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EnSilica Shares Trade Steadily on LSE Debut. Is the Chipmaker a Buy?

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Updated 25 May 2022

Key points:

  • EnSilica shares were trading sideways after debuting on the LSE.
  • Still, we do not know much about the fabless AISC chip designer.
  • However, time will tell whether it is an excellent investment target.

EnSilica PLC (LON: ENSI) shares traded sideways after their debut on the London Stock Exchange’s AIM market yesterday. The company raised £6 million by selling 12 million shares at 50p each to the public.

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Also read: The Best UK Tech Stocks To Buy Right Now.

The company designs ASIC (Application Specific Integrated Circuit) chips for various industries, including the satellite, automotive, and healthcare sectors. However, many did not know much about the company before its recent listing.

However, as a fabless chip designer, EnSilica’s business model relies on licensing out its chip technologies to companies that can use the tech to build semiconductor chips for various purposes.

We still don’t know much about EnSilica, like why it shut down its US operations last year and had to book a £2 million write-off. However, the company generated revenues worth £8.6 million in the financial year ended May 31, 2021, and we will be eagerly waiting for its following earnings result.

The ASIC chip designer has 120 employees at its headquarters in Abingdon and its other UK offices in Sheffield and Wokingham. Despite being a fabless chip designer, the firm also has offices in Brazil and India.

For most semiconductor chip manufacturers, operating without a chip foundry is a strategic decision that saves massive amounts of capital that could be used to build chip foundries and maintain them, which is why the number of fabless chip designers is rising.

Ian Lankshear, EnSilica’s co-founder and CEO, said: “Our quoted status will provide an ideal platform from which to accelerate a number of growth initiatives, which will ultimately further expand both market reach and customer footprint.”

Adding:

“Having developed a reputation of excellence and innovation over the past 21 years, we firmly believe our mixed-signal and RF design and supply capabilities are ideally placed to further capitalise on the significant demand for ASICs across our key markets.”

Meanwhile, we will keep an eye on the company over the coming months to determine whether it is an excellent investment. We will focus specifically on its full-year results for the 12 months ended May 31, 2022, to see if it has fared better than last year.

*This is not investment advice. Always do your due diligence before making investment decisions.