- AIM-listed stock makes specialist chips used in semiconductors
Ensilica designs customised chips, used in four key sectors – automotive, general industry, satellite communication and healthcare
EnSilica shares jumped by more than 10 per cent on Wednesday after the AIM-listed chip maker revealed a major supply deal in the US.
The firm, which specialises in application-specific integrated circuits (ASICs) used in semiconductors, told shareholders it had agreed an order for a custom ASIC ‘from a major electronics manufacturer headquartered in the US’ worth $20million in revenue for the calendar years 2025 and 2026.
Bosses said the firm is ‘actively pursuing’ similar deals in the ‘sizable growth market’ of the US, which it hopes will boost production margins across its ASIC business and help ‘strengthen’ its position ‘within the semiconductor supply chain’.
EnSilica shares were up 14.6 per cent to 70.5p by midafternoon on Wednesday, taking 2024 gains to almost 80 per cent.
The shares were handed another boost this week as EnSilica reported first half revenue growth of 11.2 per cent to £9.5million, while tax credits helped drive the group to a £500,000 post-tax profit.
EnSilica was initially founded as a consultancy in 2011 by chief executive Ian Lankshear, who previously held semiconductor-related roles at Hitachi and Nokia.
It now also designs customised chips, used in four key sectors – automotive, general industry, satellite communication and healthcare.
EnSilica’s three chips signed off for production
First half revenues were fairly split between the two units, with its consultancy business posting sales of £4.7million, while its growing design and supply unit brought in £4.9million.
The group’s revenues have grown from £8.6million in 2021 to £20.5million last year, largest thanks to growth in its design and supply business, and Allenby Capital analysts think the firm will post sale of more than £32million by 2025.
Debts have also climbed as the group invests in the costly business of chip design and production, reaching £1.4million last year from a net cash position of just under £800,000 in 2022. Allenby thinks this figure will jump to almost £4.4million by the end of this financial year.
Allenby analysts said: ‘The Design and Supply model requires upfront investment from EnSilica but has the potential to deliver long term predictable and high margin income streams as the EnSilica chips move into production.’
EnSilica’s latest deal is a ‘take out’ order which sees the ASIC move from design to foundry production.
It has announced several similar deals over the last two years but shares have struggled to maintain longer term momentum, reflecting uncertainty about the strength of chip manufacturing investment in the UK as well as the general struggles of smaller listed companies in the country.
Having listed Around 40 per cent below their all-time-high of around 188p in January last year. It listed in May 2022 at 50p a share.
Boss Ian Lankshear said on Wednesday: ‘We are delighted to announce this Supply Win from the US, which reinforces our position as a quality focused supply partner for customers and further strengthens our foundry partnerships in the US.
‘The US now represents a sizable growth opportunity for the Group, and we believe the award of this contract has the potential to generate further business, thereby bolstering our near-term revenue growth and cash-generation.’
EnSilica’s seven chips in production
