Moschip is writing an expansion code

HYDERABAD: Fabless chip design company Moschip Semiconductor Technology is close to rolling out high-priced programmable network controller chips, the market for which is estimated to be around $500 million per annum.
The ARM-based chips are used for universal serial bus (USB) wireless solutions for network storage and server applications that can also be ported on handhelds. Priced at an average of around $10 each, the chips will put the company on the high revenue path with several direct and OEM customers already lined up, K Ramachandra Reddy, CEO and chairman, Moschip, told DNA Money.
The samples for evaluation will be released in mid-February to these customers whose demand is put around 1,00,000 chips per annum, he added.
While this will bring in big-ticket revenues beginning next quarter for the company, an early starter in the fabless chip design in India, Moschip is also looking to grow in size through the inorganic route. It is in discussions with potential acquisition targets that have revenues of over $10 million.
“We will enter into at least three such deals over the next one year and could announce the first one in about two months,” he added.
“We are also looking to acquire internet protocol from companies divesting their chip lines as also to enter into joint ventures to increase our market reach,” Reddy said after a board meeting of the company.
Moschip has over 17 products in the market. Apart from designing chips that power USB devices like flash drives, dongle cards and a host of other gadgets like set-top boxes and point-of-sale machines, industrial automation systems, vending machines, gaming motherboards and CCTV systems.
Given the high growth being seen in the digital entertainment and mobile computing segments, Moschip is keen on increasing its presence in these areas.
Soon, chips designed by Moschip on its “Sapphire” platform will begin powering state-of-the-art video slot machines to be made by Russian gaming giant Unicom Group for sale globally.
By the year-end USB entertainment gizmos like Internet radio based on chips designed by it and made by a multinational firm will roll out, Reddy said. He, however, refused to name the company.
The company which had revenues of roughly Rs 24.60 crore last year posted a 27% increase in revenues in the third quarter ended December 31, 2006 at Rs 7.59 crore. It was also the third consecutive cash positive quarter for the company, Reddy said.

C Chitti Pantulu Thursday, January 18, 2007 21:06 IST

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