L&T to Enter Semiconductor IP Market with SiliConch Systems Acquisition

On July 9, 2024, Larsen & Toubro Limited (L&T) announced through a stock exchange filing that its wholly owned subsidiary, L&T Semiconductor Technologies Limited (LTSCT), has entered into a definitive Share Purchase Agreement to acquire a 100% stake in SiliConch Systems Private Limited. The acquisition, slated to be completed by September 15, 2024, pending customary closing conditions, marks a strategic move by L&T into the semiconductor domain.

SiliConch Systems Private Limited, established in April 2016 and headquartered in Bangalore, specialises in developing and designing semiconductor Intellectual Property (IP) and Integrated Circuits (IC). As a fabless semiconductor design company, SiliConch holds 30 granted patents globally and is renowned for its expertise in System-on-Chip (SoC) IP development. The company operates primarily on non-recurring engineering (NRE) revenue and license fees, serving OEMs and fabless IC companies in the U.S. market across various sectors, including smartphones, PCs, automotive, IoT, and accessories.

The acquisition is valued at ₹183 crore and structured as an upfront payment of ₹133 crore at closing, subject to customary adjustments, and a deferred payment of ₹50 crore over 4 years, contingent upon meeting specified targets and conditions. This strategic investment aims to enhance L&T’s capabilities in the fabless semiconductor business by integrating SiliConch’s IP, engineering skillsets, and design expertise into its operations.

By acquiring SiliConch, L&T aims to bolster its presence in the semiconductor sector, leveraging the acquired intellectual property and design capabilities to strengthen its product offerings and customer solutions. This aligns with L&T’s broader growth strategy in technology and innovation-driven sectors.

The transaction underscores L&T’s commitment to expanding its footprint in high-growth areas of semiconductor design and technology, positioning itself as a key player in delivering advanced solutions to global markets. The integration of SiliConch’s capabilities is expected to contribute significantly to L&T’s portfolio, enhancing its competitiveness and ability to address evolving market demands in the semiconductor industry.

On July 9, 2024, the share price of Larsen & Toubro Limited opened at ₹3,650.00, touching the day’s high at ₹3,685.00, as of 10:58 AM on the NSE.

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