Hero Electronix’s Tessolve acquires German chip design firm for ₹400 crore | Mint

Semiconductor design company Tessolve, owned by Hero Electronix, has acquired Germany’s Dream Chip Technologies for ₹400 crore, in a deal that would enable the Bengaluru-based technology firm design more complex processors and give it a competitive edge.

The deal strengthens Tessolve’s design capabilities, besides giving it a much better access to European markets. “We are about 30-plus employees in Europe and with this acquisition we’ll have a much larger presence,” Tessolve co-founder and CEO Srini Chinamilli told Mint.

Dream Chip undertakes chip design or system-on-chip design for artificial intelligence (AI), automotive, data centre, and industrial markets. “The hottest topic currently in Germany is the autonomous driving where we can help the automotive industry to innovate even faster to stay competitive on the worldwide market,” said Jens Benndorf, CEO of Dream Chip Technologies.

Dream Chip to continue to operate as separate brand

The acquisition is an all-cash deal, and Dream Chip will continue to operate as a separate brand as Tessolve’s arm. Tessolve will provide a platform with a larger global reach and engineering bandwidth, which in turn will help the German firm take up much larger projects and give them a better sales reach.

The acquisition will also expand Tessolve’s European operations by adding four delivery locations across Germany and the Netherlands. This is Tessolve’s sixth acquisition in the last 10 years, largely aimed at gaining quality of people and capability additions, rather than revenue maximisation.

Ujjwal Munjal, chairman of Tessolve, said in a statement: “With the synergy brought by Dream Chip Technologies, I am confident that Tessolve is poised to become a world leader in this space with unparalleled capabilities. As major companies increasingly shift towards custom chip design, this acquisition positions Tessolve more strongly than ever to meet the growing demands of the custom chip market.”

The Hero Group-owned company, which designs, tests and produces semiconductor chips in 10 countries for 80% of the world’s 20 largest semiconductor firms, is expanding operations globally. It recently opened labs in the US, Singapore and India, and plans centres in tier-II cities across the country.

Tessolve’s solutions help semiconductor manufacturing and packaging companies to accelerate their products to market, as it removes the need for them to make their own investments into design, engineering and testing chips that may be used in a variety of sectors including automotive and power management, besides those used in AI applications, electric vehicles and data centres.

Mint had reported in July that Tessolve closed FY24 with ₹1,000 crore revenue and expected to grow 20% in FY25 on the back of demand coming from India where several companies are setting up testing and packaging units, besides the country’s first fabrication unit being set up by Tata Electronics.