Silvaco Group, Inc. (SVCO) Business

Item 1. Business

Overview

Silvaco Group, Inc. is a provider of technology computer aided design (“TCAD”) software, electronic data automation (“EDA”) software and semiconductor intellectual property (“SIP”). Our solutions are used by engineers to optimize semiconductor manufacturing processes and efficiently bring semiconductor products to market. Our differentiated solutions enable our customers to increase productivity, accelerate time-to-market and reduce development and manufacturing costs.

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Our TCAD solutions are used in the semiconductor industry to model and optimize manufacturing processes and device performance. This includes foundational TCAD software and more advanced artificial intelligence (“AI”) machine learning (“ML”) for process development, called Fabrication Technology Co-Optimization (“FTCOTM”). We are a pioneer in the leverage of AI to redefine manufacturing process development in partnership with customers.

Our EDA software is used by semiconductor companies to design, simulate, and verify semiconductors. Our EDA products include SPICE modelling and simulation, parasitic extraction and reduction, standard cell generation and optical proximity correction.

Our SIP portfolio includes a range of products, including foundation technology, such as standard cells and memory compilers, as well as a suite of interface technologies. Our SIP portfolio benefited from recent acquisitions, most notably Mixel Group, Inc. (“Mixel”), which is positioned for growth as we roll out Mixel’s quality processes to the rest of the organization.

Our customers include foundries, integrated device manufacturers (“IDMs”) and fabless semiconductor companies.

Corporate Information

Silvaco was incorporated in the State of Delaware in 2009 under the name Saratoga International, Inc., and changed its name to Silvaco Group, Inc. in November 2013.

Our headquarters are located at 4701 Patrick Henry Drive, Building #23, in Santa Clara, CA 95054, and our headquarters’ telephone number is (408) 567-1000. We have 12 offices worldwide.

Our website address is https://www.silvaco.com. Our website and the contents therein or connected thereto are not intended to be incorporated into this Annual Report on Form 10-K. Through a link on the Investor Relations section of our website, we make available the following filings as soon as reasonably practicable after they are electronically filed with or furnished to the SEC: our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act. All such filings are available free of charge. In addition, the SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

Growth Drivers

Our software solutions enable customers to simulate and optimize semiconductor manufacturing processes as well as design, simulate and verify innovative semiconductor products. Growth in demand for these tools is driven by key trends, including the launch of more advanced manufacturing processes by foundries and IDMs, as well as advancements in many end markets, including memory, automotive, quantum computing, photonics, data center, cellular technologies and AI.

Our growth prospects are enhanced by the inherent differentiation embodied in our products. We design our solutions to address our customers’ biggest challenges. We differentiate based on efficiency, cost, performance, and time to market. Our leadership in AI-powered process development is a good example of a solution that accelerates time to market for our customers while dramatically reducing their development costs.

We see these trends as a powerful growth opportunity for Silvaco. As semiconductor companies continue to define new generations of more complex products and processes, they increasingly leverage our growing suite of differentiated software solutions and semiconductor IP.

Our Products

We define our solutions in three product categories: TCAD, EDA, and SIP.

TCAD Solutions

Our manufacturing process development solutions include traditional TCAD tools combined with leading-edge AI/ML simulation tools.

Our traditional TCAD tools enable simulations of existing and new technologies for device performance optimization. Our solution is designed to provide complete, fast, and accurate results, allowing customers to explore trade-offs in performance, power, size and reliability and optimize their final design.

Our FTCO AI/ML solution uses manufacturing and simulated data to create a computer model or “digital twin” of manufacturing processes that can be used to simulate the fabrication process in "real time". This “digital twin” serves as a simulation platform through which customers can run countless experiments to analyze many variables and improve yield due to variations in a wide range of parameters in the manufacturing process. All of this is done without the need to run physical wafers which can be time-consuming and expensive. We have partnered with Micron Technology, Inc. for the development and deployment of these AI/ML tools.

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Both solutions are designed to help reduce the time and manufacturing cycles spent developing semiconductor technologies and help reduce costs and accelerate development cycles. By reducing the need to run expensive and time-consuming experiments, our solutions enable customers to rapidly and cost-effectively bring their products to market. Our AI-augmented solutions include GPU-enablement for plasma simulation and photonics, which are recent additions to our product portfolio from our acquisition of Tech-X Corporation.

Typical applications include simulation of process variation; device performance; thermal effects; optical intensity; plasma chamber and radiation effect.

Our FTCO AI/ML solution provides compatible data structures that can be used with our EDA modeling, analysis, simulation, verification and yield enhancement tools.

We also provide design services, expert training and workshops on our latest manufacturing process development solutions.

EDA Solutions

Silvaco offers a full, production-proven IC-CAD signoff design platform, comprehensive automated standard cell library creation and characterization solutions, and advanced IP management tool suites.

