Company Overview:
MosChip Technologies Limited is a publicly traded semiconductor and system design services company headquartered in Hyderabad, India, with 1300+ engineers located in Silicon Valley-USA, Hyderabad, Bangalore, Ahmedabad and Pune. MosChip provides turn-key digital and mixed-signal ASICs, design services, SerDes IP, and embedded system design solutions. Over the past 2 decades, MosChip has developed and shipped millions of connectivity ICs. For more information, visit www.moschip.com.
Business units and expertise
Moschip is currently focused on Semiconductor design services, Mixed Signal IP, Turn-key ASIC solutions and Embedded product design services.
Performance Review:
This performance was possible due to the proper vision and strategy of leadership team, efficient execution of operational team and with the support of dedicated employees, which is paving way for the long term sustainable growth. The Company is poised to be part of emerging opportunities by continuing to focus on its inherent strengths in services, turnkey solutions, IP & Training.
The key financial ratios for the FY 2022-2023 in comparison with FY 2021-2022 are mentioned in "Annexure A of Standalone financials" forming part of standalone financials.
Some of the key developments are:
Semi-conductor Industry:
Semiconductors are the key components in every electronic system that includes smartphones, personal computers, Laptops, Communication and networking systems, Medical equipment and Automobiles. Emerging technologies and applications in the areas of 5G communications and Artificial intelligence are further fuelling the growth. Semiconductor industry will benefit from the ongoing innovation and development in connectivity, data centres, communications, automotive, safety & security, infotainment, navigation, home automation, wearable devices, etc. and will continue to see growth in the coming decades.
The global semiconductor market is predicted to experience a downturn of 10.3% in 2023. However, this is anticipated to be followed by a robust recovery, with an estimated growth of 11.9% in 2024.
After observing a modest growth of 3.3% in the year 2022, World Semiconductor Trade Statistics (WSTS) has adjusted its forecast to reflect a more substantial, double-digit decrease in the worldwide semiconductor market for 2023. The estimated market size is projected to reach $515 billion, indicating a decrease of 10.3%.
WSTS has adjusted its growth projections downwards in response to increasing inflation and weakening demand in end markets, particularly those relying on consumer spending. Although two primary categories, discrete and optoelectronics, are predicted to sustain single-digit year-over-year growth in 2023, at 5.6% and 4.6% respectively, other categories are anticipated to shift into negative growth. This includes Memory, which is forecasted to decline by approximately 35% year over year.
For the year 2023, the European and Japanese markets are projected to experience growth, with respective increases of 6.3 and 1.2%. Conversely, the remaining regions are anticipated to face a downturn, with the Americas expected to decline by 9.1% and the Asia Pacific region by 15.1%.
WSTS Forecast summary | ||||||
Spring 2023 | Amounts in US $ M | Year on year growth in % | ||||
2022 | 2023 | 2024 | 2022 | 2023 | 2024 | |
Americas | 1,41,136 | 1,28,236 | 1,50,989 | 16.20 | -9.10 | 17.70 |
Europe | 53,853 | 57,253 | 61,637 | 12.80 | 6.30 | 7.70 |
Japan | 48,158 | 48,724 | 52,534 | 10.20 | 1.20 | 7.80 |
Asia Pacific | 3,30,937 | 2,80,881 | 3,10,838 | -3.50 | -15.10 | 10.70 |
Total world - $ M | 5,74,085 | 5,15,095 | 5,75,997 | 3.30 | -10.30 | 11.80 |
Discrete Semiconductors | 33,993 | 35,904 | 38,192 | 12.00 | 5.60 | 6.40 |
Optoelectronics | 43,908 | 45,949 | 45,881 | 1.20 | 4.60 | -0.10 |
Sensors | 21,782 | 20,410 | 21,575 | 13.70 | -6.30 | 5.70 |
Integrated circuits | 4,74,402 | 4,12,832 | 470349 | 2.50 | -13.00 | 13.90 |
Analog | 88,983 | 83,907 | 88902 | 20.10 | -5.70 | 6.00 |
Micro | 79,073 | 71,470 | 75855 | -1.40 | -9.60 | 6.10 |
Logic | 1,76,578 | 1,73,413 | 185266 | 14.00 | -1.80 | 6.80 |
Memory | 1,29,767 | 84,041 | 120326 | -15.60 | -35.20 | 43.20 |
Total Products $ M | 5,74,085 | 5,15,095 | 5,75,997 | 3.30 | -10.30 | 11.80 |
Note: numbers in the table are rounded of to whole millions of dollars, which may cause totals by region and totals by product group to differ slightly
Source: https://www.electronicspecifier.com/news/analysis/wsts-publishes-latest-semiconductor-market-forecast
DLI Scheme by Govt of India:
Semiconductors are at the heart of all electronic products and constitute a significant share in the Bill of Material (BOM). The National Policy on Electronics 2019 aims to position India as a global hub for Electronics System Design and Manufacturing (ESDM) and envisions creation of a vibrant semiconductor chip design ecosystem in the country. With an exceptional talent pool of 20% of worlds semiconductor design engineers and thousands of chips designed by them every year in the country, India is poised for growth to achieve self-reliance and technology leadership in semiconductor design sector.
