Montage Technology reports surging AI chip sales as South Korean prosecutors raid office

Montage Technology forecasts stronger first-half profit as AI demand lifts chip sales and discloses Korean prosecutors' search

China-based Montage Technology said its first-half results are expected to rise sharply, underscoring continued demand for AI-linked memory and interconnect chips that matter to data centers and device makers worldwide. The company also disclosed a regulatory search in South Korea, adding an overhang that global investors will be watching closely. Montage Technology said it expects revenue for the first half of 2026 to reach about CNY3.335 billion (approx. US$492.01 million), up 26.6% from a year earlier, while net profit attributable to shareholders is forecast at CNY1.9 billion to CNY2.1 billion, up 63.9% to 81.2%, according to a voluntary earnings preview released on Friday. The company said net profit excluding non-recurring items is expected to be CNY1.25 billion to CNY1.45 billion, up 14.5% to 32.9% year-over-year. After stripping out share-based payment expenses, it expects attributable net profit of CNY2.08 billion to CNY2.28 billion, up 56.1% to 71.1%. Montage said the improvement was driven by the trend in the artificial intelligence (AI) industry and strong market demand. It said shipments of its DDR5 RCD chips increased significantly as DDR5 adoption rose and product generations continued to advance, with third- and fourth-generation RCD chips accounting for a larger share of shipments. Revenue from its interconnect chip line, including MRCD/MDB, PCIe Retimer, CKD, and CXL MXC products, climbed markedly, reaching about CNY3.111 billion in the first half, up 26.4% from a year earlier. Second-quarter interconnect chip revenue was about CNY1.694 billion, up 28.2% year-over-year, and 19.5% from the prior quarter. The company said higher sales, gross profit, investment income, and fair-value gains all contributed to the stronger profit outlook. A certified public accountant has not audited the figures. Montage also said South Korea's Seoul Central District Prosecutors' Office, Fair Trade Investigation Division, conducted an on-site search and evidence collection at its South Korea office on July 15 over a possible antitrust-related matter. The company said it is cooperating fully and that no directors or employees have been accused of wrongdoing so far. The company said the investigation is still in progress and that the timing and outcome cannot be predicted. It urged investors to note the risks and said it would update disclosures as required. Article edited by Jack Wu

AI Chip Maker Montage Extends Losses After South Korean Raid

Montage Technology extended losses, after the Chinese artificial-intelligence chip maker confirmed that South Korean prosecutors raided its office over a possible violation of competition laws. The company's Hong Kong-listed shares were down 9.55% in early afternoon trading, after plunging 23% Thursday following a South Korean media report on the raid. Montage's Shanghai-listed shares shed 9.6% after falling 16% a day earlier. South Korean authorities, which suspect Montage of engaging in price-fixing for semiconductor components, raided the company's Korean office on Wednesday, local media reported Thursday. South Korea accounted for more than half of Montage's revenue in 2025. The company confirmed the raid in a filing to Hong Kong's stock exchange early Friday. It said that it has been cooperating with authorities, none of its employees has been charged with any wrongdoing, and its operations weren't affected. Shanghai-based Montage, which was founded in 2004, specializes in memory interface chips that help AI computers speed up data transfers between processors and memory chips. The broad chip-stock selloff in Asia on Friday amid investor anxiety over high levels of AI investment also weighed on Montage's shares. Analysts have identified Montage as one of the few Chinese companies that are direct beneficiaries of global AI capital spending with a global customer base. In a move to shore up investors' confidence, Montage gave an upbeat earnings forecast and disclosed plans to buy back shares. It said it expects first-half net profit to rise as much as 81% from a year earlier, forecasting net profit of between 1.9 billion yuan and 2.1 billion yuan, equivalent to $280.5 million and $310.0 million. Montage's chairman proposed buying back between 300 million yuan and 600 million yuan of the company's onshore stock using the company's funds. Citi analysts reckon that while the continuing investigation could cause further share-price volatility, its strong guidance and share repurchase plan are likely to help stabilize the stock.