Its IC-CAD design flow supports the complete path from design capture and circuit simulation through layout design, physical verification, parasitic extraction and reduction, and post-layout analysis including statistical variation and yield analysis, enabling silicon-accurate verification and predictable signoff.

The automated standard cell library solutions accelerate development through layout generation, optimization, parasitic-aware characterization, and variation-aware modeling to deliver high-quality libraries optimized for power, performance, and area.

In addition, Silvaco’s IP management tools address the growing complexity of modern SoC development by enabling efficient onboarding of third-party IP, structured reuse of internal IP, version control, traceability, and secure collaboration across distributed teams.

SIP Solutions

The number of third-party IP design blocks incorporated into customers’ semiconductor designs has increased as system-on-chip (“SoC”) architectures grow more complex and development cycles compress. Customers increasingly rely on pre-verified and silicon-proven IP to reduce design risk, manage costs, and accelerate time-to-market.

Our SIP portfolio offers a comprehensive portfolio of solutions for SoC designs, including hard and soft IP, foundational libraries, and embedded memory technologies. These SIP solutions are designed to integrate into customer designs across a range of process technologies and end markets.

Silvaco’s SIP portfolio includes:

Interface IP

•Production-ready and Custom silicon-proven mixed-signal IP solutions for high-speed interfaces, including Mixel® MIPI® C-PHY™, D-PHY™, and M-PHY® as well as LVDS and other multi-standard SerDes

•Production-ready and silicon-proven soft IP solutions supporting industry-standard interfaces, including MIPI® I3C, Arm® AMBA® interconnect fabric, and peripheral components

Logic Libraries and Physical IP

•Production-ready and Custom Standard cell logic libraries, including Core, Power Management, Engineering Change Order (“ECO”), Advanced Compute, and physical completion library components

•Libraries are designed to support performance, power, and area optimization requirements across a range of applications and process nodes

Embedded Memory Solutions

•Production-ready Embedded memory compilers for both volatile and non‑volatile memory technologies

•Memory solutions incorporate integrated test and repair features intended to improve yield, reliability, and manufacturability

Automotive IP

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•Production-ready IP solutions for automotive applications, including CAN FD and CAN XL, designed to meet safety, reliability, and security requirements for automotive electronics

Silvaco’s SIP products are typically incorporated into customer designs early in the development cycle and may remain in production for extended periods. This pattern is particularly common in markets with long product lifecycles, such as automotive, industrial, and robotic applications. Silvaco’s SIP is also deployed in higher-volume markets with shorter product cycles, including mobile, consumer drones, edge AI computing, Internet of Things (“IoT”), and mobile-adjacent applications such as AR, VR, and wearables. As a result, Silvaco’s SIP business is influenced by customer design activity across a range of end markets, adoption of industry standards, and broader trends in semiconductor integration and system complexity

Customer Support

We provide a consistently high level of customer support and training to ensure our customers extract the full value of our solutions. This support is provided through a global network of application engineering teams.

Customer support includes frequent software updates. We also offer workshops to increase customer productivity through courses offered worldwide, as well as online training.

Product Warranties

We generally warrant our products to conform to material specifications for a limited period of time. We also provide customers with limited indemnification with respect to claims that their use of our software products infringes on patents, copyrights, trademarks or trade secrets. We have not experienced material warranty or indemnity claims to date.

Growth Strategy

We intend to take the following actions to deliver value to our customers:

•Focus on large, growing markets where we have cemented ourselves as a trusted solutions provider. We seek to expand our presence in multiple growing markets, including display, automotive semiconductor, memory, quantum computing, photonics, data center, and AI markets.

•Enhance our competitive advantage by addressing unique customer needs. We pride ourselves on research and development agility, allowing us to design capabilities specific to customers’ requirements and, where appropriate, integrate those capabilities into our software solutions.

•Focus on a portfolio approach to the licensing and sale of our software platform. We seek to differentiate ourselves through the breadth of our software and SIP offerings, addressing the full design cycle needs of our customers.

•Expand our customer base. We believe that we can both expand our customer base and grow within our existing customers. This growth will be enabled by our global salesforce and application engineers.

•Establish, maintain and expand relationships with key technology providers and academic partners. We have relationships with SIP providers, foundries, design service companies, EDA companies, our commercial customers and academia. We plan to continue to expand our ecosystem to maximize our reach, integrate into established flows and offer world-class solutions.

•Continue to seek strategic acquisitions to accelerate growth and expand our market footprint. We intend to continue to target acquisitions that allow us to expand our solutions portfolio to better service our customers’ needs.

