On 5 February, EnSilica announced that a design and supply contract with Siemens AG, awarded September 2024, has reached the production tape-out milestone. This marks the completion of the design stage and a significant step towards volume production where EnSilica earns a long-term recurring revenue per chip. Volume production is now expected to begin ramping up in January 2027, ahead of the original guidance of Q4 2027. The news helps underpin our FY2027 forecasts (May year-end) and gives us the confidence to introduce forecasts for FY 2028.
Discount to sector, sector multiple implies a price around 95p. EnSilica currently trades at a c.50% discount to the sector which we believe reflects, in part, the 2025 earnings setback caused primarily by the delayed SIAE contract. Interim results indicate that the company is back on track, with growth and profitability improving. Applying a sector multiple would imply a price of around 95p, while a takeout valuation on a similar basis to SatixFy Communications’ 2025 acquisition would imply a price in excess of 300p.
Edge AI chip – ‘number 7’ in our supply revenue forecast. In July 2024 EnSilica announced it had won a supply contract for an Edge AI ASIC that had already been designed by the client. Edge Computing refers to processing taking place locally on an edge device rather than in a cloud-based data centre. EnSilica has the role of taking the clients’ design through to fabrication. The initial part of the contract is for $7m of Non-Recurring Engineering (“NRE”) work and there is a further potential supply revenues of >$50m over the first five years of production.
Matt Butlin, Allenby Capital, 17 Feb 25
Read the full company note… https://www.allenbycapital.com/client/ensilica-plc/
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