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(Sharecast News) - EnSilica announced on Thursday that it has signed a binding memorandum of understanding with a major European satellite operator to support its chipset needs, including a feasibility study for a planned satellite payload ASIC, the company announced.
The AIM-traded firm said the contract, starting this month, would generate non-recurring engineering revenue across EnSilica's current and next financial years.
A successful outcome could lead to a significant ASIC development project for use in a communications satellite payload.
EnSilica operates a specialist business unit focused on radio frequency and communications technologies, with experience in ASICs for satellite payloads, user terminals, modems, and positioning and timing receivers.
The board said it expected growing market activity in those areas, driven by rising demand from defence and government clients amid heightened geopolitical tensions.
"We're delighted to announce this significant agreement with one of Europe's leading satellite operators focused on developing a specialist chip to be used in a satellite payload, starting with a feasibility study," said chief executive officer Ian Lankshear.
"This custom chip is intended to provide key differentiation to the satellite operator's services, enhancing its market offering."
Lankshear said the satellite communications sector had "significant" private and government investments, driven in part by the current geopolitical instability, with chips as integral components of technologies used for defence and government purposes.
"EnSilica will continue to explore commercial opportunities across this rapidly growing market."
At 1210 BST, shares in EnSilica were up 7.66% at 34.99p.
Reporting by Josh White for Sharecast.com.
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