REG - Sondrel (Holdings) - New Contract Win and Corporate Update

Sondrel (Holdings)Announcement

27/02/2024 07:00

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RNS Number : 5215E  Sondrel (Holdings) plc  27 February 2024

 

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the UK Market Abuse
Regulation

 

27 February 2024

Sondrel (Holdings) plc

("Sondrel", the "Company" and together with its subsidiaries the "Group")

 

New Contract Win and Corporate Update

 

 Sondrel Awarded Material Video Processing ASIC design and supply contract
for a leading provider of High-Performance Video systems

 

Sondrel (AIM: SND), a leading provider of ultra-complex chips for leading
global technology brands, is pleased to announce that it has won a new design
and supply contract for a next generation video processing chip with a total
estimated value of US$23 million across the design, qualification and
projected production life of the product.

 

The complex chip is to be used for high performance professional video
streaming solutions. The Company has entered into the master agreement with
the customer and design work has commenced whilst the parties finalise
negotiations to the exhibits to the agreement.

 

The initial contract value is for over US$9 million for the duration of the
design and qualification phases and the work will be fully funded by the
customer.

 

Chip production and supply are anticipated to start in 2026 and, subject to
successful tapeout and qualification of prototypes, the contract is expected
to generate production revenue of US$14 million, over 10 to 15 year production
lifetime of the product, based on current customer forecasts.

 

The Company also reports that it has received four new orders in 2024 year to
date for its design consulting services, engaging with two existing customers
and two new customers. These contracts will generate a combined revenue of
US$0.9 million in the current financial year.

 

Further to the announcement on 5 February 2024, negotiations with the
Company's largest supplier to improve the terms of existing and future supply
arrangements are now well advanced and have secured an agreement in principle.
Discussions with other suppliers are positive and remain ongoing.
Notwithstanding the progress made, negotiations with the Company's largest
supplier have been slower than originally anticipated and the Group will now
require additional capital by the end of February 2024, in order to inter
alia, meet payroll and other short-term working capital requirements. The
Company is in advanced discussions with a potential provider of capital which
would serve to extend this working capital runway.

 

Graham Curren, Chief Executive Officer of Sondrel, commented:

 

"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. We're delighted to
partner with one of the leading manufacturers in the high growth video
streaming market, where the constant innovation and focus on efficiency is
driving demand for complex chips like Sondrel's".

 

"Furthermore, 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. We look forward to providing further
updates in due course."

 

 

For further information:

 

 Sondrel (Holdings) plc                                        Via Buchanan
 Graham Curren, CEO                                            Tel: +44 (0) 20 7466 5000
 Nick Stone, Interim CFO

 Cavendish Capital Markets Limited                             Tel: +44 (0) 20 7220 0500
 Ben Jeynes / Katy Birkin / George Lawson - Corporate Finance
 Michael Johnson - Sales

 Buchanan Communications                                       Tel: +44 (0) 20 7466 5000
 Chris Lane / Stephanie Whitmore / Abby Gilchrist              sondrel@buchanan.uk.com (mailto:sondrel@buchanan.uk.com)

 

About Sondrel

Sondrel is a UK-based fabless semiconductor company specialising in high end,
complex digital Application Specific Integrated Circuits (ASICs) and System on
Chips (SOCs). It provides a full turnkey service in the design, prototyping,
testing, packaging and production of ASICs and SoCs.

 

The Company is one of only a few companies capable of designing and supplying
the higher-spec chips built on the most advanced semiconductor technologies,
selling into a range of hyper growth end markets such as high-performance
computing, automotive, artificial intelligence, VR/AR, video analytics, image
processing, mobile networking and data centres.  Sondrel designs have enabled
products by leading technology brands including Apple (iPhone), Sony
(PlayStation), Meta's (Oculus), Samsung, Google and Sony smartphones, JVC
(prosumer camcorders), Tesla and Mercedes-Benz cars.

 

Sondrel is well-established, with a 20-year track record of successful
delivery, supported by long standing ecosystem partnerships including Arm,
TSMC and Samsung. Headquartered in the UK, Sondrel has a global presence with
offices in UK, USA, China, India and Morocco.

 

For more information please visit: ir.sondrel.com
(http://www.ir.sondrel.com/) .

 

 

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