EnSilica looks to acquisitions, expands Bristol design centre

Business news |
By Nick Flaherty

UK chip designer EnSilica has capitalised on the demand for semiconductors, expanding its design centre in Bristol and looking at acquisitions after an increase in revenues of 77%.

The results are the first since its public offering on the AIM junior market in the UK in May which raised £6m. It saw revenues of £15.3m, up 77%, with profits of £700,000, up from a loss of £170,000 in 2021.

The company increased its headcount from an average of 96 during 21 to 117 in 2022. This includes six members of the ASIC implementation team from Blu Wireless Technologies in Bristol following a deal in July. That deal included non-core IP from Blu Wireless on the design flow and an on-going partnership.

The company set up the mixed signal design centre in Bristol 2015 with a team of seven engineers led by Nick Weiner, director of engineering, and is moving into a new building to allow for more growth. It has also opened an ASIC design centre in Sheffield and an RF centre at its headquarters in Oxford.

“I am delighted to be announcing such a strong set of full year results for EnSilica, our first since floating on AIM. 2022 has been a truly transformational year for our business as we seek to further capitalise on what we believe is a sizable market opportunity for EnSilica. The Company has started FY23 well, supported by existing contracts and ongoing new business momentum,” said Ian Lankshear, CEO of EnSilica.

The company has also signed a deal to supply industrial ASICs worth over US$30 million over seven years. This follows production of its first automotive ASIC after the launch of a new flagship vehicle by a premium automotive company. It is also developing an ASIC for a satellite network from AST to deliver 5G from space. 

“The move from consultancy to focusing on ASIC design and supply embeds EnSilica further within the electronics value chain,” said Lankshear. “ASIC customers pay an upfront fee towards the costs of design, tooling and test development of the ASIC, the NRE. Customers subsequently purchase the ASICs that EnSilica supplies or, in some cases, pay royalties to EnSilica for the ASICs that a third party will manufacture on the customer’s behalf.”

“EnSilica often co-invests in the development of ASICs with the customer and depending on the sector, it takes two to five years to reach full production. At the production stage, revenues can be high, last several years and generate gross margins circa 35% to 60% range. The gross margin will depend on the market and the level of co-founding funding of the NRE required,” he said.

“Therefore, part of EnSilica’s expertise is in assessing whether to proceed and invest in a particular IC project resulting in long-term component supply or royalty revenue for the Company.”

“The IPO was the culmination of a tremendous period of organisational and operational change for our business, which is ultimately centred on further capitalising on a sizeable growth opportunity within the semiconductor industry,” said Mark Hodgkins, executive chair of EnSilica.

“Our listing not only provided the Company with an immediate growth capital, alongside creating the flexibility to fund potential M&A opportunities. It also enhanced both transparency and raised our international profile with existing and potential customers. We strongly believe that this will enable us to attract, recruit and retain key employees going forward”

The plan is to expand EnSilica’s offering through consolidation and vertical integration says Lankshear, and staffing is key with competition for chip designers from companies such as Codasip, SiFive and Imagination Technologies, although Bristol-based AI chip designer Graphcore is laying off staff.

“In this time of disruption of the labour markets and steep labour cost rises, attracting new employees and retaining existing ones is a key focus of our executive team,” said Hodgkins. “This is evidenced with the hiring of our ASIC implementation team, comprising of six skilled engineers from Blu Wireless earlier this year. The new team will be located in EnSilica’s new Bristol facility, which we believe will form a strong platform to further attract talent in the Bristol area.”

Like other chip design houses such as Sondrel, which is also in the process of listing on AIM, EnSIlica is looking to develop mixed signal catalogue IP, with two significant standard platforms already at the device evaluation stage.

The company has also added semiconductor executive Noel Hurley to its board. Hurley, a former ARM executive, is a non -executive director at Blue Wireless and CEO of Yellow Dog in Bristol.

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