Photograph by Adi Goldstein
Chip maker
reported record bookings and a major new Big Tech client on Monday, a month after the group’s initial public offering disappointed investors in London.
Shares in Alphawave climbed 2.5% following the trading update, bringing the stock to around 320 pence ($4.51)—high for this month but still well below the company’s IPO price of 410 pence.
The back story. Founded in 2017, Alphawave is a Canadian semiconductor developer with a focus on efficient, high-speed and high-volume data connectivity. It builds chips to handle the exponential growth of data processing, especially in 5G wireless infrastructure.
Similar to Arm—the Cambridge, U.K. chip developer sold to graphics microchip maker
last year, pending regulatory approval—Alphawave’s business model relies on licensing its intellectual property to clients. Alphawave counts semiconductor giants TSMC and
among its partners, as well as European industrial group
which builds high-tech factories.
The group made the rare decision to go public on the other side of the Atlantic in May, choosing the
over local options such as the Nasdaq or Toronto Stock Exchange. While analysts noted that the IPO was well-timed amid a global shortage of semiconductors, shares in the group fell more than 20% on their debut as the company raised around £360 million ($508 million).
Also:Chip Maker Alphawave Tumbles on London Debut After Raising $1.2 Billion in IPO
What’s new. Alphawave said on Monday that it had seen a record $190 million in bookings in the first half of 2021 so far, after $82 million in bookings in the first quarter. Of the $190 million, the company estimated that $15 million were from royalties, which are fees associated with the sale or use of chips made using the company’s design. With the group recording bookings of $75 million across all of 2020, the first half of 2021 so far represents an acceleration of sales momentum.
The group said that a rise in bookings came as it won multiple design bids with new and existing clients amid strong demand for its core offerings in 5G wireless communication solutions.
Tony Pialis, the company’s president and chief executive, also said that Alphawave was selected to provide solutions for “one of the largest hyperscaler companies in the world.” Hyperscalers provide cloud and other internet services on a large scale, and include Big Tech groups such as
and
“The Group is continuing to scale and grow rapidly as it solves the most difficult connectivity challenges for the most technically sophisticated companies in the world,” said
John Lofton Holt,
the group’s executive chair.
Plus:London to Relax Listing Rules to Attract Tech IPOs and Blank-Check Companies. What That Means.
Looking ahead. Alphawave’s trading update on Monday shows that momentum at the chip maker is picking up, and seeing investors react in kind—lifting the stock price—is a reassuring sign after the lackluster IPO.
While the exact identity of the company’s new hyperscaler client remains undisclosed, a vote of confidence from a client likely to be a key player in Big Tech is another endorsement for the group.
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