SkyeChip Berhad - ASEAN’s only pure-play semiconductor IP bet
Thu, 25-Jun-2026 07:35 am
by Research Team • Apex Research

Counter

SKYECHIP (5357)

Target Price (RM)

4.67

Recommendation

Buy

  • SKYECHIP is the only profitable, pure-play semiconductor IP company listed across ASEAN, designing and licensing silicon-proven memory interface IP (HBM3/HBM3E, DDR5, LPDDR5), NoC IP, and UCIe D2D interface IP to AI chip designers globally, alongside custom ASIC design services for IoT and AI inference.

  • We project FY26-FY29F core earnings to grow at a c.48% CAGR, driven by the ramp of HBM3E/HBM4 IP licensing across Chinese, American, and Korean AI chip customers, geographic diversification (US revenue surging from 5.7% to 23.1% of Group in FY26 with South Korea entering as a new market), and operating leverage as gross margin expands from 45.1% to 50.9% in FY29F on the IP licensing flywheel.

  • We initiate coverage with a BUY rating and a TP of RM4.84, based on 78.8x mid-FY28F Core EPS of 6.1 sen (a 15% premium to the 68.5x peer average FY27 forward P/E). We like SKYECHIP for its: (i) scalable IP licensing model with near-zero marginal cost per additional licence, (ii) silicon-proven HBM3E credentials at 4nm that only a handful of companies globally can match, and (iii) ASEAN scarcity premium with no comparable listed peer across the region.

     

    Key Investment Highlights

Only commercialised HBM3/HBM3E IP house in ASEAN. SKYECHIP achieved first-time silicon success for its HBM3E interface IP at 8,800 Mbps on Samsung SF4X (4nm), making it one of very few companies globally with commercially deployed HBM3E memory interface IP at an advanced process node. In a market where customers will not risk unproven interfaces on chips costing USD50-100m to tape out, silicon-proven status is the defining and hardest-to-replicate moat. The IP portfolio spans the full memory interface stack (DDR5, LPDDR5, HBM3, HBM3E, with HBM4 and LPDDR6 in development), NoC IP with the proprietary RAPTuner EDA tool, and UCIe-compliant D2D interface IP, giving customers single-vendor coverage that reduces integration risk and increases switching costs. The HBM IP market is projected to grow from USD201m (2024) to USD513m (2032) at a 12.4% CAGR, and every successive generation of AI chip uses more HBM with higher bandwidth, with NVIDIA's roadmap alone representing a 6.4x increase in HBM per chip from H100 to Rubin Ultra.

 

Scalable IP licensing flywheel with accelerating operating leverage. The business model is fundamentally different from most semiconductor companies: SKYECHIP creates design blueprints for memory interfaces and on-chip interconnects and licenses these designs to customers who integrate them into their own chips. Once the IP is silicon-proven, each subsequent licence generates revenue with near-zero marginal cost. This flywheel is now demonstrably turning as revenue per engineer has grown from RM347k (FY24) to RM425k (FY26), and we forecast it reaching RM603k+ by FY31F as the licensable portfolio broadens and each IP block is licensed to progressively more customers. Gross margin expanded from 42.2% (FY25) to 45.1% (FY26), with Q4 FY26 printing 64.0% in an IP-heavy quarter, and we forecast continued expansion toward 54.7% by FY31F. FY26 results confirmed the trajectory: revenue RM155.0m (+29.7% YoY), PAT RM48.5m (+35.0% YoY), customer base nearly doubling from 14 to 26, and US revenue surging to 23.1% of Group revenue from 5.7% in FPE Oct 2025.

