MosChip plans to mass produce 11 new chips

MosChip Semiconductor Technology Limited, a fabless semiconductor designing company, plans to start mass production of 11 new chips for the peripheral component interconnect (PCI), universal serial bus (USB) and internet security space from the second quarter of the current financial year.

Speaking to Business Standard, K Ramachandra Reddy, chief executive officer and chairman of MosChip Semiconductor Technology Limited, said: "The trial run on these chips have been successfully completed. And the chips would provide total solutions to original equipment manufacturers (OEM)."

According to Reddy, the company is in the final stages of testing a new internet security chip. "Once this chip hits the market in October, we expect to be back in the black. The chip would help top companies dealing in internet protocol," Reddy added.

The company made a net loss of Rs 11.29 crore for the year ended March 31, 2004, on a total income of Rs 12.63 crore. "We expect the turnover to be around Rs 45 crore with the launch of the new products that are in the pre-production stage," Reddy said.

"We are also in the process of modifying the internet security chip without changing the hardware component to suit local area network (LAN) and voice over internet protocol (VoIP) operations. The software written on this chip would vary from the security chip but the rest would be the same," he added.

The company has already shipped 80,000 chips which helps in USB to Infrared Data Association (IrDA) conversion.

"These chips fitted in adaptors help in transfer of data from mobile phones to computers. At present, we are producing the adaptors which transfer data at a speed of four mega bits per second," Reddy said.

According to Reddy the sales of these chips would pick up from August through January and the company is in advanced stages of talks with majors in the mobile industry. The company is gearing up to produce a few hundred thousand chips during the course of the next few months.

The company has applied to become a member of the IrDA association for the production of the next generation of the very fast infrared (VFIR) chips which transfers data at the speed of 16 mega bits per second.

On the rights issue of the company that closed on June 29, Reddy said, "The issue has been successfully subscribed to. The issue of 33,43,587 equity shares at Rs 35 per share has raised Rs 11.70 crore. The funds would be utilised to meet the future working capital and capital expenditure requirements of the company."

"After the allotment of shares, the equity of the company would increase to Rs 33.99 crore from Rs 30.65 crore," he added. The company also plans to increase the head count from the present 70 to around 100 by the end of the year.

"We are looking for design engineers for our offices here and sales and marketing executives for the US," Reddy said.

The company is also looking at the option of making custom-made designs in either internet protocol or chip designs for big corporate on a yearly deal basis.