The company has set a mid-to-long-term target of KRW 1.5 trillion in annual revenue by 2030, with its self-developed 'ADP620' server CPU platform—combining Arm's Neoverse V3 cores with Samsung's 2nm process—positioned as the key growth driver.

Tape-out for ADP620 is scheduled for the second quarter of 2027, and in May the company unveiled a 2nm-based clock speed of up to 3.695GHz at Samsung's SAFE Forum 2026.

It has signed a memorandum of understanding with US-based AI-RAN company Kenyi Technologies to pursue the platform's first real-world application, and reports indicate it is also exploring integrating Rebellions' NPU in chiplet form.

In a May report, Shinhan Investment noted that the share of high-value-added AI/HPC projects rose from 26% in 2024 to 73% in 2025, and that the turnkey project share increased from 60% to 81% over the same period, while projecting the mass-production customer pipeline to grow from one in 2026 to seven in 2027 and twelve in 2028.

The company has also stated plans to ramp up shipments to a telecom customer's 14nm chip in the second half of the year. Funding for this expansion strategy came from a KRW 130bn fourth convertible bond issued in April, with all proceeds earmarked for ADP620-related research and development spending.

Analysts caution, however, that this entire scenario depends on Samsung Foundry stabilizing 2nm yields and meeting its mass-production timeline.