Good afternoon, ladies and gentlemen, and welcome to the EnSilica PLC investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged; they can be submitted at any time via the Q&A tab that's just situated on the right-hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself; however, the company can review all questions submitted today, and we'll publish those responses where it's appropriate to do so on the Investor Meet Company platform. Before we begin, I would like to submit the following poll, and if you could give that your kind attention, I'm sure the company would be most grateful. I would now like to hand you over to the executive management team from EnSilica PLC. Ian, good afternoon, sir.
Good afternoon. Welcome everyone to EnSilica's interim results. That's for the period ending the 30th of November, 2023. And the usual disclaimer, and I'll just move on to the introductions. I'm Ian Lankshear, CEO and co-founder. My background: I'm an electronics engineer. I started my career at Plessey Radar, working in the defense sector. And I moved into semiconductors in the mid-90s, working for Hitachi and subsequently Nokia. I founded EnSilica in 2001, and in 2016, I met Mark, who joined us to help us with our growth. And I'll let Mark introduce himself.
Hi. I'm a graduate of Manchester University and a chartered accountant. I was formerly a partner with both Grant Thornton and Ernst & Young, but left the profession in 2005. I've been CEO or CFO of a number of engineering businesses since that time, including Sellers publicly listed CFO.
Okay. Just to sort of summarize, EnSilica, as I said, we were established in 2001, initially as a consultancy for helping companies develop ASICs. So our clients include companies like Nokia, my previous employer, Arm, Dialog Semiconductor, Wolfson, Panasonic, and Sony. So in 2016, I worked with Mark to change our model to one of a fabless ASIC company. So in this model, the design cost—that's the cost of developing the ASICs. You'll hear referred to that as the NRE, non-recurring engineering costs—are shared with the customer. But unlike consultancy, you get a recurring long-term revenue stream through selling the chips as they enter into production. So today we have three chips in the supply stage. One of these is an ASIC for a high-end vehicle that started production in 2022.
The anticipated revenue on that is GBP 40 million over 6 years. And we also have 6 chips in the design stage, with—seven chips in the design stage. And we're ex—you know, they will start production from sort of 2024. This includes an industrial ASIC, which we'll launch for production at the end of this year with anticipated revenue of 30 million over 7 years. So yeah, in terms of the business model, it generates long-term recurring revenue from the development of selling these chips. Near-term cash flows, we still use selective consultancy work to help the near-term cash flow.
So here are the half the highlights from the half-year results. Revenues are up 11%, which is broadly in line with what we were anticipating. Operating profit is down compared to last year, but that reflects quite a significant amount of investment that we made in the since last year. Last year's first half results were the first half post-IPO. And since then, we've invested heavily in sales and marketing and also research and design. And that's the reason for the fall in the profitability. And it's the same reason that the EBITDA is lower. But as you can see, profit after tax is higher, 60% higher. That is a consequence. That also reflects the investment we've made in new business because we have to treat the R&D tax credit from HMRC on the tax line, so it becomes below the line.
That was 2.2—sorry—1.4 for the half-year this year. That is why the profit after tax is so much better than the operating profit. That has a consequent impact on EPS, of course. The cash at the end of November was GBP 2.1 million. Cash last night was just about GBP 1 million. So current trading, as I've just said, revenues are up 11%. The growth was across all, all, all revenue streams, which I'll go through in a little while. We, during the year, we had two NRE projects that went through the tape-out process. That's the process at the end of the design phase before we go into supply. It's important to be aware of these tape-outs. We're a relatively small company still, and they're quite big lumps of revenue.
They tend to depress the margin, although, as you'll see in a moment, the margin is up. But nonetheless, they do get depressed a little bit by tape-out. That's an impact that will not affect us so much as we get larger. But I'm pleased to say that we're getting some history now, and we can report on annual recurring revenues. And we expect annual recurring revenues for the current financial year to be GBP 12 million. And last year, it was GBP 6 million. During the period, we won a couple of supply contracts, plus one upgrade of a contract, and they were worth $57 million in terms of future order work. And I wanted to say, and we need to report, that we're trading in line with market expectations for financial year 2024. The outlook is good.
