Why did Accenture buy Excelmax, Cientra

IT consultancy firm Accenture made two semiconductor acquisitions this week. Both the acquisitions — Cientra and Excelmax Technologies — are expected to augment and expand the Dublin-headquartered firm’s silicon design and engineering capabilities

US-based Cientra offers expertise in semiconductor engineering, development and testing, while Bengaluru firm Excelmax expertise in semiconductor engineering, development and testing. Through the deals, 530 employees of the Cientra and approximately 450 professionals from Excelmax will be joining Accenture’s Advanced Technology Centers in India. To be sure, the Advanced Technology Centers are part of Accenture’s global delivery network that provides technology services globally across industries. 

"These acquisitions bring high-quality skills and expertise needed to accelerate and scale semiconductor design services and offerings, specifically in the areas of physical design, analog, logic design and verification services," Ram Ramalingam, Platform Engineering and Intelligent Edge lead, Accenture Technology told TechCircle.

These acquisitions follow Accenture’s buy of XtremeEDA, an Ottawa-headquartered silicon design services firm in 2022. The deal added about 40 experienced engineers and practitioners working across industries like software and platform, telecommunications, consumer products, avionics and defense to Accenture Cloud First.

So why is Accenture investing it semiconductor design?

Due to high design and manufacturing costs, lack of in-house talent, and high-paced technology development present challenge for many companies to design and develop semiconductor product. Accenture claims to offer “cohesive team of engineers with expertise in every aspect of silicon technology development from concept to production to help clients accelerate edge innovation and optimise resources”.

“Accenture has been constantly making strides in the semiconductor industry and provides various services related to chip manufacturing. This makes sense due to a recent trend commonly known as ‘In-house chip design’,” said Kanishka Chauhan, Senior Principal Analyst at Gartner. “Big players have consistently dominated chip design. While these players are a good choice for large OEMs (original equipment manufacturers) and volume requirements, they cannot service the specific requirements associated with smaller volumes. Several big companies are taking the role of designing the chips in-house.”

Notably, Accenture has a dedicated semiconductor services unit that offers managed solutions for application-specific integrated circuit (ASIC) and system-on-chip (SoC) development. Further, since June 2020, Accenture Research has been building a design integration team, based on client need, The Register reported. 

The company’s annual report for FY23 showed that 16% of its Communications, Media & Technology services’ $11.5 billion revenue came from HiTech. HiTech includes silicon design, semiconductor design and foundries data centers, AI computing, and enterprise and consumer technology. 

According to Fortune Business Insights, the global semiconductor market size was valued at $611.35 billion in 2023 and is projected to grow from $681.05 billion in 2024 to $2,062.59 billion by 2032, exhibiting a CAGR of 14.9% during the forecast period (2024-2032). In terms of talent, the demand for semiconductor design experts is on the rise especially due to proliferation of digital technologies such as AI. India alone 20% of the global semiconductor design workforce and expects to need 2.5-3 lakh skilled professionals by 2027 across R&D, design, manufacturing, and packaging.

In the burgeoning chip design market, many firms are taking the acquisition route to expand their semiconductor business. Engineering and infrastructure conglomerate L&T announced on Tuesday that it will be acquiring Bengaluru-based fabless semiconductor design company SiliConch Systems. 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.