New Frontier as digital broadcast chip designer gears up for IPO
Fast growing Frontier Silicon plans to follow in the footsteps of fellow fabless semiconductor company, Cambridge Silicon Radio by launching a London main market IPO, Business Weekly can exclusively reveal.
CEO Antony Sethill told us that a float was one of Frontier Silicon’s key near-term objectives, “at some point in the second half of 2007.” Sethill says that the float would be used as a platform to raise cash, but also make bolt-on acquisitions.
This is the first time the company, which designs digital broadcast chips for both DAB radio and mobile TV applications, has gone on the record with its intentions, although its recent progress has marked it out as a candidate in recent months.
NASDAQ is not on the company’s radar, however, with Sethill committed to building a dominant global player from a UK and in particular, Cambridge base.
Frontier almost trebled its workforce during 2004 to 160 wordwide, part of which was attributable to the creation of its Cambridge design centre, a base that now employs 75. The company now plans to further expand its operation in the city and is seeking 25 new software engineers to support the launch of new chips, due for launch within the next few weeks.
“We are not a US company, so I really don’t see the point in spending half my life travelling back and forth across the Atlantic for investor roadshows when we have very good market on our doorstep,” Sethill added.
“CSR and Wolfson have proven that a London float is a viable option for a company like ours, providing a strong investor base and a good analyst following.”
Valuations are difficult to assess at this juncture, but like CSR, Frontier would be floating from a position of strength, with a dominant market position and strong growth prospects. Frontier’s last revenues were in the region of $50m and it has shipped around $100m worth of products to date.
Growth between 2004 and 2005 was 60 per cent, although this has leveled off slightly this year, according to Sethill.
Frontier has 80 per cent of the DAB radio market, counting Bang & Olufsen, Sony, Sharp and Philips among its impressive portfolio of Tier One customers. If that on its own is not enough to whet the appetite of the City, then its market-leading mobile TV chips surely will.
Frontier’s silicon has already been launched in the world’s first commercial mobile TV service in Korea, but there is more to come, Sethill said.
“Mobile TV is still, of course, an emerging market. I think that the Beijing 2008 Olympics will a key catalyst and by 2010 I expect between 200 and 300 million handsets to have mobile TV chips in them.”
Headquartered in Wat-ford, Frontier has further offices in Ireland, South Korea, Taiwan, Hong Kong and China.