Activity is very, very, very good. We're getting a lot of inquiries. Revenues are ramping up. Supply revenues are increasing. We expect annual recurring revenues to increase and even commensurate with the economies of scale. Committed future annual recurring revenue is now valued at $73 million. And importantly, our pipeline, which includes opportunities as well as orders, is now $512 million. So looking at the income statement in a bit more detail, as I've just said, the revenues are up 11%. We'll look at the revenue streams in a second. Gross margins have improved. That's after the impacts of the tape-out, which I mentioned on the previous slide. And the impact on operating profit compared to last year is, as I said before. Interest is still a burden. We funded the business from 2018 through to IPO with a debt package. It's an unsecured debt package.
It looked quite expensive at the time. It doesn't look quite so expensive today with the increasing interest rates. But that's why we have a relatively high interest charge. The tax credit represents the benefits of the R&D tax credit scheme. And I've talked about EBITDA and PAT already. Split of the revenues. You might expect the chip supply revenues to be higher in 2024 than 2023. In actual fact, the first half of 2023 was still impacted by COVID, and we had a number of customers who were ordering ahead of schedule. So that inflated not only our working capital because debtors went up, but also our revenues. That's normalized now. And the lower number is still reflective of growth on what we consider to be the core contracts that make up our supply revenues. NRE has increased.
That reflects the increasing amount of work that we're doing for new customers. When we come on to look at the balance sheet, you'll see that our investment in new work is increasing quite nicely. So the total revenue from our fabless model is up over the year, which is what we wanted to see. That's what we focus on. But it's also important to recognize that consultancy revenues have held up very well. We don't actively go out to develop this business strategically. But we've, as Ian said in the introduction, got some very high-quality customers who have used us for many, many years, and they keep ringing us up, asking us to do work. And it's useful for us because in working for other people, we learn new IP that we can incorporate into our own IP.
So it allows us to develop. It allows our staff to have exposure to different methodologies and different ideas. So we think it's worth continuing with consultancy. It also is relatively low. It's very. It doesn't consume much working capital, and cash flow is beneficial. It also smooths out the business. The supply business, when you're quite small, is quite lumpy, and the consultancy revenues smooth it out somewhat. So looking at the balance sheet, and you can see on the right-hand side at the top what the intangible assets were in May. They were GBP 12.4 million, and they're now GBP 15.2 million. Sorry. And that represents a 50% increase on the investment in intangible assets from last year for the six-month period.
That reflects the large number of interested parties we've now attracting and asking us to do study work or in to start new work on a new chip. Cash is better this year than last year. Last year's cash was impacted by the increase in working capital, consumption of working capital due to the unusual buying patterns of our customers. We squeezed GBP 1.6 million out of working capital during the period, which allowed us to improve our cash position. Our debt is reduced. We continue to reduce the debt that we mentioned earlier, by about GBP 600,000 in the half. That will continue. Net debt has increased mainly because the cash balances this year have changed. So cash flow, you can see the profit for the period of GBP 515.
Cash generated from operations is GBP 2.2 million. That reflects the squeezing out of working capital of about GBP 1.6 million. The tax accrual for receipts this year is GBP 1.4 million. This half-year is GBP 1.4 million. And so we're generating net cash from operations of GBP 3.6 million. And it's important to recognize the importance of the R&D tax claim in this. Our business model is based upon that process continuing, which it seems to be doing. There's no hints of it not being continued, although I can tell you that they are very slow in paying the tax credit. We've not yet received the tax credit for last year. I think that's finished that slide.
Okay. Thanks, thanks, Mark. I mean, I'll just touch on some of the sort of key, key opportunities we've got going ahead. So I'm particularly design and supply. So just as a, a reminder, sort of, you know, design and supply is where we have the, the, the NRE, the design cost funded or part-funded by the, the customer. And then, then we get long-term revenue from, from the sale of the chip. You know, we've secured a, a study phase for a very high-volume industrial ASIC. The contract, as I said, is material. It replaces an existing chip with, with known volumes. As I said, the, the customer funded us to do the, the study phase. And EnSilica has previous sector experience. So we believe we have a good, a good probability, a very high probability of winning, winning this material contract.
