eSilicon acquires chip design firm Silicon Design Solutions

eSilicon, which gets custom chip designs manufactured at wholesale prices, said today that it has acquired Silicon Design Solutions, a custom chip design firm with a big operation in Vietnam.
Terms were not disclosed. Silicon Design Solutions is based in Milpitas and has more than 200 employees. Many of its chip designers are based in Ho Chi Min City and Danang in Vietnam (as well as Richardson, Texas). The deal thus lets eSilicon expand rapidly in the Asian market. Sunnyvale, Calif.-based eSilicon is kind of a middleman in the chip industry.
It addresses the problem of the high cost of getting chips made, particularly if you are a smaller chip design firm or one without a lot of chip manufacturing expertise. Chip designers turn their designs over to eSilicon, which preps them for manufacturing in a big contract manufacturer such as Taiwan Semiconductor Manufacturing Co. Since eSilicon collaborates with many players in the chip making ecosystem, it refers to itself as a “value chain producer.”
eSilicon has a lot of its own chip design expertise that can complement the engineers that is customers have. It also books the manufacturing and pays lower prices because it aggregates a lot of chip design orders and can thus command lower prices for the chip services that it buys from the contract manufacturer. Companies such as Cisco can use eSilicon to get chips made fast, bypassing the more expensive designers at custom chip makers.
With chip design and manufacturing costs going up, eSilicon’s service is important. The addition of Silicon Design Services helps the company expand its customer base as well as offer better engineering support for customers, said Jack Harding, chief executive of eSilicon. Duytan Tran, chief executive of Silicon Design Solutions, said the company has expertise in intellectual property, or designs for chips in things such as specialized memory.
The deal is expected to be complete in May.