Shorooq Partners Ushers a New Era of Innovation: Investing in Pearl Semiconductor

In the fast-paced world of venture capital, strategic decisions shape the future of technology and fuel the rise of groundbreaking innovations. Shorooq Partners, renowned for its unwavering focus on technology, has consistently led the charge in driving transformative change in the Middle East. Today, we are thrilled to unveil a new chapter in our journey – a venture into the world of semiconductor innovation with our investment in Pearl Semiconductor, a fabless semiconductor company specializing in Timing Integrated Circuits (ICs) and Reference Clocks.

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Semiconductors form the very backbone of modern technology, enabling the devices and solutions that have become integral to our daily lives. Shorooq Partners’ decision to mark a stride into uncharted territory is driven not only by the immense potential for growth in this sector, led by the amazing team at Pearl Semiconductor, but also by our commitment to supporting Egypt's rising technology landscape and beyond.

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Before we delve deeper into this pioneering collaboration, it is essential to understand the profound impact that Ayman Ahmed, a long-term semiconductor expert and CEO of Pearl Semiconductor, along with his esteemed college professor and industry veteran, Dr. Hisham Haddara, Chairman of the company, have had on Egypt's semiconductor landscape for over three decades culminating in the recent founding of Pearl Semiconductor. Their pioneering efforts, which began in the early 1990s, have laid the foundation for a burgeoning semiconductor ecosystem in Egypt, empowering the country to bring new innovations to the global market today.

A Brief Chronicle of the Evolution into a Comprehensive Ecosystem

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In the early days, the semiconductor ecosystem was nearly nonexistent in Egypt, but Dr. Hisham, having completed his education in France, was undeterred as he set his sights on an ambitious goal – to attract foreign companies and lay the groundwork for the industry’s development in the country. This pursuit led to the establishment of ANACAD, a small French company, to launch Egypt’s first development center of its kind.

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Ayman, one of the first engineers to join Dr. Hisham's journey, brought his talents and passion to the endeavor. Together, they worked towards a common goal of not just building a company but an entire industry.

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The inception of ANACAD Egypt in 1994 was just the beginning of a remarkable journey, as ANACAD was swiftly acquired by Mentor Graphics, a prominent Electronics Design Automation (EDA) company, merely a week after its launch. This turn of events further united Dr. Hisham and Ayman, fueling the desire to propel shifts in the semiconductor landscape.

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Building upon their six-year experience at Mentor Graphics, Dr. Hisham and Ayman left to launch MEMSCAP Egypt, a subsidiary of another French company. However, their true breakthrough came with the inception of Si-Ware Systems in 2004, Egypt's very first fabless semiconductor company dedicated to IC Design services.

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The fabless semiconductor model, wherein companies develop products without owning a fabrication facility, gained global popularity in the 1980s, with current manufacturing predominantly concentrated in countries like Taiwan, Singapore, Malaysia, Korea, and China. This fabless approach allowed Si-Ware Systems to focus on design and creativity, tapping into Egypt's vast pool of engineering talent and skilled workforce, while leveraging overseas facilities for manufacturing.

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Si-Ware and Pearl’s Journey in Semiconductor Innovation

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At the outset, the concept of an Egyptian semiconductor company competing on the global stage faced much skepticism. As Ayman recalls, "Just 20 years ago, engaging in IC design in Egypt was dismissed as stupid. Egypt’s semiconductor landscape still resembled a desert, barren and unexplored." As a result, it was highly improbable for Si-Ware to secure design services contracts from any US or European customers at that time.

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However, against all odds, Si-Ware Systems forged ahead and paved the way for a thriving semiconductor industry in Egypt. Beyond securing contracts with prominent industry players, the company began to earn praise from major semiconductor companies in the US.

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With a growing design team in place, Si-Ware Systems thrived as a formidable player in the design service domain, but Si-Ware Systems had grander ambitions for its team: developing its own semiconductor products - an endeavor that seemed even more audacious at the time.

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Si-Ware Systems thus embarked on a strategic shift from design services to in-house product development. Envisioning a future where Egypt would gain greater recognition in the global semiconductor industry, the company continued its evolution. In 2019, it underwent a significant restructuring and sold its design service business to Goodix, one of China's leading semiconductor companies. This move allowed them to concentrate entirely on product development, reaffirming their commitment to innovation and independence.

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In a transformative juncture, Pearl Semiconductor emerged as an independent entity spun-off from Si-Ware Systems in December 2020. Ayman, who, alongside Dr. Hisham, had relentlessly worked to pioneer groundbreaking new technology, assumed a leadership role at the forefront of Pearl Semiconductor. With their combined expertise and decades of industry knowledge, the company solidified its dedication to creating its own semiconductor products. This dynamic synergy of experience, expertise, and visionary insight propelled Pearl Semiconductor and Si-Ware Systems to challenge the boundaries of innovation, steering Egypt's semiconductor industry towards an exciting, promising future.

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Ayman articulates, “Service business is good. It gives you experience and exposure, but it is not scalable. A product company, on the other hand, must possess the right products, technology, and market opportunity. The pivotal difference lies in value creation. Product companies can grow much larger and make more impact than design services… which is what we’re aiming for at both Si-Ware and Pearl."

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Today, Pearl Semiconductor brims with global aspirations, boasting offices in both Malaysia and Egypt. Their unyielding commitment to empowering Egypt’s semiconductor industry has transformed a once barren landscape into a flourishing ecosystem, now housing over 30-40 companies, including Egyptian startups and multinational giants, all contributing to the expansion of the nation's technology landscape.

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As Shorooq Partners observes this pivotal moment, we recognize the potential and significance of this paradigm shift. We believe this collaboration signifies more than a promising investment in a semiconductor player with the capacity to become a global leader. We are supporting Egypt’s ongoing revolutionary movement – one that seeks to unlock the untapped engineering potential of the country and the broader region. Stay tuned for more details about this significant partnership in Part 2 of our announcement!