So we've also entered into a binding letter of intent, you know, subject to the contract completion later this year for a telecommunications infrastructure ASIC. Again, this is a material contract with lifetime value of GBP 35 million. The RNS for that went out in December, at the end of December, probably the worst date ever for being recognized by the market. And again, the design costs are funded by the customer. So both of those very significant strategic design and supply projects. Can we move on to another one, which is supply only? I mean, we talked about design and supply. But when a customer actually develops a chip, they don't always have direct foundry access. If they're not used to taping out, they would go through what's called a channel partner.
As you know, Elke Snijder is now established as a channel partner for one of the large fabs. And they, a large US electronics company, you know, we're very close to being selected for that and doing the manufacturing services related to supplying the wafers. It's a material volume, albeit lower margins than if you've done the design and put IP in it. But there are some upsides on this. You know, it will open business to other work, particularly in the United States. And we also expect it to improve our margins on our design and supply chips because we're increasing our wafer purchasing power. You know, it will strengthen our position within the supply chain and within that fab. So all in all, you know, very positive.
You know, that will drive revenues in 2025, 2026, and beyond. Just some business we've got with existing customers. We talked about the automotive chip that went into production in June 2022, you know, just after we IPOed. That's for our high-end vehicle. We're 24 chips per vehicle in one particular model. It, in the following May, we announced that we had that chip designed into existing models. So that increases the revenue expectations for that chip for GBP 40 million over the coming six years. So this does require us to further invest in the supply chain and actually, you know, increase our, particularly our testing capacity to move that to the, to have increased capacity in the Far East.
So there'll be an investment, which is about reducing the test time, which is the test cost. And that will improve our competitiveness on the on the on that particular chip as well. We talked about the channel partner status with the with the foundries. You know, now Elke Snijder is a foundry partner, this will enable us to execute tape-out and wafer business with our existing customers where when where they may be using other other methods of accessing accessing the foundry. So this would really help our service customers and and add a recurring revenue element on some of the the service ones through through wafer supply or even even even full supply. So Mark talked about design services and the significance of that.
I mean, we have a significant design service project, $3.8 million with the European Industrial Semiconductor Company. We're already working on the study phase to define the chip, and we have submitted the proposal. And this is not only design service. It's also, it encompasses IP licensing within that as well. And moving on to our IP, I mean, we have a strong IP portfolio that really addresses our focus segments. And that includes cryptography. And I mean, cryptography is one of those areas which goes across multiple segments, including automotive, industrial, and communications. They're all things that need cryptography. So we have IP in a cryptography area, radar, particularly focused on automotive radar, healthcare, and communication systems. We develop the IP we license to semiconductor companies.
But we also leverage the IP on our supply ASICs, making us, you know, more competitive and actually showing our, you know, that we've got key differentiation by being able to supply the IP ourselves. So you know, as an example, we recently licensed our post-quantum cryptography IP, which is PQC, to a world-leading semiconductor company. And this is a pretty key IP. And this is a new version of cryptography, which is designed to be robust to quantum computers. And, you know, we expect to see other licenses for that IP in the future. I'll hand over to Mark to do the sweet cake.
Yeah. So in summary, then, our investment case is that we think we've delivered good financial and operational growth since the IPO. You know, we could always do better. But I think we've done pretty good. We've beaten the plans that we had at IPO. We've successfully engaged across the automotive sector, the industrial sector, healthcare, and satellite communications. The business model we've got, the ASIC supply model is a proven model and is now scaling. And we'll see an increase in recurring revenues over the coming months. And it's underpinned by our own IP and by current project revenues that we've secured. The management team is experienced. We've got a lot of people here who've been doing this for a very long time. And we're set to accelerate our embedded growth strategy.
The further development of our significant pipeline and order book, it is imminent and is now valued at $512 million. So that's our update to you all. Very happy to take some questions.
