Wipro joined many competitors in acquiring a semiconductor engineering specialist. ER&D service vendors are rushing into this market, attracted by its long-term growth potential. Indeed, we estimate to ten the number of semi-conductor M&As since 2015. Altran, through the Aricent, GlobalEdge, and SciConTech transactions, has been the most acquisitive. However, all the industry’s brand names have been active, e.g., Tech Mahindra, HCL Tech, Alten, LTTS, and Cyient.
Tech Mahindra To Acquire a Semiconductor Engineering Firm
Tech Mahindra made a surprise move in semiconductor engineering services. The company is to acquire Cerium
LTTS Unexpectedly Slows Down in Q3 FY20
LLTS’ revenue growth in Q3 FY20 decelerated from 11.9% at CC in Q2 to +7.5% in Q3. The company was hit by a deteriorating situation in its Telecom & High-Tech (-26%), which was impacted by the ramp-down of two clients in its Semiconductor sub-vertical that represents (we estimate) 40% of its Telecom & High-Tech sector. LTTS, also, had flat growth (+2%) in its Industrial Products, with large accounts reducing their spend.
2020: A Year of Slowdown for ER&D Service Vendors
We are expecting a slowdown in ER&D spending in 2020. Learn more here.
Wipro Expecting An Acceleration in E&IS from Q3 Onward
During its Q2 FY20 earnings call, Wipro provided some light about the performance of its Industrial & Engineering Services (E&IS) unit.
It is not so long ago that Wipro was corporate India’s strongest name for ER&D services, mostly servicing clients in the network equipment provider industry and also semiconductor manufacturers.