SemiFive saw a sharp increase in revenue in the second quarter of this year, but it failed to escape the red as it proactively reflected the costs of an ASIC project. However, analysts note that revenue linked to the additional costs is likely to be recognized in the second half of the year, which could change the company's future earnings trajectory.

■ Q2 Revenue of KRW 46.8 Billion, Up 68.1% Year-on-Year

According to Shinyoung Investment & Securities, SemiFive's Q2 revenue came to KRW 46.8 billion, up 68.1% from the same period a year earlier. However, the company continued to post losses, recording an operating loss of KRW 11 billion.

The main cause of the deteriorated profitability was cited as an increase in expected costs for an existing ASIC project. The additional expenses were reflected in advance during the course of the project, which turned the operating profit and loss back into a loss compared to the previous quarter.

■ Key Variables for H2: Speed of Revenue Recognition and Easing of Cost Burden

The revenue growth trend itself continues. With Q2 revenue rising sharply, the incremental revenue linked to the additionally recognized costs is expected to be reflected in the second half of the year.

Accordingly, the speed of revenue recognition related to the ASIC project and whether the cost burden eases are expected to be key variables in SemiFive's second-half performance. If the proactively reflected costs translate into actual revenue growth, the pace of profitability recovery could also change.

However, quarterly earnings volatility could increase depending on project-by-project costs and the timing of revenue recognition, so it is necessary to monitor both new order wins and the progress of existing projects going forward.

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