HCL Technologies snaps up Sankalp Semiconductor to grow VLSI presence

HCL Technologies has acquired Sankalp Semiconductor, a Sunnyvale, California based advanced technology design services firm, in an all-cash deal worth Rs 180 crore. 

The acquisition is set to formally close by the first week of October this year and will allow the Noida headquartered IT services and consulting major to combine Sankalp’s analog strength with its digital SoC (system-on-the-chip) expertise. The deal will enable HCL to gain market share in the very large scale integration (VLSI) design services space. 

VLSI is the process of combining multiple chips with stacks of transistors to achieve multi functionality. One example of VLSI is the microprocessor. 

“Sankalp will complement our strong semiconductor offerings and help offer a wider range of services to our customers in the analog and mixed signal space,” GH Rao, president of engineering and R&D Services, HCL Technologies, said. “Sankalp will operate as a 100% subsidiary of HCL,” he added.

Sankalp was founded in 2005 by Vivek Pawar, an alumnus of IIT Kharagpur and a former engineer with Texas Instruments. The company has operations in the US, Canada, Germany and India. It offers a variety of services, including end-to-end solutions for the automotive, consumer, IoT (internet of things), medical electronics, networking and wireless segments. The company reported revenues at Rs 112 crore for the financial year ended March 2018. 

"The strategic acquisition will enable synergies between engineering teams, allowing us to offer a broader semiconductor know-how. The joined forces will enable deeper engagements with customers in the end-to-end digital and mixed signal design space.” Sankalp CEO Samir Patel said.

The Shiv Nadar promoted HCL has been focusing on emerging technologies such as artificial intelligence (AI), cloud and IoT for a while.

In August last year, the company set up two IoT labs in Seattle and Noida, aimed at helping companies collaborate over IoT solutions. The company expects the IoT market opportunity to touch $1 trillion by 2021. In the cloud space, the company has partnered with Google to sell hybrid cloud solutions. 

In terms of acquisitions, the company recently acquired a 6.64% stake in UK-based artificial intelligence (AI) solutions firm Om Mobile Ventures for $2 million. Its biggest acquisition came last year when it acquired select software businesses from Armonk-headquartered IBM for $1.8 billion. HCL is spinning out the acquisitions into new division called HCL Software, which is expected to generate $625 million in revenues a year after the completion of the acquisition.  

Some of the company’s other acquisitions over the last two years include StoneBridge Envision in March 2019 which it bought for $45 million, Lotus Development Corporation and Actian in 2018. The company paid $330 million for Actian. In 2018, HCL had also reported the acquisition of Germany's H&D International Group for around $35 million and life sciences and consumer services provider C3i Solutions from US drugmaker Merck & Co. for $60 million.