EnSilica (AIM:ENSI) notched 4.4% higher on Monday, with the AIM-quoted chip share rising to 118p, after it won a $75m, seven-year contract to manufacture an Arm-based sensing chip for a German automotive components manufacturer.
EnSilica, a fabless microchip maker with a growing portfolio of reusable IP serving the automotive, industrial, space and healthcare markets, won the work after a competitive tender and will assume manufacturing and supply of a production-ready chip with no design or tape-out required.
"The Contract opens up a connection to a Tier 1 German automotive supply chain, increases wafer volume shipments through our partner foundries and it secures the VDA-aligned automotive quality standard required to operate within the German automotive sector," Ian Lankshear, Chief Executive Officer, said.
The agreement is expected to generate around $75 million of revenue over seven years, with approximately $4 million forecast in the financial year ending 31 May 2027, and the gross margin will reflect the manufacturing-only nature of the contract.
EnSilica said it was selected over a number of competing suppliers and expects the order to reinforce its position with foundry partners and improve its prospects for future higher-margin ASIC design opportunities.
