L&T To Acquire Semiconductor Design Startup SiliConch Systems

SUMMARY

While L&T will pay an upfront amount of INR 133 Cr at the closing, the remaining balance will paid over four years subject to certain targets

Founded in 2015, SiliConch Systems is a fabless semiconductor design startup that develops system-on-chip (SoCs)

The acquisition will help L&T shore up its semiconductor play and strengthen its expertise in the fabless chip manufacturing space

Amid the ongoing buzz in the country’s semiconductor space, construction giant L&T is acquiring a 100% stake in semiconductor design startup SiliConch Systems for INR 183 Cr.

In a regulatory filing with the BSE, L&T said that its semiconductor arm, L&T Semiconductor Technologies (LTSCT), has entered a share purchase agreement to complete the transaction by September 15.

“…We wish to inform you that L&T Semiconductor Technologies Limited, a wholly owned subsidiary of the company, has entered into a share purchase agreement on July 8, 2024 for acquisition of 100% stake in SiliConch Systems Private Limited,” said the construction major.

The INR 183 Cr deal will comprise an upfront amount of INR 133 Cr payable at the time of closing the transaction. The remaining INR 50 Cr shall be payable over four years and will be subject to “closing adjustments” and fulfilment of “certain targets and other conditions”.

Founded in 2015 by Vishnu Mohan Pusuluri, Vinay Patel, Polasa Rakesh, Kaustubh Kumar, Jaswanth Ammineni, Abhishek Sardeshpande and Shubham Paliwal, SiliConch Systems is a fabless semiconductor design startup that develops system-on-chip (SoCs). It claims to have more than 30 granted patents under its belt spanning multiple geographies.

The acquisition will help L&T shore up its semiconductor play and strengthen its expertise in the fabless chip manufacturing space. The move will also enable L&T to onboard the startup’s 61-member talent pool into its fold.

“The acquisition is expected to add IP, engineering skill sets and design expertise to strengthen the group’s (L&T) presence in fabless semiconductor business, and thus aligns with the overall growth strategy of LTSCT,” L&T said.

SiliConch primarily generates revenue from SoC intellectual properties (IPs) that cater to original equipment manufacturers (OEMs) and US-based integrated circuit manufacturers.

As per the filing, SiliConch Systems clocked an operating revenue of INR 19.97 Cr in the financial year 2022-23 (FY23), up from INR 11.02 Cr in the previous year. In FY24, revenue from operations jumped over 38% year-on-year (YoY) to INR 27.68 Cr.

The development comes at a time when the Indian semiconductor space is witnessing healthy activity on the back of growing demand for semiconductor chips and the government’s focus on semiconductor manufacturing. Earlier this week, IT juggernaut Accenture acquired Bengaluru-based chip design startup Excelmax Technologies for an undisclosed amount.

Earlier this month, Tessolve CEO Raja Manickam announced the launch of his fabless semiconductor startup, iVP Semi. The startup also bagged $5 Mn in funding from multiple investors.

As per an Inc42 report, the homegrown semiconductor industry is projected to soar to a market size of $150 Bn by 2030.