Ministry of Electronics and Information technology has announced the Design Linked Incentive (DLI) Scheme to offset the disabilities in the domestic industry involved in semiconductor design in order to not only move up in value-chain but also strengthen the semiconductor chip design ecosystem in the country. CDAC is responsible for implementation of the DLI Scheme as Nodal Agency.
The Design Linked Incentive (DLI) Scheme aims to offer financial incentives as well as design infrastructure support across various stages of development and deployment of semiconductor design(s) for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems & IP Cores and semiconductor linked design(s) over a period of 5 years.
Objectives
During the year the Company has made an application to participate in DLI Scheme, the application is presently under review with CDAC.
SerDes
The SerDes market is expected to reach USD 2540.0 million (source IP Next Market survey report) by 2025 and is projected to capture a healthy compound annual growth rate of 21.7%. SerDes combines the Serializer and De- serializer which are required for high-speed communication to convert the serial data and parallel data while reducing the data lines. Several applications involve huge data transmission operations which require efficiency and speed.
The automotive industry, the demand for the SerDes is rapidly increasing, owing to the deployment of driver safety protocols and cameras to monitor various factors such as monitoring the circumstances during the drive, monitoring the health parameters during the drivers, and so on.
The SerDes IP 5 years forecast is very aggressive: this segment should increase from $114million in 2020 up to $328 million in 2025, with 24% CAGR! (source IP Next Market Survey report) The reasons for such high growth are well-known, linked with the booming demand for more bandwidth in data center and all along the data flow: computing, storage and network.
The overall Indian economy size reaching USD 3.1 trillion and with a target of reaching USD 5.0 trillion by FY26. This growth will be predominantly dominated by manufacturing through reengineering by adopting cutting edge technology, these necessarily calls for a high demand for PAM4 SerDes technology.
We consider a SerDes to be Very High Speed (VHS) when the data rate is equal to 56 Gbps, or more (112 G). Up to 28 Gbps, a SerDes design is following NRZ or PAM2 signaling, when at 56 Gbps and above the signaling is expected to be PAM4 (4 Level Pulse Amplitude Modulation) where every 2 bits are mapped to one symbol.
In summary, the semiconductor industry is on a solid growth path fueled by growth in multiple segments.
Company centric Highlights and Key developments in IoT Segment
MosChips refined focus on Semiconductor design services, Semiconductor IP for connectivity, Turn-key ASIC solutions, Embedded system and software design services, has been yielding steady and consistent growth for the last few quarters.
MosChips concrete efforts to strengthen its technology expertise and broaden its solutions and product engineering services offerings continue to help acquire new customers and additional business with existing customers.
Moschip continues to invest in semiconductor IP for connectivity solutions that includes 16G to 64G for PCIE applications, Ethernet connectivity and high speed data converters. Moschip has been refocusing on turn-key ASIC solutions, leveraging its IP portfolio, design capabilities and established relationships with semiconductor fabs and manufacturing houses.
For and on behalf of the Board of Directors
Place: Hyderabad Date: 21st August, 2023
K. Pradeep Chandra Director and Chairman
DIN: 05345536
Annexure ‘B to the Directors Report Form AOC-1
Statement containing salient features of the financial statement of subsidiaries / associate companies/ joint ventures
(Pursuant to first proviso to sub-section (3) of Section 129 read with Rule 5 of Companies (Accounts) Rules, 2014)
Part "A": Subsidiaries
(Rs. in Lakhs)
Name of the Subsidiary | ||||
MosChip Technologies, USA |
MosChip Institute of Silicon Systems Private Limited | *MosChip Technologies W.L.L |
||
01 | Reporting period | 31 March 2023 | 31 March 2023 | 31 March 2023 |
02 | Functional Currency | USD | INR | BHD |
03 | Exchange Rate | 82.16 | NA | 216.55 |
04 | Equity Share Capital | 1,397.62 | 1.00 | 2.15 |
05 | Reserves & Surplus | (898.84) | (174.42) | (1.78) |
06 | Total Assets | 2,694.62 | 684.63 | 0.36 |
07 | Total Liabilities (excluding Equity Share Capital and Reserves & Surplus) |
2,195.82 | 858.05 | - |
08 | Investments | - | - | - |
09 | Turnover (Total Revenue) | 8,047.75 | 392.37 | - |
10 | Profit / (Loss) Before Taxation | 408.49 | (74.85) | (1.80) |
11 | Tax Expenses | 6.13 | - | - |
12 | Profit / (Loss) After Taxation | 402.36 | (74.85) | - |
13 | Proposed Dividend | - | - | - |
14 | % of Shareholding | 100% | 100% | 100% |
* MosChip Technologies W.L.L., the wholly owned subsidiary of the Company is incorporated in September, 2022.
