L&T to Buy 100% Stake in SiliConch Systems

Larsen & Toubro (L&T) announces acquisition of SiliConch Systems to bolster semiconductor capabilities and expand market presence in high-tech solutions.

by Damodharan N

Updated Jul 10, 2024

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L&T to Buy 100% Stake in SiliConch Systems

Larsen & Toubro (L&T), through its wholly owned subsidiary L&T Semiconductor Technologies Limited (LTSCT), has entered into a Share Purchase Agreement to acquire a 100% stake in SiliConch Systems Private Limited.

The deal, announced on July 8, 2024, is valued at a total of INR 183 crore, comprising an upfront payment of INR 133 crore at closing and a deferred amount of INR 50 crore payable over four years, contingent on meeting specific targets and conditions.

SiliConch Systems, founded in April 2016 and headquartered in Bangalore, specializes in developing and designing semiconductor Intellectual Property (IP) and Integrated Circuits (IC).

The acquisition aims to bolster LTSCT’s presence in the fabless semiconductor sector, adding valuable IP, engineering skillsets, and design expertise to its portfolio. This aligns with L&T's strategy to expand its technological capabilities and enhance its offerings in the high-tech solutions market.

SiliConch has shown a steady growth trajectory, with operational revenues increasing from INR 11.02 crore in FY 2021-22 to INR 27.68 crore in FY 2023-24. The company primarily serves OEMs and fabless IC companies in the U.S., focusing on power management systems for smartphones, PCs, automotive, IoT, and accessories.

While the acquisition appears promising, it raises critical considerations. The fabless semiconductor industry is highly competitive and requires continuous innovation and investment.

L&T’s decision to invest heavily in SiliConch reflects confidence in the semiconductor sector's growth potential. However, the success of this acquisition will depend on SiliConch’s ability to meet the deferred payment targets and continue its growth trajectory.

Additionally, integrating SiliConch’s operations and retaining its talent will be crucial for realizing the expected synergies. The upfront investment of INR 133 crore is substantial, and any delays or disruptions in integration could impact L&T's financial performance.

Read the full Release Here 

Larsen & Toubro Semiconductor Technologies Limited (“LTSCT”)

Larsen & Toubro Semiconductor Technologies Limited (LTSCT), a wholly owned subsidiary of L&T, is India's first major fabless semiconductor product company. Specializing in the design and delivery of smart devices.

LTSCT focuses on creating energy-efficient, high-performance semiconductor systems for global customers, leveraging data, electrification, and software-defined technology trends.

The company's portfolio includes MEMS sensors, power, analog mixed signal, and RF products, catering to automotive, industrial, energy, and telecommunication sectors. LTSCT operates in key global markets, with offices in Austin, Munich, London, Tokyo, Bangalore, and Chennai.

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SiliConch Systems

SiliConch Systems is a fabless semiconductor design company specializing in Application Specific Intellectual Property (IP) and Integrated Circuits (IC) within the USB Type-C ecosystem, focusing on Power Delivery and Datapath technologies.

With a workforce of 61 employees and 30 granted patents worldwide, SiliConch develops System-on-Chip IP solutions. The company generates revenue primarily through non-recurring engineering (NRE) projects and license fees.

Its clientele includes OEMs and fabless IC companies in the U.S., supplying power management systems for smartphones, PCs, automotive applications, IoT devices, and accessories.

Over the past three fiscal years, SiliConch has shown steady revenue growth, reaching INR 27.68 crore in FY 2023-24, reflecting its strong position in the semiconductor industry.

L&T to Buy 100% Stake in SiliConch Systems - FAQs

1. What is SiliConch Systems' revenue in FY 2023-24?  

SiliConch Systems reported a revenue of INR 27.68 crore in the fiscal year 2023-24.

2. How much revenue did SiliConch Systems generate in FY 2021-22?  

In FY 2021-22, SiliConch Systems recorded revenue of INR 11.02 crore

3. What is the total deal value for L&T's acquisition of SiliConch Systems?  

L&T's acquisition of SiliConch Systems is valued at INR 183 crore in total.

4. What is the upfront payment made by L&T at the closing in the acquisition deal?  

L&T made an upfront payment of INR 133 crore at closing for acquiring SiliConch Systems.

5. How much is the deferred amount in L&T's acquisition deal, and over what period is it payable?  

The acquisition includes a deferred amount of INR 50 crore, which will be paid over four years, subject to meeting specific targets and conditions.

6. How many employees does SiliConch Systems have?  

SiliConch Systems employs a workforce of 61 individuals, contributing to its operations and growth in the semiconductor sector.

7. How many patents does SiliConch Systems hold globally?  

SiliConch Systems holds a portfolio of 30 granted patents across various geographies, underscoring its intellectual property (IP) strength and innovation in semiconductor design.

8. Which year was SiliConch Systems founded, and where is it headquartered?  

SiliConch Systems Founded in April 2016, is headquartered in Bangalore, India,

9. What type of revenue does SiliConch Systems primarily generate?  

SiliConch Systems primarily generates revenue through non-recurring engineering (NRE) projects and license fees, catering to OEMs and fabless IC companies primarily in the U.S.

10. How has SiliConch Systems' revenue trended over the past three fiscal years?  

SiliConch Systems has shown a progressive increase in revenue, with figures rising from INR 11.02 crore in FY 2021-22 to INR 27.68 crore in FY 2023-24, indicating robust growth in its market presence and operations.

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