Three smaller chip companies reported on November 10. Each one tells a different story, and none of them is about AI accelerators directly, though AI demand shows up in two of them.
Netlist, a patent war that finally pays
Netlist’s Q3 net sales were $105.1 million, up 149% from $42.2 million. Look at the split. Product sales were $60.2 million, up 43%, which the company puts down to AI and data center demand for its memory modules. The other $44.9 million was license fees from Samsung.
That license money has no cost of sales, which is why gross margin jumped to 65.5% from 4.4% a year ago. Operating income was $40.6 million against a $7.2 million loss. Net income of $85.4 million, or $0.22 a share, was inflated by a $44.0 million tax benefit, so pre-tax income of $41.5 million is the cleaner number.
Cash rose to $327.7 million from $40.7 million a quarter earlier, after a $200 million upfront payment from Samsung and a first quarterly payment of $27.5 million. Netlist spent years in court with Samsung and Micron over memory module patents. It now expects license revenue under agreements with both, while a case against Google is still pending. IP legal costs were still $16.2 million in the quarter.
The question for holders is what the product business looks like once the licensing story is priced in. A 43% product growth rate is decent. It isn’t what the headline number suggests.
Silicon Labs, growing into a takeover
Silicon Labs posted Q3 revenue of $251 million, up 22% from a year ago and 10% from Q2. Industrial and commercial revenue rose 20% to $141 million and home and life rose 24% to $110 million. GAAP gross margin was 60.8%. Non-GAAP EPS was $1.05, up 228%, and GAAP EPS was $0.26 against a loss a year ago. Medical revenue hit a record, up more than 300% from a year earlier, and distributor inventory fell to a multi-year low.
There’s no guidance. Texas Instruments agreed in February to buy Silicon Labs for $231 a share in cash, about $7.5 billion, with closing expected in the first half of 2027. For SLAB shareholders the quarter mostly matters as evidence that the IoT inventory correction is over and the deal won’t be repriced. For TI holders it’s a sign they’re buying a business that’s growing again.
QuickLogic, new products take over
QuickLogic is tiny by comparison. Fiscal Q3 revenue was $5.1 million, up 153% from $2.0 million, though down 6% from Q2. New product revenue, mostly embedded FPGA IP and FPGA work, was about $4.0 million and mature products were $1.1 million. GAAP gross margin was 37.4%, against a negative margin a year ago. The GAAP loss narrowed to $2.2 million, or $0.12 a share.
The company won a six-figure eFPGA design for an automotive industrial chip on a 16nm process and added a 12LP eFPGA core that scales past 250,000 LUTs. It reported progress on a US strategic radiation-hardened FPGA program without giving figures. Cash was $19.2 million and the revolving credit line came down to $5 million from $15 million. CEO Brian Faith said he expects a strong finish to the year but gave no numbers.
