EnSilica set to greater than double chip gross sales this yr amid AI increase
- EnSilica revealed first-half sales from chip supplies climbed by 164% to £2.9m
AIM-listed EnSilica expects its chip supply sales to more than double this financial year following a strong first-half performance.
The technology company, which supplies and designs revealed sales from chip supplies skyrocketed 164 per cent to £2.9million in the six months ending 30 November.
The chipmaker told investors it has enough orders and scheduled production to bring in £6million of total supply revenues this year.
EnSilica won five deals to supply and design so-called Application Specific Integrated Circuits (ASICs) during the half-year period.
These include a second contract with German electronics giant Siemens, a $30million deal with Italian telecoms supplier SIAE Microelettronica, and a $31million contract to make an ASIC for ‘automotive and industrial applications’.
However, the Oxfordshire-based firm’s half-year turnover falling by £283,000 to £9.3million.
Forecast: EnSilica expects its chip supply sales to more than double this financial year following a strong first-half performance
EnSilica said the decline reflected its transformation from being a pure consultancy business to a fabless semiconductor producer.
The expanded investment in intellectual property as part of this transition saw earnings before nasties swing to a £210,000 loss, from a £515,000 profit the previous year.
EnSilica shares slumped 11.2 per cent to 43.5p on Monday morning following its trading update, making them one of the AIM All-Share Index’s ten-biggest fallers.
The group anticipates early revenues from the five newly-signed contracts to deliver a full-year earnings before nasties profit.
Ian Lankshear, chief executive of EnSilica, also said the firm expects lifetime NRE and chip supply sales from these contracts alone to generate an additional £100million of revenues from 2027 onwards.
He added: ‘Our diverse range of markets and high-profile customers is building both a robust portfolio and exciting future chip supply revenue streams.’
Lankshear previously worked for Hitachi, Nokia and Chemring before co-founding EnSilica in 2001 to provide consultancy services to semiconductor businesses.
It later moved into creating customised chips for various industries, such as general industry, automotive, healthcare, and satellite communication.
EnSilica’s results come a week after the group gained £10.4million of funding from the UK Space Agency to develop silicon chips and software for a user terminal as part of the Connectivity in Low Earth Orbit [C-LEO] programme.
The UK Government is spending £160million over the next four years on the C-LEO scheme to try and boost the country’s share of the satellite mega-constellation market.
Dan Risdale, managing director for technology at investment research firm Edison Group, said: ‘Looking longer term, contract wins for ‘Design and Supply’ and ‘Supply’ are the key yardstick for future growth.
‘The company estimates that designs from contract wins over the period will generate £100m in annual revenues over time, and therefore if contract momentum is sustained at or near this pace, ‘Design and Supply’ and ‘Supply’ revenues should scale into the triple figure £m mark over a number of years.
‘While cash is somewhat tight, there seems to be a disconnect between the company’s current market cap of £43m and this growth potential.’
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