Sivers Semiconductors AB announced that its business unit, Sivers Wireless, has signed a strategic development agreement worth $16.4 million (approximately 170 MSEK) with a European satellite communications company to develop several chipsets for satellite communication ground terminals. Sivers has already received purchase orders of approximately 16.1 MSEK for development work to this project from August to November 2022 (whereof 7.5 MSEK was announced on September 27).
The agreement includes the development of multiple chips, forming the core of the customer’s next-generation of ground terminals, which is redefining communications by enabling ubiquitous connectivity and once-unattainable performance and functionality across a broad range of satcom markets, including government and defense, commercial (aerospace, maritime and rail), enterprise data and consumer broadband services.
This contract, in addition to a previous beamformer IC contract won by MixComm (acquired by Sivers in 2022), constitutes a long-term deep strategic partnership where Sivers will deliver multiple different types of chips for the customers’ current and next-generation ground terminals. The long-term partnership is expected to last long past 2030 with Sivers’ chips being used in a growing number of terminals from 2023 and beyond.
Sivers estimates that up to 75 percent of the agreement will be revenue-recognized from the fourth quarter of 2022 through the end of 2023. In addition, Sivers expects that the number of chips from Sivers to this customer will increase between the current generation and the next generation of ground-based satellite terminals.
The current generation of terminals will launch and start pre-series production in the first quarter of 2023, for which Sivers already has received volume orders of approximately 17.5 MSEK for the beamforming ICs mentioned earlier, which was announced October 21, 2022.
Development activities started in August 2022 and are planned to run until July 2024. The agreement includes the development of multiple chips, forming the core of the customer's next generation of ground terminals, hence Sivers expects that the number of chips from Sivers in the next generation of terminals to this customer will increase compared to the current generation, for which volumes will start being delivered from the first quarter of 2023.
“This is the largest development project ever for Sivers, and I am thrilled to see how the combined capability of our U.S. and Swedish teams has enabled us to win this deal. This further strengthens Sivers’ solutions within the satellite communications market, and it is encouraging to see how well our teams work together on this project. Satellite communication is already shaping up to a very substantial market for us in 2023 and we have great hopes for this customer to become successful and win growing market share in a market with a very extensive TAM. The chipset production volumes for Sivers across both current- and next-generation terminals has the potential could be many orders of magnitude larger than the current development agreement,” said Anders Storm, Group CEO, Sivers Semiconductors.