Sondrel wins new design and supply contract

27th Feb 2024 10:22

(Sharecast News) - Semiconductor company Sondrel said on Tuesday that it had won a new design and supply contract for a next-generation video processing chip with a total estimated value of $23.0m across the design, qualification and projected production life of the product.

Sondrel said the complex chip was to be used for high-performance professional video streaming solutions, and that it has entered into a master agreement with the customer, with design work already commencing whilst the parties finalise negotiations.

The AIM-listed group stated the initial contract value was over $9.0m for the duration of the design and qualification phases, with the work to be fully funded by the customer. Chip production and supply were anticipated to start in 2026 and, subject to successful tapeout and qualification of prototypes, the contract was expected to generate roughly $14.0m in production revenues over 10-15 years, based on current customer forecasts.

Sondrel also reported that it has received four new orders for its design consulting services so far in 2024, generating combined revenues of $900,000 in the current financial year.

Chief executive Graham Curren said: "This is a substantial design and supply contract for Sondrel and a demonstration of the group's ability to provide the most complex engineering expertise required for these next-generation technologies.

"The collective new contracts for design consulting services are both an endorsement of our engineering capabilities by existing customers and, for the new ones, a positive indication of a recovery in the semiconductor market as wider macro volatility eases."

As of 1020 GMT, Sondrel shares were down 0.45% at 11.0p.

Reporting by Iain Gilbert at Sharecast.com