The IPO Buzz: Silvaco (SVCO) Prices IPO at $19 – Top of Range

Silvaco Group (SVCO) priced its IPO at $19.00 – the top of its $17.00-to-$19.00 range – and sold 6.0 million shares – the number in the prospectus – to raise $114.0 million on Wednesday night, May 8, 2024. The Santa Clara, California-based company, which provides semiconductor design software and services, went public at a market cap of $542.4 million. Silvaco’s stock is expected to start trading Thursday, May 9, 2024, on the NASDAQ.

Jefferies and TD Cowen Securities were the joint book-runners.

Micron Technology, a Silvaco customer, holds about 1.37 percent of Silvaco’s stock – about 308,641 shares – upon the IPO’s pricing. That stake is the result of Micron’s purchase of a $5 million senior subordinated convertible promissory note on April 16, 2024, the prospectus says.

Some of the IPO’s proceeds will be used to pay off debt, the prospectus says.

Katherine S. Ngai-Pesic, a co-founder and the chair of Silvaco’s board of directors, along with members of the Pesic family, and the SMIK Trust, control the company after the IPO through their ownership of about 70.1 percent of Silvaco’s outstanding stock.

Silvaco, founded in 1984 and based in Santa Clara, California, provides TCAD software, EDA software and semiconductor intellectual property – as well as services – that help semiconductor and photonics companies increase productivity, accelerate products’ time to market, and cut development and manufacturing costs. (Note: TCAD is an acronym that stands for technology computer aided design. EDA is an acronym that stands for electronic design automation.)

Silvaco’s customers include semiconductor manufacturers, original equipment manufacturers (OEMs) and original design manufacturers (ODMs), the prospectus says. The company’s target markets include display, power devices and automotive.

 “Our TCAD solutions have been adopted by 3 of the 10 largest semiconductor companies by revenue in 2023, by 8 of the 10 largest flat panel display companies by revenue in 2023, and by 4 of the 10 leading power semiconductor devices companies in 2023,” the prospectus says.

“Our EDA solutions have been adopted by 6 of the 10 largest semiconductor companies by revenue in 2023 and by 7 of the 10 largest flat panel display companies by revenue in 2023.”

The company’s revenue rose in the three years from 2021-2023, while its net loss doubled from 2021 to 2022 and shrank in 2023, the prospectus says:

• Total revenue rose to $54.25 million in 2023 – up from $46.74 million in 2022 and $41.96 million in 2021.
• Silvaco’s net loss was $0.32 million – or $316,000 – in 2023 – down sharply from its 2022 net loss of $3.93 million, which was slightly more than double its 2021 net loss of $1.85 million. 

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