Larsen & Toubro Ltd, India’s biggest engineering and construction company, has agreed to acquire Bengaluru-based SiliConch Systems Pvt. Ltd to strengthen its presence in the fabless semiconductor business.
L&T said Tuesday its wholly owned subsidiary L&T Semiconductor Technologies will buy a 100% stake in SiliConch for up to Rs 183 crore ($21.9 million). This will comprise an upfront payment of Rs 133 crore and up to Rs 50 crore payable over four years based on the achievement of certain milestones.
The company expects to complete the acquisition by September 15.
L&T said in a statement the acquisition aligns with the overall growth strategy of its semiconductor arm and that it expects to gain intellectual property (IP), engineering skillsets and design expertise from SiliConch.
SiliConch, which started in 2016 and employs 61 people, specialises in building system-on-chip IPs. The end customers of IPs delivered by SiliConch are original equipment manufacturers and fabless integrated chip makers, primarily in the US, who provide power management systems for smartphones, personal computers, automotive, Internet of Things, and accessories.
SiliConch generates revenue primarily as non-recurring engineering revenue and license fees. For FY24, it reported revenue of Rs 27.68 crore, up from Rs 19.97 crore the year before and Rs 11.02 crore in FY22.
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 this year was the Indian IT service major Infosys’ deal to buy InSemi, a Bengaluru-based semiconductor design and embedded services provider for Rs 280 crore, in January. At the time, Infosys said 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.
