KUALA LUMPUR (May 5): Tradeview assigned a 57% upside to SkyeChip Bhd's IPO price of 88 sen, citing its strategic positioning in forced memory intellectual property (IP) upgrade cycles that could drive high-visibility recurring revenue through the financial year ending March 31, 2028 (FY2028).
"Backed by 16% of IPO proceeds for new generation IPs and access to advanced foundry tools, the group is scaling its proprietary, patentable silicon IP, supporting recurring licensing revenue," it said in a note on Tuesday.
Memory IP refers to pre-designed, reusable circuits for data storage and management — such as DRAM, SRAM, Flash, and ROM — licensed from vendors for integration into system-on-chips (SoCs).
Tradeview, which recommends a 'subscribe' rating with a target price of RM1.38, also highlighted “geopolitical tailwinds as a Malaysia-domiciled neutral alternative capturing Chinese semiconductors”.
The house valued SkyeChip at 42 times FY2027 foreward price/earnings (P/E) ratio, in line with foreign IP peers and two standard deviations below ARM Holdings plc, its "most relevant benchmark" given ARM’s pure-play IP licensing model.
"The 42 times multiple represents a 31% premium to domestic indirect peers, which we believe is justified by: SkyeChip’s proprietary patented silicon IP portfolio versus design service providers, strategic access to foundry platforms enabling global customer reach, and superior profitability with 30.1% net margin in FY2025."
The research firm noted that the silicon IP portfolio benefits from a “multi-year forced upgrade cycle”, with memory IP surging 530% from FY2023 to FY2025, with its customer base expanding from just four in FY2023 to 18 as of October 2025.
"[The 18 existing customers] represent a captive base that must re-license to upgrade regardless of new customer wins."
The company holds key industry standards organisation memberships with JEDEC, UCIe, and PCI-SIG, allowing IP design before final standards are released.
Further, its 3nm process design kits (PDK) access from multiple foundries creates a “binary technical barrier” over competitors.
"[The] 3nm PDK access from multiple foundries creates binary technical barriers," it added.
Tradeview noted that the group has 36 registered patents across Malaysia, China and the US, with 77 pending applications.
Additionally, the group is leveraging software and firmware expertise to offer EDA tools licensing that streamlines customer integration with silicon IP.
The custom ASIC segment provides a “one-stop solution” consolidating IP sourcing, design, and manufacturing coordination. SkyeChip has secured a 15-year custom ASIC contract with 'Customer D', reflecting long-term strategic partnerships.
The group also applied for ARM Compute Subsystem (CSS) access, a catalyst expected from 2028 onwards.
On advanced packaging, SkyeChip has built a “five-year IP stack” enabling chiplet architectures, though no revenue is modelled yet.
The IPO proceeds allocate 44.1% to AI silicon research and development (R&D) and 16.0% to next-generation IP development.
SkyeChip posted a net profit of RM35.9 million in FY2025, compared with RM33.7 million in FY2024.
Tradeview projects a net profit of RM47.4 million and RM50.6 million for FY2026 and FY2027, respectively, translating into a 31.9% core earnings per share growth for Skyechip in FY2026, followed by 24.4% in FY2027. (see table)
Key risks include customer concentration, which makes top three at 60.5% of Skyechip's FY2025 revenue, and intense competition from Synopsys, Cadence and Rambus.
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