Gaonchips

Founded in 2012, Gaonchips is a semiconductor design house and an official Design Solution Partner (DSP) of Samsung Foundry. Its role is to optimize fabless customers' chip designs for Samsung's process nodes and turn them into mass-producible chips.

Rather than simple design outsourcing, the company offers turnkey project capabilities spanning RTL design, verification, packaging, testing, and mass production. As of the third quarter of 2024, revenue mix was weighted toward AI/HPC (high-performance computing) at 60% and automotive semiconductors at 21%.

On process technology, revenue from sub-3nm products rose from 0% in 2023 to about 25% in 2024, while sub-5nm revenue rose from 11% to 52% over the same period.

In automotive, the company collaborates with Telechips, LX Semicon, and Nextchip, while in AI semiconductors it is running 2nm projects with Japan's Preferred Networks (PFN) and domestic fabless firm DeepX.

Domestically, competitors include ADTechnology, SemiFive, and COASIA, while overseas, Alchip and Alphawave belong to TSMC's Value Chain Alliance (VCA). Gaonchips is thus in the process of building both a dual automotive/AI-HPC portfolio and leading-edge process references.

Gaonchips' 2025 consolidated revenue fell sharply to KRW 68.5 billion from KRW 96.5 billion in 2024, and the operating loss reached KRW 16.7 billion, the largest since listing. Net loss attributable to owners also totaled KRW 14.4 billion, a complete reversal from the KRW 7.5 billion net profit recorded in 2024.

The operating margin dropped to -24.4%, worsening further from a gradual decline seen in 2022-2024 (9.0%, 6.8%, and 3.7%, respectively). The debt ratio also jumped from 62.5% in 2024 to 191.3% in 2025, and operating cash flow turned negative at KRW -0.8 billion, reversing from KRW 10.8 billion in 2024.

On a quarterly basis, operating losses widened consecutively in the second quarter of 2025 (KRW -4.7 billion) and third quarter (KRW -7.3 billion), before revenue surged to KRW 33.1 billion in the fourth quarter, delivering an operating profit of KRW 1.7 billion and net profit of KRW 1.3 billion.

However, the first quarter of 2026 slipped back into loss with an operating loss of KRW 3.9 billion despite revenue of KRW 20.6 billion, before the second quarter posted a small operating profit of KRW 0.3 billion and net profit of KRW 0.7 billion on revenue of KRW 21.3 billion.

The company attributes this volatility to key personnel being concentrated on leading-edge process projects and large development tasks, which delayed some schedules. As a result, the company remained in a net loss position attributable to owners even on a trailing four-quarter basis (Q3 2025-Q2 2026).

Samsung Foundry is accelerating its expansion of 2nm Gate-All-Around (GAA) process technology, and Tesla's next-generation AI chip 'AI5' recently completed tape-out, preparing for 2nm process operation at the Taylor, Texas facility.

Tesla previously signed a semiconductor supply contract with Samsung worth roughly KRW 22.7 trillion, and securing such a large customer has the potential to expand orders across the broader Samsung Foundry ecosystem.

As demand for leading-edge processes grows, the role of Design Solution Partners (DSPs) connecting fabless firms and foundries becomes more important, and Gaonchips is one of the domestic Samsung Foundry DSPs participating in 2nm projects.

However, competition remains intense, with domestic rivals including ADTechnology, SemiFive, and COASIA, and Alchip and Alphawave positioned within TSMC's value chain.

The design house industry is being reshaped as it moves toward ultra-fine processes requiring EUV lithography and high-end design know-how, a structure in which only a small number of firms can secure leading-edge process references.

In an environment where demand for both AI accelerators and autonomous-vehicle semiconductors is rising simultaneously, design houses covering both areas may hold a relatively favorable position, though lengthy qualification processes and elevated risk should also be considered.

Research firm Growth Research reported on April 30, 2026 that Gaonchips had entered a phase of expanding orders centered on leading-edge processes based on its collaboration with Samsung Foundry, forecasting an annual earnings turnaround backed by an order backlog of roughly KRW 100 billion.

The research projected annual revenue of KRW 107.8 billion and operating profit of KRW 8.7 billion, representing a turnaround from the prior year's operating loss of KRW 16.7 billion.

In June 2026, the 2nm/2.5D packaging-based AI accelerator project with Japan's Preferred Networks (PFN) reportedly entered the prototype production stage, with a company representative noting that as a turnkey supply arrangement, further verification and mass-production setup steps remain.

Gaonchips is also supporting the design of DeepX's second-generation AI chip 'DX-M2', which is scheduled for mass production from 2027 based on Samsung Foundry's 2nm process.

Following Japan in 2022 and the United States in 2023, the company established a new subsidiary in Shanghai, China in February 2026, expanding to three overseas bases, and reportedly secured an additional new customer in Japan recently.

One semiconductor industry expert suggested the company could enter a phase where its order backlog converts into revenue starting in 2026, changing its overall scale.

However, all such forecasts assume project schedules proceed as planned, leaving room for the actual timing of mass-production revenue recognition to shift.