 

Geographic diversification validates IP quality beyond China. The most significant development in FY26 was the emergence of the US as 23.1% of Group revenue (RM35.8m) and South Korea as a new market at 1.0% (RM1.5m), reducing China/Taiwan concentration from 90.6% (FPE Oct 2025) to 73.8% in FY26. This is not merely a diversification story but a product quality certification: US AI chip startups are sophisticated, well-funded buyers with access to all global IP providers including Synopsys, Cadence, and Rambus at full scale, and the fact that they are choosing SkyeChip's interface IP without any geopolitical pressure to do so is the strongest possible independent validation of its technical credibility. Q4FY26 alone saw US revenue of RM28.9m (49% of Q4 revenue), a single-quarter US run-rate that annualises to RM115m+. South Korea's entry via the Samsung Foundry CONNECT listing (February 2026) opens the K-Nvidia ecosystem where Rebellions (USD850m funded, KOSPI IPO targeting Q3 2026) and FuriosaAI (KRW3 trillion valuation) are building chips using HBM3E and UCIe, both directly within SkyeChip's IP portfolio.

 

Unpriced optionality from Arm CSS and Samsung Foundry CONNECT. On 14 April 2026, SkyeChip received conditional approval for access to both the Arm Flexible Access (AFA) and Arm Compute Subsystem (CSS) platforms, positioning it to potentially develop high-performance Arm-based CPU and AI platforms with RM82.0m of IPO proceeds ring-fenced for this purpose. We have not included any AFA or CSS revenue in our base case forecasts, but the incremental opportunity could reach RM14-21m per annum from FY28-FY29F onwards if 2-3 Arm-based contracts are secured, representing 5-8% upside to our FY28F revenue estimate. Separately, SkyeChip's UCIe-AP 32G PHY IP was listed on Samsung Foundry CONNECT in February 2026, enabling every Samsung Foundry customer globally to discover and engage with SkyeChip at zero incremental cost, a channel that appears to have generated its first Korean customer conversions within weeks of going live.

 

We initiate coverage on SKYECHIP with a BUY rating and a target price of RM4.84, based on 78.8x mid-FY28F Core EPS of 6.1 sen (a 15% premium to the 68.5x peer average FY27 forward P/E). We like SKYECHIP for its: (i) scalable IP licensing model with a FY26-FY29F core earnings CAGR of c.48%, (ii) silicon-proven HBM3E credentials at 4nm and the broadest memory IP portfolio in its size class, (iii) ASEAN scarcity premium as the only profitable pure-play semiconductor IP company listed on Bursa Malaysia, and (iv) a valuation of 58.2x FY27 P/E and 42.6x FY28 P/E at the current price of RM3.02, a 15% and 8% discount to the peer simple averages of 68.5x and 46.3x respectively despite offering materially superior growth, which caps downside risk while offering substantial scope for re-rating as SkyeChip continues to demonstrate its ability to win customers on merit in the US and Korea, de-risk its China geographic concentration, and unlock new growth levers from Arm CSS and next-generation IP (HBM4, LPDDR6, automotive NoC). Our 78.8x target multiple sits below Arm (185.1x FY27) and GUC (99.5x), but above M31 (64.9x), Faraday (56.4x), and Rambus (47.5x), reflecting SkyeChip's superior growth profile and ASEAN scarcity premium while acknowledging the China concentration risk (62.6% of FY26 revenue), Pioneer Status renewal uncertainty, and the early-stage listed track record that will be de-risked through execution over time.

Read more details in:

Disclaimer

The report is for internal and private circulation only and shall not be reproduced either in part or otherwise without the prior written consent of Apex Securities Berhad. The opinions and information contained herein are based on available data believed to be reliable. It is not to be construed as an offer, invitation or solicitation to buy or sell the securities covered by this report.

Opinions, estimates and projections in this report constitute the current judgment of the author. They do not necessarily reflect the opinion of Apex Securities Berhad and are subject to change without notice. Apex Securities Berhad has no obligation to update, modify or amend this report or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate.

Apex Securities Berhad does not warrant the accuracy of anything stated herein in any manner whatsoever and no reliance upon such statement by anyone shall give rise to any claim whatsoever against Apex Securities Berhad. Apex Securities Berhad may from time to time have an interest in the company mentioned by this report. This report may not be reproduced, copied or circulated without the prior written approval of Apex Securities Berhad.

Market Mover
Settlement Rates
Currency Buy Rates (RM) Sell Rates (RM)
USD 4.104806 4.133664
EUR 4.677231 4.682021
CNY 0.605124 0.605753
HKD 0.523500 0.527176
SGD 3.165238 3.187561