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Larsen & Toubro's Subsidiary to Acquire SiliConch Systems

CIO Insider Team | Wednesday, 10 July, 2024
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According to reports, Larsen & Toubro’s (L&T) whole-owned subsidiary L&T Semiconductor Technologies (LTSCT) signs an agreement for the acquisition of 100 stakes in Bengaluru-based SiliConch Systems for a cash consideration of Rs 183 crore.

“The acquisition is expected to add intellectual property (IP), engineering skillsets, and design expertise to strengthen the Group’s presence in the fabless semiconductor business, and thus aligns with the overall growth strategy of LTSCT,” according to the firm L&T.

Silicon Chi, with 61 employees, has an 8-year history as a fabless (no manufacturing equipment) semiconductor design company that develops system-on-chip IP and has 30 patents worldwide.

Under the terms of the agreement, an upfront amount of Rs 133 crore is payable at closing, and a deferred amount of Rs 50 crore is payable over 4 years, subject to adjustments, approvals, and achievement of certain targets and other conditions.

L&T, a $27 billion multinational conglomerate headquartered in Mumbai, invested Rs 850 crore in the establishment of LTSCT last year, and the acquisition of Silicon Chip is expected to be completed by September 15, 2024, after all conditional requirements are met.

The end customers for Silicon Chip's IP are primarily U.S. original equipment manufacturers and fabless integrated chip companies that provide power management systems for smartphones, PCs, automobiles, Internet of Things, and accessories

In the past three years starting FY24, FY23, and FY22, it reported an operational revenue or turnover of Rs 27.68 crore, Rs 19.97 crore, and Rs 11.02 crore, respectively.

SiliConch generates revenue primarily as non-recurring engineering revenues and license fees. The end customers for Silicon Chip's IP are primarily U.S. original equipment manufacturers and fabless integrated chip companies that provide power management systems for smartphones, PCs, automobiles, the Internet of Things, and accessories.

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