Perfect, Mark, Ian. Thank you very much indeed for your presentation this afternoon. If I may just jump back in there before we move to questions. Ladies and gentlemen, please do continue to submit your questions just by using the Q&A tab that's situated on the right-hand corner of your screen. But just while the team take a few moments to review those questions that were submitted already, I would like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A, can be accessed via your investor dashboard. Ian, Mark, as you can see there in the Q&A tab, we have received a number of questions from investors during the call. Thank you to all of those on the call for taking the time to submit their questions.
Ian, Mark, if I may just hand back to you just to read out those questions and give your responses where it's appropriate to do so. Then I'll pick up from you at the end. Thank you.
Okay. Well, the first question that's on the list is, as follows: With the market being focused on artificial intelligence, is this an area you will be developing with your chips?
I'll take that one. Yeah. I mean, very much so. I mean, obviously, NVIDIA has been in the press. I mean, shares are very, very strong there. So NVIDIA are really based on, you know, cloud-based AI. So that's where, you know, you have your AI computing power, in, you know, in server rooms. But there's a whole area of AI really called AI at the edge. And what we're seeing now is really, you know, chips which are at the edge, which they need a combination of mixed signal sensors for sensing the real world, but also, you know, digital AI engines for making artificial intelligence machine learning-based decisions. So those AI chips that have been used at the edge, I mean, they need, you know, they need machine learning accelerators.
and that, I mean, that's a whole area where you're using Arm for using IP from companies like Arm, you know, incorporating those in the chips to allow them to be AI ready. And it's important that they have the computing power at the edge because, you know, for applications like automotive, industrial, you know, you can't always rely on getting the connectivity to the cloud. And they also need to make these decisions in real time. So, you know, a real opportunity for us, you know, and one where we're well-equipped to play in it.
The next question is from Marcus A. The question is: What are the key strategic goals for the next 12-24 months? And what KPIs should I use to measure progress? I think the answer to that is, our primary strategic goal is to increase recurring revenues. So look out for contract wins that increase recurring revenues. The reason why that's important is, as we improve that, we will generate more cash. And we will be able to fund our own development there. So focus on the winning of new supply contracts and on maintenance of the gross margin, which we hope to improve above the 43% we've reported today. The next question is from Harvey R. Is how much of the $512 million is contracted? Currently, just under $100 million is contracted.
The second question, the next question, is also from Harvey R. How much investment in working capital would you need to deliver this? Well, as it's mentioned before, we won't take all that work on. That's the work that has been brought to us that we will assess. Our model is based on working on two new contracts a year. So we won't overwork those contracts. But we think that we have got sufficient working capital to be generated from our supply revenues to be self-financing, from the back end of 2024, early 2025. But if it's difficult to be specific about how much working capital because it depends how much of that is NRE, how much is funded by the customer, and how much of it is supply revenues. It's something that's under constant review.
The next question is from Andrew M. With contracts and opportunities across different regions, how do you manage regulatory, currency, and operational risks associated with international expansion?
So we're well, I mean, I can't know. We've been doing, you know, majority exports since, you know, since we started. So I mean, we're very used to dealing with, you know, with currency risks and, you know, international trade. So, you know, we, I mean, it's not nothing new to us. I mean, our main currency for most things is US dollars, as you see. And we even quote our pipeline in US dollars.
We also take a lot of advice from professional firms about tax planning and regulatory advice. We've got lawyers in each of the countries that we do business in that can assist us in supporting that. The next question is from Harvey R. And the question is: Can you give us a bit more detail on the quantum of the late cash payments for the tax credit, etc.? So I can. The gross R&D tax credit from His Majesty's Revenue and Customs was GBP 2.1 million, which they have not paid. We have financed part of it, but there's a shortfall of about GBP 700,000. In addition, we've got two customers that have not paid, one as a consequence of the war in Gaza where the company's having difficulty getting hold of the dollars to pay us.
The other one is because they're waiting for a European Union grant. So that's the nature of the difficulties. Well, the difficulty with the tax credit was really that the government, the Inland Revenue, did not tell us that they thought there was a problem with our claim. They told us three months late. If we'd have known in a shorter timeframe, we could have dealt with it. In actual fact, there was nothing wrong with our claim. And it was their error in assessing our claim that was wrong. And then we've checked that with our professional advisors, a company called Leyton who've been working with us for 15 years. We've never had a claim rejected or questioned before.
