Qualcomm's move into custom AI chips for Amazon's cloud arm is bad news for Taiwan's Alchip, which had been a key AWS supplier and is now watching its stock slide.

• Qualcomm will build custom AI chips for AWS, and Amazon got the right to buy up to $4 billion of Qualcomm stock to lock in the partnership.
• Investors worry Alchip could lose part of its AWS orders, and its shares have broken below their monthly average and are fighting to hold the quarterly line.
• Foreign and local institutions sold Alchip for three straight days, though buyers stepped in after an early dip and pushed the stock back to flat.
• Alchip says its new 3-nanometer AI accelerator for AWS is already shipping in volume, with record quarterly sales and profit expected.
• Custom AI chips are now a crowded fight, with Alchip, GUC, and MediaTek holding Taiwanese positions and Qualcomm targeting $5 billion in data center sales by fiscal 2027.

Outlook: Alchip claims current projects and a big customer's next-generation product can carry growth for three to four years, and it may land another large cloud client, but the stock stays under pressure while the Qualcomm threat is fresh.