Montage Technology's net profit increased by 72% in the first half of the year, with AI demand driving record-high performance in interconnect chips | Financial Report

Montage Technology's net profit increased by 72% in the first half of the year, with AI demand driving record-high performance in interconnect chips | Financial Report

Benefiting from the continued expansion of investment in AI infrastructure, Montage Technology achieved a significant increase in profits in the first half of 2026, with many core financial indicators setting new historical records, and launched a semi-annual cash dividend plan.

According to Montage Technology's 2026 semi-annual report, the company achieved operating revenue of RMB 3.335 billion in the first half of the year, a year-on-year increase of 26.7%; net profit attributable to shareholders of the listed company was RMB 1.997 billion, a year-on-year increase of 72.3%. Net profit after deducting non-recurring gains and losses was RMB 1.322 billion, a year-on-year increase of 21.2%.

In terms of a single quarter, the company's operating revenue in the second quarter of 2026 was RMB 1.875 billion, a 28.3% increase quarter-on-quarter, and net profit attributable to the parent company was RMB 1.15 billion, a 35.7% increase quarter-on-quarter. Both revenue and net profit set new quarterly records.

The net profit growth rate significantly outpaced the revenue growth rate, primarily driven by three factors: product structure upgrades boosted the gross profit margin of interconnect chips by approximately 5 percentage points year-on-year to 69.3%; investment income and fair value changes totaled RMB 682 million, a substantial year-on-year increase; and the RMB 456 million related gain from the sale of XConn's equity during the period. It is worth noting that the appreciation of the RMB against the US dollar resulted in exchange losses of RMB 174 million, which negatively impacted the reporting period's profits. The company plans to distribute a cash dividend of RMB 2 per 10 shares (inclusive of tax), totaling approximately RMB 242 million.

The memory interconnect business maintains its leading position, and the DDR5 iteration leads the industry.

Memory interconnect chips are a core pillar of Montage Technology's business. With a leading global market share of approximately 36.8% (according to Frost & Sullivan data in 2024), the company continues to consolidate its competitive advantage in the DDR5 generation.

During the reporting period, the combined shipment share of the company's third and fourth generation DDR5 RCD chips exceeded 50%, and the fifth generation began mass production, maintaining a leading position in product iteration within the industry. In June 2026, the company successfully sampled its sixth generation DDR5 RCD chips, supporting data rates up to 9200MT/s, to customers, further highlighting its technological accumulation.

Regarding high-bandwidth memory, the company is one of only two global suppliers of first-generation DDR5 MRCD/MDB chips, and its second-generation products (supporting speeds of 12800MT/s) have been trialed on a large scale during the reporting period. Furthermore, CKD chips suitable for high-speed memory modules in PCs continue to ship, and a new generation of products supporting 9200MT/s speeds has been launched in 2025. The increasing penetration rate of AI PCs is expected to further drive demand for this product.

PCIe/CXL interconnect product portfolio continues to expand, with demand for AI servers driving shipment growth.

PCIe Retimer chips are one of the company's fastest-growing emerging businesses. Shipments of these chips increased significantly during the reporting period, and the company is now one of the two major global suppliers of PCIe 5.0 Retimer chips, with a global market share of approximately 10.9% (2024). A typical 8-GPU AI server uses approximately 8 to 24 PCIe Retimers, and the continued increase in AI server shipments directly drives the upward trend in demand for this product.

In January 2026, the company released PCIe 6.x/CXL 3.x Retimer chips and AEC solutions; the engineering sample tape-out of the PCIe 7.0 Retimer chip is expected to be completed within this year; the development of the PCIe Switch chip is progressing simultaneously, and the engineering sample tape-out is also planned to be completed within the year. After its implementation, it will form product synergy with the PCIe Retimer chip.

In the CXL interconnect field, the company took the lead in trial production of CXL3.2 MXC chips in July 2026 and successfully adopted them in the next-generation CXL products of major memory module manufacturers such as Samsung Electronics and SK Hynix. At present, mainstream cloud service providers are launching test prototypes equipped with CXL memory pooling solutions, accelerating the commercialization process.

Continued investment in R&D and expansion of capital footprint through H-share listing

The company continued to increase its R&D investment. During the reporting period, R&D expenses reached RMB 453 million, a year-on-year increase of 26.9%, maintaining at 13.6% of revenue. As of the end of June 2026, the company had 604 R&D personnel, accounting for approximately 74% of the total workforce, of whom approximately 65% held master's degrees or higher.

Key R&D achievements during the reporting period included: successful sampling of the DDR5 sixth-generation RCD chip; completion of engineering sample tape-out for the third-generation MRCD/MDB chip; initiation of pre-research on the first-generation DDR6 memory interconnect product; and completion of mass production version tape-out for the PCIe 6.x/CXL 3.x Retimer and CXL 3.x MXC chips. Engineering sample tape-out for the high-speed Ethernet PHY Retimer chip was also listed as a key R&D project for the second half of the year.

In terms of capital, the company completed its H-share listing on the Main Board of the Hong Kong Stock Exchange in February 2026, with the stock code 6809.HK. The funds raised significantly increased the company's asset size—total assets reached RMB 23.18 billion at the end of the period, an increase of 68.6% compared to the end of the previous year; cash and cash equivalents amounted to RMB 15.11 billion, and the debt-to-equity ratio was only 7.5%, demonstrating a sound financial structure. During the same period, the company was included in the FTSE China A50 Index for the first time, increasing its international capital attention.

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