MosChip to buy US startup Verasity for $4 million

Indian chip designer MosChip Semiconductor Technology said on Thursday it was acquiring privately-held US chip startup Verasity Technologies for $4 million in stock, in a deal that would give it access to a number of products.

"The acquisition of Verasity will add a key component to MosChip's technology, product and customer portfolio," Ramachandra Reddy, chief executive officer at MosChip, said in a statement.

MosChip, which is making an ambitious foray in designing microchips from India and outsourcing the manufacturing, expects its own first set of products to hit the market by June, eleven months later than initially planned.

Santa Clara, California-based Verasity has a team of about eight people and is in the process of rolling out its microchips,

MosChip's shares rose eight per cent to Rs 31 at the Bombay Stock Exchange on Thursday in a broad rally led by tech stocks.

"We will market Verasity's chips as MosChip's products and this will also help us make inroads to a new set of customers for our products," Reddy said.

Chief Financial Officer Vivek Bhargava said MosChip expects to close the buyout of Verasity in five to six months.

As a 'fabless' chip maker, MosChip aims to break ground by using India's low-cost software and engineering talent to design microprocessors for a variety of devices while getting capital-intensive manufacture done in locations like Taiwan.