We've remonstrated quite hard with HMRC and are hopeful of receiving the cash that they owe us in the next two or three weeks. It's, but it's been very annoying. The next question is from Rob B. It says: Hi, guys. What proportion of your revenue relates to consulting services? Is that likely to be a key component of revenue going forward? Thank you. So we think the revenues for consulting services this year will be about GBP 8 million-GBP 9 million out of a total of GBP 22.9 million. So it's about 40%. But we anticipate that that number will stay the revenue line will stay level for consulting services, GBP 8 million or GBP 9 million. But it will gradually become a smaller and smaller proportion of our total revenue. I hope that answers the question. But I don't mind taking a follow-up if you've got one.
The next question is from Harvey R. Has the commercial ramp of Starlink been a catalyst for others to invest?
Yes. Yeah. I mean, very I mean, very much so. I think what Starlink has really proved is the need for a robust, satellite-based, you know, broadband connectivity. And I mean, that's both for government usage but generally across the board. So, you know, certainly the EU are investing in one called IRIS², which is, you know, their own constellation. I mean, people are probably aware the UK government invested in OneWeb, which has now merged with another company. And there are other constellations as well. So satellite communication is one of our focus areas. We've got a lot of core IP there. I mean, we've been backed by the European Space Agency and the UK Space Agency to develop some differentiated technology in that area.
So, you know, definitely, as you know, people are investing in these new constellations. We're, you know, well-placed, you know, as they roll out to be shipping the you know, the chips that they need.
Next question is from Steve B. What is the timeframe from initial phase to real revenues? I presume by real revenues, you mean supply revenues. Do you wanna answer that? I mean, go ahead.
Yeah. I mean, certainly I said that. I mean, we, you know, we've started supply revenue. And they, you know, they lack the design revenue, you know, depending on the project by 2-5 years. So there, so we started this you know, we started this business, this sort of supply business in 2016. We had our first contracts 2017, 2018. And they're in you know, they're reaching supply now. And, you know, we see sort of, you know, 2024 and 2025, you know, is where those 7 chips we've got in the design stage are moving into supply stage. So things will really wrap up in those years.
You'll see from Allenby's notes that 2025 revenue the revenues for 2025 next year are just over GBP 30 million, which is a significant increase on this year's GBP 22.9 million. The next question is from Harvey R. We haven't got a breakdown to hand of the GBP 512 million opportunities pipeline, but we're happy to provide that at another time. So I'm sorry. I can't I can't answer that at the moment.
Yeah. Yeah. Yeah. I mean, I can just comment. I mean, they're very, you know, in terms of sat, you know, satcoms, telecoms, and automotive, industrial, probably the gears are fairly equally split between those three, slightly lower on the healthcare side. So but, you know, those three sectors I mentioned, you know, we've got very strong opportunities in those areas.
Next question is from Steve B. and the question is: Does AI impact on the design timeframe?
I mean, not from the point of view of the, I mean, of the hardware. I mean, in terms of adding machine learning engines, there's existing IP in there. So, you know, in terms of people add AI capabilities into chips through, either a machine learning engine or through actually having a what they call a GPU, accelerator on the chip, general processing unit accelerator, similar to those that you would, you know, you NVIDIA Imagination Technologies, etc., would do. So, you know, it doesn't take any longer to implement AI functionality into into chips.
That second question, we can't answer that question. I'm sorry. Okay. That further question from Steve B. When do you see the group becoming cash flow positive? Is another fundraising anticipated? Well, you'll have read that we're looking doing some working capital financing at the present time. And, obviously, all options are always on the table. But we see the group becoming cash flow positive around about 12 months from now. We've got a big chip going into supply the back end of this year, early next year. And that will change the cash flow profile quite significantly. Okay. Another question from Steve B. What gross margin do you anticipate on supply contracts? It's variable. But we're aiming for a 45%+. It tends to be lower to start with. And we can ramp it up as we go along.