Customers

We provide end-to-end solutions such as software, design IP, and world-class support to a global and diverse customer base of engineers and researchers in both semiconductor companies and academia. We aim to support our customers’ use of our products to solve semiconductor design challenges spanning the levels of atoms, devices, and systems. Through decades of collaboration with academia, we have created an end-to-end solution for display visualization and simulated stress-testing coupled with an integrated support system and SIP services. With our combined platform, we believe we can attract new customers, retain existing ones, and create upsell opportunities. As of December 31, 2025, we had over 800 customers that relied on our solutions worldwide, of which over 200 are academic institutions.

As of December 31, 2025, our revenue was geographically distributed as follows: 54% from customers in Asia, 38% from customers in the Americas, and 8% from customers in Europe.

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Sales

We work closely with our customers to meet their specific and complex needs. We utilize account managers to engage customers early in their design-in cycles and collaborate with them throughout the design journey. We rely primarily on direct sales channels across the world and augment our sales efforts with distributors in growth or emerging markets, such as Israel, India and Southeast Asia. To handle the complexities of the industry, we use account managers with specialized knowledge who cover and can speak to all company products. In addition, we rely upon field application engineers for product specialization and our sales operations to handle universities and smaller sales opportunities.

Although the specific terms of our contracts vary from customer to customer, the license agreements are commonly one or three-year commitments. Sales cycles vary depending upon the product and offerings along with the specific needs and complexities of the individual customer. Manufacturing process development and EDA opportunities generally have a sales cycle of six to nine months whereas SIP opportunities generally range from three to nine months. Renewal engagement generally starts six to 12 months prior to license expiration.

Our sales and marketing teams have international coverage segmented into three distinct regions: the Americas (U.S. and Brazil), Europe, the Middle East, and Asia (“EMEA”) and Asia-Pacific (“APAC”), which includes Japan, China, Korea, Taiwan and Singapore.

Research and Development

Our success is inextricably linked to our ability to deliver new innovative solutions and maintain our existing product portfolio. Our research and development (“R&D”) priorities are centered around our three main product areas described above. Our R&D team evolves existing products to address new customer challenges and deliver next generations of even more innovative and unique solutions to the industry’s largest challenges. R&D efforts are central to our long-term business success. We therefore expect to continue making significant investments in this area going forward.

Intellectual Property

Our patents and other legal intellectual property protections are created when we believe we have developed proprietary and unique technologies that may impact our customers’ businesses and help differentiate our products. We utilize patents to provide protection for our developed products, helping maintain product differentiation. Currently, our patent portfolio is focused on SIP (fingerprinting and DNA-analysis), circuit and standard cell design, generation and optimization, cell libraries with many cells, memory cells and arrays, physical verification, simulation of light emitting diodes, (“LED”), and other related spaces. Our accomplishments of developing our technology and products, and our ability to compete worldwide, is made possible by our commitment to develop and maintain leadership of our products and to stay current with filings to protect our intellectual property.

We rely on patent, copyright, trademark, and trade secret laws, as well as confidentiality and non-disclosure agreements, other contractual protections, and distribution of software licenses only to protect our technologies and proprietary know-how. As of December 31, 2025, we had 47 issued U.S. patents expiring generally between 2026 and 2039, 5 pending U.S. patent applications, 4 issued foreign patents (including 2 French patents, 1 Taiwanese patent, and 1 Japanese patent) expiring generally between 2032 and 2041, and 9 pending foreign patent applications (including 2 pending Taiwanese applications, multiple pending European patent applications, and multiple pending Japanese patent applications). We did not have any pending International Patent Cooperation Treaty applications as of December 31, 2025. Our issued patents and pending patent applications generally relate to SIP characterization, standard cells, memory, physical verification, LED simulation, computational lithography, optical proximity correction, multi-patterning and photomask optimization, semiconductor manufacturability modeling and yield enhancement, and mixed-signal physical layer interface technologies. As of December 31, 2025, we had 16 U.S. registered copyrights. As of December 31, 2025, we have obtained registered U.S. federal trademarks for Mixel Mixed-Signal Excellence, SILVACO, Simulations Empowering Your nnovations, Tech-X, USim, VIRTUAL WAFER FAB, VSim, and VORPAL and have pending applications for FTCO and PCAIO.

Competition

We compete most frequently with Synopsys, Inc., Siemens EDA, and Cadence, Inc. by providing specialized differentiation that is generally unavailable from larger EDA companies. We also compete with other tools providers, customers with their own EDA capabilities and other IP companies, including Keysight Technologies, Inc., Schrödinger, Inc., CEVA, Inc., Zuken Ltd., Huada Empyrean, M31 and Primarius Technologies. Some of our competitors have made or may make acquisitions and/or have entered or may enter into partnerships or other strategic relationships which may alter their ability to compete with us. We compete based on the market segments we serve, technology leadership, product efficiency, ease of integration, ease of use, payment structures, customer support, and time to market. In the SIP segment, we compete based on PPA, idle power consumption, data movement performance and time to market.

