SND.L Regulatory News (SND)

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:

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.