The margin you see reported today is a blend of margins from supply, consultancy and NRE. You just scroll down. Yeah. The next question is from Tom L. and the question is: Does foundry partners taking you overseas, e.g., the USA, reduce your requirements to highest sales staff in the territory?
Yeah. I mean, in the US, we have sales reps there that are very experienced in this area. And, you know, we have offices in Brazil. And we can support that from the UK. So there is no plan to put direct sales staff, you know, particularly in the US at the moment. We believe we can support those opportunities from the time zones we, you know, we're already working and using our sales reps.
This is a question from Bob L. Can you please update us on the investment/technology priorities of your target and existing customers? How has the semiconductor prioritization of AI affected customers and competitors, including any impact on pricing pressure? That's a big question, Bob.
Yeah. I'm not sure how to answer that one. But, you know, there, I said that I mean, in terms of chips and chip functionality, I mean, you know, AI is another feature, having AI accelerators. So, you know, it does. Technology node that it goes on. So you have to, you know, the AI is quite memory-intensive. It's quite logic-intensive. So you end up having to move into newer node technologies, things like 16 and 7 and 7 nanometers. So that increases the investment a customer has to make in developing a chip. I probably haven't answered all the aspects. But, you know, I mean, that's the interesting side of AI.
You know, we have the capabilities to design in these advanced node technologies, both on the digital side but also on the mixed signal and the RF side, which is a key differentiator for us.
Next question is from Gary R. How are you finding recruitment of suitably qualified engineers to support development of your chips?
Hiring good engineers is all, you know, it's always been a challenge. But, I mean, we're, you know, we're, we've got a very strong graduate program working on where we're looking to bring in, you know, fresh talent out of universities. And we, you know, we are based in, you know, the U.K. We've got location in Brazil and India. So, you know, we are feeding through, you know, qualified engineers through those locations. So we're, you know, I mean, we're fine at the moment. But, you know, we need to work hard. Our staff are our key asset. Yeah.
The next question is from Dan R. It is: Regarding the IP licensing component, do you expect IP licensing activities to grow in addition to the fabless chip design activities? How important is it to the overall growth strategy?
I mean, it's not a key part of the growth strategy. I mean, we have a large portfolio of IP. And some of that IP, we make available for external licensing. I mean, we have other elements which would be harder to support that we don't offer for licensing. So, you know, if I remember correctly from the Allenby note, it was about sort of GBP 200,000 last year, relatively small amount. But, I mean, particularly with some of the unique IP we've got, you know, I can see that increasing. But it's not a strategic focus. But it's, you know, it's all welcome high-margin revenue.
Thank you from Bob L. How do you prioritize your limited engineering resources? Do you regularly turn away consulting projects to ensure enough capacity for fabless revenues? Has the recruitment environment improved given the distress of a peer?
Okay. What do you say? Yeah. I mean, generally, the semiconductors were down last year. I think about 10% in their sector. But, you know, which has softened the demand for engineers as a lot of the bigger companies have some cutbacks. But, you know, the estimate is gonna be up this year, which may increase the demand for engineers as it sort of tends to feed through.
So we, you know, we do look at the consultancy projects very carefully and look at ones that are, you know, either with strategic, say, strategic IP partners where we can learn about their IP and do it all or in a you know, in particular areas where we believe we can offer some real value and even bring in our IP into the, into the consultancy plan. But, I mean, obviously, we, you know, we, we do prioritize the fabless revenue business. We are looking for recurring revenue as, in terms of putting our engineering resources onto projects that generate recurring revenue.
The next question is from Sats P. What are the biggest risks to your business in the medium term? Well, we do a lot of work with Taiwan. The geopolitical state across the world is a challenge for everybody and is therefore, by definition, a challenge to us. We've already addressed or spoken about the need to recruit people. That, but to be fair, the recruitment of good engineers has been a problem for 10 or 15 years. That's not a new risk. I think that's probably the, yeah.
Yes. Yeah. I mean, people you know, different people have different views on the risk that Taiwan, you know, Taiwan plays in it. But you know, in terms of it's just about the, you know, the probability of that, you know, it's just about the probability of that. I mean, we consider that quite low. But.
