Semiconductor engineering firm Tessolve plans to acquire two companies in the US and India to reach $500 million in annual revenue within four years. Backed by TPG and Hero Electronix, the firm is scaling its AI chip design services. While private, its growth strategy highlights the rising demand in India's semiconductor engineering sector.
Tessolve, a semiconductor engineering firm under Hero Electronix, is looking to strengthen its global footprint by pursuing two new acquisitions. The company plans to add one firm in the United States and another in India, aiming to surpass $500 million in annual revenue within the next three to four years.
Scaling Revenue and AI Capabilities
The company’s growth plan comes after a period of strong performance. In the financial year 2026, Tessolve reported revenue of ₹1,526 crore, increasing from ₹1,157 crore in the previous year. Management has set an internal target to exceed ₹2,000 crore in revenue for FY27. This trajectory is supported by the rapid expansion of AI infrastructure, as work on AI chips and data centers now accounts for at least 25% of the company's total revenue.
Strategy for Acquisitions
Tessolve’s acquisition strategy focuses on building technical capabilities and expanding geographic reach rather than simply growing the top line. This approach was evident in its November 2024 acquisition of the Germany-based Dream Chip Technologies for ₹400 crore. Since that deal, management reports that the acquired unit’s revenue has more than doubled, validating the integration strategy. The firm’s ability to fund these growth initiatives was bolstered by a $150 million investment from private equity firm TPG in September 2025. This capital is being deployed to enhance delivery centers, establish advanced testing laboratories, and fund potential buyouts.
Sector Context for Investors
While Tessolve is a private entity, its growth plans serve as a proxy for the broader demand in the Indian semiconductor engineering services market. Companies in this space, such as Tata Elxsi and L&T Technology Services, have similarly focused on embedding AI into chip design and testing. For investors, while there is no direct stock market impact, Tessolve’s progress provides a barometer for the talent and demand levels within India’s semiconductor design ecosystem. An IPO remains a possibility for the future, but the company has not yet initiated formal steps toward a public listing.