Fadu, a South Korean fabless semiconductor company that some have called a ‘unicorn,’ has reported poor earnings for the second and third quarters this year.
The combined revenue from the two quarters was only 380 million won, or around US$280,000.
This is a shocking turn as its revenue last year when it went public was 56.4 billion won.
Meanwhile, it recorded 14.8 billion won in operating loss in the third quarter and 15.2 billion won in operating loss for the second quarter. Most losses came from SG&A expenses.
The only revenue Fadu earned during the quarters was from SSD module sales.
The fabless chip company relies on SSD controllers and SSD modules for its revenue.
It supplies controllers to SK Hynix and provides its SSD module to Meta and other customers.
This means during the second and third quarters, it didn’t supply SK Hynix with even a single unit of SSD controller.
Fadu’s earnings were likely impacted by cloud service providers lowering their spending in response to the global economic downturn.
The providers are focusing their spending on AI and other high-end areas for the time being.
Fadu CEO Jihyo Lee said the company was facing difficulty in the short term but claimed that it was laying the foundation this year for future growth.
The company said the enterprise SSD market faced delays from the drop in NAND prices and readjustment of data centers.
However, there were signs of a recovery and Fadu expects earnings to improve in 2024.