Names of Subsidiaries which are yet to commence operations: MosChip Technologies W.L.L. Names of Subsidiaries which have been liquidated or sold during the Year: Nil.
Part "B": Associates and Joint Ventures
Statement pursuant to Section 129(3) of the Companies Act, 2013 related to Associate Companies and Joint ventures
There are no associate companies and joint ventures during the current financial year. Names of Associates, which are yet to commence operations: NIL
Names of Associates or joint ventures, which have been liquidated or sold during the year: NIL
For and on behalf of the Board of Directors
Place: Hyderabad Date: 21st August, 2023
K. Pradeep Chandra Director and Chairman
DIN: 05345536
Annexure ‘C to the Directors Report
Disclosure of Remuneration under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
S. | Name | Designation | Ratio of | Percentage |
No. | Remuneration of | increase in | ||
each Director to | Remuneration | |||
Median | during FY | |||
Remuneration of | 2022-2023 | |||
Employees | ||||
1 | Mr. Venkata Sudhakar Simhadri | Managing Director & CEO | 40 | 43% |
2 | Mr. K. Ramachandra Reddy * | Non-Executive Director | NA | NA |
3 | Mr. D. G. Prasad | Independent Director | NA | NA |
4 | Mr. Raja Praturi * | Independent Director | NA | NA |
5 | Mrs. Madhurika Nalluri Venkat | Independent Director | NA | NA |
6 | Mr. Damodar Rao Gummadapu | Non-Executive Director | NA | NA |
7 | Mr. K. Pradeep Chandra | Independent Director | NA | NA |
8 | Mr. Rajeev Krishnamoorthy | Independent Director | NA | NA |
9 | Mr. Jayaram Susarla | Chief Financial Officer | 9.94 | 14 % |
10 | Mr. Suresh Bachalakura | Company Secretary | 2.89 | 12 % |
* Mr. K. Ramachandra Reddy ceased to be a Director w.e.f 1st May 2023 and Mr. Raja Praturi ceased to be a Director w.e.f.12th July, 2022.
The Median Remuneration of the Employees was Rs 8,00,000 and Rs 8,53,400 in the Financial Year 2022- 23 & 2021-22 respectively. Employee head count increased to 926 from 727 as on 31 March 2023 & 31
March 2022.
The average increase in the remuneration of employees excluding KMPs during FY 2022-23 was 14 % and the average increase in the remuneration of Key Managerial Personnel 34 %
** The average increase in remuneration of employees is calculated based on net employee benefit expenses disclosed in P&L statement.
Based on the recommendations of the Nomination and Remuneration Committee and as per the Remuneration Policy of the Company.
The remuneration of Directors was as per the Remuneration Policy of the Company.
For and on behalf of the Board of Directors
K. Pradeep Chandra
Place: Hyderabad Director and Chairman
Date: 21st August, 2023 DIN: 05345536
Annexure ‘D to the Directors report
Disclosure of Employee Stock options pursuant to Regulation 14 of SEBI (Share Based Employee Benefits & Sweat Equity) Regulations, 2021
S. No. |
Name of ESOP Scheme | No. of ESOPs | Date of shareholders approval |
01 | MosChip Stock Option Plan 2005 (MI) | 5,00,000 | 30th September, 2005 |
02 | MosChip Stock Option Plan 2005 (WoS) | 5,00,000 | 30th September, 2005 |
03 | MosChip Stock Option Plan 2008 | 30,00,000 | 29th August, 2008 |
04 | MosChip Stock Option Plan 2008 (ALR) | 10,00,000 | 29th August, 2008 |
05 | MosChip Stock Option Plan 2008 (DIR) | 10,00,000 | 29th August, 2008 |
06 | MosChip Stock Option Plan 2018 | 1,00,00,000 | 17th January, 2019 |
07 | MosChip Stock Option Plan 2022 | 1,00,00,000 | 27th June, 2022 |
Particulars | MosChip Stock Option Plan 2008 | Moschip Stock Option Plan 2005 (MI) | Moschip Stock Option Plan 2005 (WOS) | Moschip Stock Option Plan 2008 (ALR) | Moschip Stock Option Plan 2008 (Director) | MosChip Stock Option Plan 2018 | MosChip Stock Option Plan 2022 |
Options outstanding at the beginning of the year |
10,55,089 | 1,31,619 | 2,86,250 | 6,05,334 | 10,00,000 | 79,20,449 | 0 |
