EnSilica strikes high-end ASIC development and supply agreement

Chip maker EnSilica said on Friday that it has entered into an exclusive and binding Letter of intent for the development and supply of high-end application-specific integrated circuits for use in telecommunications infrastructure.

EnSilica said the agreement has been awarded by "an established telecommunications equipment supplier" and provides for the commencement of the ASIC specification and then the design phase of the project, ahead of a final contract being entered into for full design and supply.

Initial work, which commences in January, will be funded by non-recurring engineering fees under the agreement, with initial ASIC production and supply anticipated to begin at the end of the calendar year 2026, subject to final contract.

The final contract was currently expected to be worth in excess of an estimated $35.0m over a ten-year period, based on quoted NRE fees and the customer's minimum projected production volumes.

Chief executive Ian Lankshear said: "As the demand for higher data rates surges and network operators strive to enhance the power efficiency of their systems, ASICs are key components for the next generation of terrestrial and satellite telecommunication equipment. The imperative for a secure supply chain is prompting equipment manufacturers to commission ASICs, ensuring business resilience and bolstering their competitiveness. EnSilica's expertise in RF and digital technologies, alongside our strong supply chain management capabilities, positions us as an ideal partner for such projects.

"This design and supply project is the first step in what we hope will be a long and mutually beneficial partnership, underscoring our commitment to ongoing collaboration and innovation in cutting-edge communication technology."

As of 0955 GMT, EnSilica shares were up 6.48% at 39.93p.

Reporting by Iain Gilbert at Sharecast.com