L&T Semiconductor to acquire Bengaluru-based chip startup

Engineering and infrastructure conglomerate L&T announced on Tuesday that it will be acquiring Bengaluru-based fabless semiconductor design company SiliConch Systems. Under the agreement, L&T’s wholly owned subsidiary L&T Semiconductor Technologies will be buying a 100% stake in the startup for ₹183 crore. It will comprise an upfront payment of ₹133 crore and the remaining ₹50 crore payable over four years. 

The acquisition is expected to be completed by September 15. “The acquisition is expected to add 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,” the company statement said. 

To be sure, 61-member SiliConch Systems specialises in building system-on-chip IPs. The end customers of IPs delivered by SiliConch are original equipment manufacturers and/or fabless IC companies, primarily in the US, who provide power management systems for smartphones, personal computers, automotive, Internet of Things (IoT), and accessories. The company primarily generates revenue as non-recurring engineering (NRE) revenue and licence fees. For FY24, the company reported a turnover of ₹27.68 crore. 

In the burgeoning semiconductor market, many firms are taking the acquisition route to expand their semiconductor business. On Monday, technology consultancy firm Accenture announced its acquisition of Excelmax Technologies, a semiconductor design services provider based in Bengaluru. The acquisition enhances Accenture’s growing silicon design and engineering capabilities, the company said in a press release.  This acquisition follows Accenture's addition of XtremeEDA, a silicon design services firm based in Ottawa, Canada, in 2022. 

Another major semiconductor acquisition took place this year was the Indian IT service major Infosys’ deal to acquire InSemi, a Bengaluru-based semiconductor design and embedded services provider for ₹280 crore. The company at the time of announcement in January said that the buyout would help accelerate its chip-to-cloud strategy by bringing niche design skills at scale and would also pair with its existing investments in AI and automation platforms and industry partnerships.