Granted during the year | 1,56,500 | - | 45,070 | - | - | 18,66,975 | 67,68,092 |
Forfeited during the year | 76,250 | - | 12,000 | 38,585 | - | 13,03,233 | 3,46,420 |
Exercised during the year | 2,85,872 | 31,666 | 13,750 | 1,98,288 | - | 10,79,014 | - |
Options outstanding at the end of the year |
8,49,467 | 99,953 | 3,05,570 | 3,68,461 | 10,00,000 | 74,05,177 | 64,21,672 |
31st March, 2023 |
|||
Grant Date | Vesting Period | Exercise price | Share options outstanding |
26-Oct-18 | 4 Years |
18.00 | 12,80,000 |
20-Jul-20 | 3 Years |
16.00 | 34,85,348 |
25-Jan-21 | 4 Years |
16.00 | 3,00,000 |
27-Apr-21 | 4 Years |
18.00 | 1,12,500 |
20-Jul-21 | 4 Years |
24.00 | 14,06,125 |
20-Oct-21 | 4 Years |
31.28 | 1,07,500 |
17-Jan-22 | 4 Years |
40.00 | 13,70,000 |
28-Apr-22 | 4 Years |
40.00 | 2,30,575 |
14-Jul-22 | 4 Years |
40.00 | 4,47,010 |
25-Oct-22 | 4 Years |
40.00 | 70,21,030 |
25-Jan-23 | 4 Years |
40.00 | 6,90,212 |
The model inputs for options granted during the year ended 31 March 2023 included:
Grant Date | Vesting Period | Expiry Date | Excise Price | Share Price at Grant date | Expected price volatility of the companys shares | Expected dividend yield | Risk free interest rate |
26-Oct-18 | 4 Years | 26-Oct-25 | 18.00 | 23.50 | 53% | - | 8.04% |
20-Jul-20 | 3 Years | 20-Jul-26 | 16.00 | 14.80 | 55% | - | 4.55% |
25-Jan-21 | 4 Years | 25-Jan-28 | 16.00 | 15.00 | 61% | - | 4.58% |
27-Apr-21 | 4 Years | 27-Apr-28 | 18.00 | 30.85 | 60% | - | 4.58% |
20-Jul-21 | 4 Years | 20-Jul-28 | 24.00 | 44.96 | 68% | - | 4.58% |
20-Oct-21 | 4 Years | 20-Oct-28 | 31.28 | 47.55 | 66% | - | 4.58% |
17-Jan-22 | 4 Years | 17-Jan-29 | 40.00 | 81.05 | 68% | - | 5.21% |
28-Apr-22 | 4 Years | 28-Apr-29 | 40.00 | 62.60 | 66% | - | 5.31% |
14-Jul-22 | 4 Years | 14-Jul-29 | 40.00 | 54.35 | 67% | - | 5.37% |
25-Oct-22 | 4 Years | 25-Oct-29 | 40.00 | 67.50 | 58% | - | 7.13% |
25-Jan-23 | 4 Years | 25-Jan-30 | 40.00 | 66.33 | 55% | - | 7.06% |
Number of options exercised during the year | 16,08,590 |
Number of shares arising as a result of exercise of options | 16,08,590 |
Money realized by exercise of options (INR), if scheme is implemented directly by the company. | Rs. 2,87,98,140 |
Mr. Jayaram Susarla : 5,00,000 Mr. Venkata Sudhakar Simhadri : Nil
Mr. A J N Rao : 3,00,000
Mr. Suresh Varma : 3,00,000 Mr. Srinivasa Rao Kakamanu : 7,00,000 Mr. Giri Babu Kondaveeti : 3,00,000
Mr. Suresh Bachalakura : 42,000
Mr. Jayaram Susarla : 5,00,000 Mr. Srinivasa Rao Kakamanu : 7,00,000
The Board of Directors hereby confirms that there are no material change(s) in any of the seven schemes under Employee Stock Option Plans in operation during the year and all the scheme(s) are in compliance with SEBI (Share Based Employee Benefits & Sweat Equity) Regulations, 2021. The disclosures as required under Regulation 14 of SEBI (Share Based Employee Benefits & Sweat Equity) Regulations, 2021 has been uploaded on the website of the Company at www.moschip.com.
For and on behalf of the Board of Directors
Place: Hyderabad Date: 21st August, 2023
K. Pradeep Chandra Director and Chairman
DIN: 05345536
www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.
Copyright © IIFL Securities Ltd. All rights Reserved.
Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213, IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248
This certificate demonstrates that IIFL as an organization has defined and put in place best-practice information security processes.
www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.
Copyright © IIFL Securities Ltd. All rights Reserved.
Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213, IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248
This certificate demonstrates that IIFL as an organization has defined and put in place best-practice information security processes.