EnSilica awarded initial mandate for telecoms ASIC

EnSilica (AIM: ENSI), a leading chip maker of mixed-signal ASICs (Application Specific Integrated Circuits), is pleased to announce that it has entered into an exclusive and binding Letter of Intent for the development and supply of a high-end ASIC for use in telecommunications infrastructure (the "Agreement"), with work commencing next month.

The Agreement has been awarded by an established telecommunications equipment supplier and provides for the commencement of the ASIC specification and then design phase of the project, ahead of a final contract being entered into for the full design and supply of the ASIC. The initial work funded by non-recurring engineering ("NRE") fees under the Agreement is set to commence in January 2024 and will be fully funded by the customer, with initial ASIC production and supply anticipated to begin at the end of the calendar year 2026, subject to final contract.

The final contract is currently expected to be worth in excess of an estimated US$35 million over a ten-year period (including initial work undertaken pursuant to the Agreement), based on quoted NRE fees and the customer's minimum projected production volumes.

The Agreement outlines the key commercial terms of a final contract, including the budgetary NRE fees and volume production pricing for the ASIC. Both parties have a break option under the Agreement if the final terms of the contract are not agreed, however, the principal terms are defined in the Agreement and EnSilica will be paid to commence work next month.

EnSilica's extensive experience in developing high-performance Radio Frequency ("RF") and complex digital systems, as well as its strong supply chain management capabilities, are key factors in EnSilica being selected as the ASIC partner for this project.

This Agreement reinforces EnSilica's standing as a leading European ASIC supplier, showcasing the Company's continued commitment to innovation and excellence in the high growth semiconductor sector.

The Agreement is one of the potential contracts that was referred to in the Company's announcement on 14 December 2023.

Ian Lankshear, Chief Executive Officer of EnSilica, commented:

"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."