(Photo : Tessolve)

Bengaluru-based Tessolve, a division of Hero Electronix's announced on Wednesday that it has entered into a definitive agreement to acquire Dream Chip Technologies, a German leader in semiconductor chip design, in a deal worth up to Rs 400 crore (EUR 42.5 million). The strategic acquisition will bolster Tessolve's capabilities and will leverage India's ambitious move to grow as a global chip design and manufacturing hub.

Tessolve, is a leading name in semiconductor engineering and this acquisition deepen its footprint in the European semiconductor industry. According to the agreement, subject to regulatory approvals, Tessolve will acquire 100% of Dream Chip Technologies in an all-cash transaction.

The acquisition will advance Tessolve's expertise in semiconductor and embedded design, specifically for System on Chip (SoC) applications. The deal come at a time when market for complex chip designs, including AI, automotive and industrial applications are growing exponentially.

"This acquisition solidifies our position as a top-tier semiconductor engineering firm globally with unmatched design to productization capabilities." Stated Srini Chinamilli, Co-founder & CEO of Tessolve in a news release.

Benndorf, CEO of Dream Chip Technologies added that, "by combining our design capabilities and IP with Tessolve's established semiconductor services, we are well-positioned to deliver comprehensive solutions for our clients, from architecture to final product."

Strategic Expansion into Europe

The acquisition is a strategic step in Tessolve's ongoing expansion in Europe, a region known for its innovative semiconductor research and development. Dream Chip Technologies has been a key player in semiconductor design across Germany and the Netherlands, operating four major delivery centres in these regions. These centres include an Advanced Driver Assistance Systems (ADAS) and imaging lab, which will complement Tessolve's service offerings, particularly in areas of autonomous driving and smart imaging.

With Dream Chip's expertise, Tessolve plans to enhance its portfolio, offering end-to-end semiconductor solutions from design and architecture to post-silicon testing and supply chain management. The addition of Dream Chip's centres of excellence and delivery locations in Europe is expected to streamline Tessolve's entry into new markets and customer segments across the continent.

This move places Tessolve among a select group of firms capable of delivering turnkey semiconductor solutions, particularly for AI-driven applications and automotive technologies that demand elevated levels of innovation.

The deal will see Tessolve, a division of Hero Electronix owned by the Munjal family of Hero-the world's largest motorcycle manufacturer-steps into a rapidly evolving Indian semiconductor sector. Recent moves, like the nation's Semiconductor Mission launched in late 2022, aim to boost India's chip design and manufacturing capabilities after global supply chain disruptions spotlighted the industry's critical role. While India has already made strides in chip design, it is now pushing toward semiconductor production, a sector currently led by the US, Taiwan, and Japan.