You are talking about the medium term. And if the medium term is three or four years, then there will be alternative foundries outside of Taiwan that we will be able to use. The next question is also from Steve B. The question is: For new contracts, how many years would you generally estimate it takes to then generate supply revenues? One, two, or three years?
Yeah. I mean, at best, it's 2 years. So if there's a, you know, existing product, very clear design, then for the design and supply, it's 2 years. If the design's already done and talked about that supply only one, that can be really, you know, generated within the next year. We're, you know, I mean, the automotive market is generally slower on that. That can be in excess of sort of 3 years. But, you know, from a design win being announced to supply, you know, supply revenue, it will be 2-3. It will be 2-3 years.
The next question is from Gruff W. When do you expect to receive delayed payments from customers? To be honest with you, in the next 2-4 weeks, we would expect, maybe sooner. You can rest assured we're on it all the time. The next question is from Steve B. If you only take on 2 new contracts each year, will this not constrain growth? Well, it won't constrain growth. There will be growth. It'll just be measured growth rather than explosive growth. If you take on more contracts than that, you run the risk of not having the engineers to do the work. So you've got to do it in line with what you can foresee in terms of your capacity and how much you can grow your capacity.
We took on 1.5 con contracts so far this year, depending on how you measure it. With a bit of luck, we might do 3 next year. I think 2 is our target. It doesn't mean to say we'll only do 2. And if we can grow the engineering base, we could probably do more. But you can you can go too fast at these things. This is a question from Tom L. Well, this is for you. What nanometer is your new industrial ASIC that is moving into supply?
Yeah, that is 40, 40 nanometers. You know, it's quite a, quite a mainstream technology.
The next question is from Bob L. Is growth currently constrained more by sales capacity, engineering capacity, or financing? Probably. What we have noticed in the last few months is people are taking longer to place an investment decision. They're still placing the decision. But it takes rather longer. So if that's what you mean by sales capacity, then that's the fact. And financing is an issue. We IPO'd in 2022 asking for GBP 10 million of equity. We still haven't raised GBP 10 million of equities despite asking for three on three occasions. So, if a very large chip came along and last year, we did get involved in a bid for a very large chip, which would have been $200 million, which we walked away from because we didn't think we had enough working capital.
And we thought it would be too difficult to raise the working capital. So at some point, financing will have to be an interest issue. But we work on the presumption that if we get an attractive enough proposition, then the market would be happy to support us. I don't think so. That's – I think if you – sorry. The question is from Steve B. Today's announcement says that the current market for ASICs is $1.6 billion, growing to $25 billion. Is there a typo? I think below that paragraph, there is a link to where we got the story from. So I think it's referenced there. But I'm pretty sure that that's what it says in the link from the independent organization that announced that.
Yeah. I mean, we would look at the ASIC market as being, you know, roughly 5% of the total semiconductor market, which, you know, the semiconductor market is $600 million at the moment and, you know, growing to $1 trillion by the end of the decade. But, yeah. I mean, there's a lot of definition about what people consider an ASIC to actually be. So, yeah. But, you know, we would look at it, you know, as I said, you know, as 5% of the total semiconductor opportunity. I believe that's the last.
I think we've answered all the questions.
Mark, Ian, absolutely. And thank you very much indeed for being so generous of your time there and addressing all of those questions that came in from investors. And, of course, if there are any further questions that do come through, we'll, of course, make these available to you immediately after the presentation has ended, just for you to review to then add any additional responses where it's appropriate to do so. And we'll publish all those responses out on the platform. But Mark, perhaps before really just looking to redirect those on the call to provide you with their feedback, which I know is particularly important to yourself, and the company, if I could please just ask you for a few closing comments to wrap up with, that would be great.
Yeah. I'd like to say thank you to all those people, all those institutions, all those retail investors who have supported the company. We value your support greatly. And we look forward to those of you who are not investors, deciding to invest in the future. Thank you very much for coming to today's presentation. It's appreciated.
Mark, that's great. And thank you once again for updating investors this afternoon. Could I please ask investors not to close this session as you'll now be automatically redirected to provide you your feedback in order the management team can better understand your views and expectations? This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of EnSilica PLC, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all.