AI Server Market Demand Robust, Montage Technology's 2025 Revenue Grows 49.9%, Net Profit Rises 58.4% | Earnings Insights

Montage Technology, a global leader in interconnect chip design, has delivered a strong annual performance and completed its Hong Kong listing, opening a new channel for international financing.

Montage Technology achieved operating revenue of 5.456 billion yuan in 2025, a year-on-year increase of 49.9%. Net profit attributable to shareholders of the listed company was 2.236 billion yuan, a year-on-year increase of 58.4%. Revenue, net profit, and cash flow from operating activities all reached ATH (All-Time Highs) for the company.

During the reporting period, the company completed preparations for its H-share issuance and was listed on the Main Board of the Stock Exchange of Hong Kong Limited in February 2026, establishing an A+H dual capital platform. The H-share global offering was met with active subscription from international capital. Cornerstone investors accounted for 50% of the base issuance size, with over 500 international placement orders totaling over $30 billion, covering more than 60 times the actual allocation to anchor investors.

In terms of shareholder returns, the company plans to distribute a cash dividend of 472 million yuan for the 2025 fiscal year (the proposed annual distribution is subject to shareholder approval). Combined with interim dividends and share repurchases, total cash dividends and repurchases for the full year amounted to approximately 1.119 billion yuan, representing 50.07% of the net profit attributable to the parent company.

DDR5 Penetration Accelerates, Leading in Memory Interconnects

Benefiting from strong demand in the AI server market, DDR5 penetration in the server segment has increased rapidly. Montage Technology's interconnect chip product line achieved sales revenue of 5.139 billion yuan, a year-on-year increase of 53.4%. The gross profit margin for this product line increased by 2.91 percentage points year-on-year to 65.57%.

During the reporting period, the company's DDR5 RCD chip shipments increased significantly, with third-generation products achieving mass shipment, fourth-generation products (supporting 7200MT/s) successfully entering mass production, and fifth-generation products (supporting 8000MT/s) completing R&D of the mass-production version. In the second half of 2025, sales revenue from third-generation RCD chips surpassed that of the second-generation products, maintaining industry leadership in the generational transition process.

In the server high-bandwidth memory module MRDIMM field, Montage Technology is one of only two global suppliers of first-generation MRCD/MDB chips. The company launched its second-generation MRCD/MDB chips in January 2025, supporting speeds up to 12800MT/s, a 45% increase from the first generation. Shipments of second-generation products increased significantly starting from the fourth quarter.

PC-side CKD chips also saw the launch of new-generation products supporting 9200MT/s during the reporting period, with industry penetration further increasing and shipment volume growing rapidly.

According to Frost & Sullivan data, in 2024, the top three companies in the global memory interconnect chip market collectively held a 93.4% market share, with Montage Technology ranking first globally at 36.8%.

PCIe/CXL Interconnect Footprint Expansion, AI Server Demand Directly Drives Shipments

PCIe Retimer chips have become crucial high-speed interconnect components for AI servers. For a typical AI server configured with 8 GPUs, 8 to 16 PCIe Retimer chips are usually required, with some domestic AI servers using as many as 24 chips.

The company's PCIe Retimer chip shipments have grown rapidly since 2024. According to Frost & Sullivan data, in 2024, the company ranked second in the global PCIe Retimer chip market with a market share of approximately 10.9%.

In January 2025, the company launched PCIe 6.x/CXL 3.x Retimer chips and provided samples to customers, supporting a 64GT/s transfer rate. In January 2026, it released corresponding AEC active cable solutions and is actively advancing the R&D of PCIe 7.0 Retimer chips and PCIe Switch chips.

In the CXL interconnect field, the company launched its CXL 3.1 compliant MXC chip in September 2025 and provided samples to major customers. In January 2025, the company's MXC chip was selected for the CXL Consortium's first list of CXL 2.0 compliant suppliers. Samsung Electronics and SK Hynix, whose products were tested during the same period, both had their products equipped with Montage Technology's MXC chips.

R&D Investment Continues to Increase, SerDes Technology Becomes Core Underlying Support

In 2025, the company's R&D expenses were 915 million yuan, a year-on-year increase of 19.9%, accounting for 16.8% of operating revenue.

Since its A-share listing in 2019, the company's R&D expenses have increased year by year. As of the end of 2025, the company had 583 R&D personnel, accounting for 74.4% of its total employees, with approximately 64% holding master's degrees or higher.

At the core technology level, the company's self-developed 64GT/s PAM4 SerDes technology has been successfully applied to PCIe 6.x/CXL 3.x Retimer chips. Development is currently underway for 128GT/s SerDes technology, which will be used for PCIe 7.0 Retimer and high-speed Ethernet PHY Retimer chips.

In terms of intellectual property, as of the end of 2025, the company had accumulated 224 authorized domestic and international invention patents.

Gross Profit Margin Improves, Expense Fluctuations Affect Apparent Net Profit Growth

In 2025, the company's overall gross profit margin was 62.2%, an increase of 4.1 percentage points from the previous year. The net profit margin was 41.0%, an increase of 2.2 percentage points year-on-year. Net cash flow from operating activities was 2.022 billion yuan, marking the fourth consecutive year of growth.

It should be noted that management expenses in 2025 increased significantly to 526 million yuan, a year-on-year increase of 168.2%, primarily due to a substantial increase in share-based payment expenses resulting from the implementation of a core executive incentive plan.

Total share-based payment expenses for the year amounted to 431 million yuan, impacting net profit attributable to the parent company by approximately 412 million yuan (after tax). Excluding share-based payments and Hong Kong listing fees, non-GAAP net profit was 2.650 billion yuan, an increase of about 81% year-on-year.

Regarding exchange rate risk, the company's daily operations are primarily settled in US dollars. In 2025, the company incurred foreign exchange losses of 40.7494 million yuan. Assuming all other variables remain constant, a 5% appreciation of the RMB against the US dollar would negatively impact the company's net profit for the year by approximately 93.59 million yuan.