For more information on risks related to competitive factors affecting our business, see the relevant discussions throughout Item 1A. “Risk Factors.”

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Government Regulation

We face increasingly stringent and evolving regulatory challenges. We are subject to anti-corruption, anti-bribery, anti-money laundering, and similar laws in the United States and other countries in which we conduct activities, including the FCPA, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the USA PATRIOT Act, and the United Kingdom Bribery Act 2010, which generally prohibit companies and their employees, agents, intermediaries and other third parties from directly or indirectly promising, authorizing, making or offering improper payments or other benefits to government officials and others in the private sector. Noncompliance with these regulations could subject us to investigations, severe criminal or civil sanctions, settlements, prosecution, loss of export privileges, other enforcement actions, disgorgement of profits, significant fines, damages, other civil and criminal penalties or injunctions, whistleblower complaints, adverse media coverage and other consequences. We are also subject to governmental export and import controls that could impair our ability to compete in international markets due to licensing requirements and subject us to liability if we are not in compliance with applicable laws. For example, certain of our software solutions are subject to U.S. export controls and sanctions, including the Export Administration Regulations, U.S. Customs regulations, and the economic and trade sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Control, which may limit our ability to export our software solutions and technology or may require export authorizations and conditions prior to export. We regularly engage with outside experts and review our internal compliance related to such U.S. export controls laws, regulations and sanctions programs and have filed certain voluntary disclosures related to potential violations of such U.S. export control laws and regulations and sanctions programs. Such voluntary disclosures remain pending and if an enforcement action is brought against us in relation to such potential violations, such actions could result in the imposition of significant penalties against us. Furthermore, because we may process personal data in the ordinary course of our business we are, or may become, subject to numerous data privacy and security obligations, including federal, state, local, and foreign laws, regulations, guidance, and industry standards related to data privacy and security, including, without limitation, the EU GDPR and the UK GDPR, the CCPA and other U.S. state laws. These privacy and security laws may increase our compliance obligations and exposure for any noncompliance. See Item 1.A. Risk Factors for additional information about the laws and regulations to which we are or may become subject and about the risks to our business associated with such laws and regulations.

Employees and Human Capital Resources

As of December 31, 2025, we had 406 employees worldwide, including 105 full-time equivalent employees located in the United States, consisting of 61 in research and development, 18 in sales and marketing, and 26 in general and administrative. We also have 99 full-time equivalent employees located in Egypt. We consider relations with our employees to be good and have never experienced a work stoppage. None of our employees are either represented by a labor union or subject to a collective bargaining agreement.

Compensation and Benefits

We offer competitive compensation programs that link compensation to business and individual performance. We also offer a bonus program, 401(k) match, Employee stock purchase plan and equity compensation.

Information about our Executive Officers

The following table sets forth certain information regarding our executive officers as of March 4, 2026:

Walden C. Rhines, Ph.D., has served as our Chief Executive Officer since August 2025, and as a member of the Board since September 2022. From March 2020 to June 2025, Dr. Rhines served as President and Chief Executive Officer of Cornami, Inc., a fabless semiconductor company. Since January 2015, Dr. Rhines has also served as a member of the board of directors and as chair of the compensation committee of Qorvo, Inc. (Nasdaq: QRVO), a fabless semiconductor company, and its chairman since November 2023. He served as a member of the board of directors of PTK Acquisition Corp. (NYSE: PTK), a special purpose acquisition company, from July 2020 until September 2021 and served on its audit, nominating and compensation committees. From October 1993 to March 2017, Dr. Rhines served as Chief Executive Officer of Mentor Graphics Corporation, an EDA company, and chairman of its board of directors from 2000 until its acquisition by Siemens in March 2017, pursuant to which the company was renamed Mentor Graphics, a Siemens Business. Following the acquisition, Dr. Rhines served as President and Chief Executive Officer of Siemens EDA (formerly Mentor Graphics, a Siemens Business), from March 2017 to October 2018, after which he served as its Chief Executive Officer Emeritus until September 2020. Dr. Rhines received a B.S.E. in engineering from the University of Michigan, an M.S. and Ph.D. in materials science and engineering from Stanford University, and a M.B.A. from the Southern Methodist University, Cox School of Business.

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Christopher Zegarelli has served as Silvaco’s Chief Financial Officer since September 2025. Prior to joining Silvaco, he served as Senior Vice President Finance at Infineon Technologies AG, a global semiconductor manufacturing company, from October 2023 to September 2025, and as Chief Financial Officer of GaN Systems Inc., a global leader in GaN power semiconductors, from June 2021 until its acquisition by Infineon in October 2023. He served as Chief Financial Officer of Thermal Engineering International Inc. from 2019 to 2021, and as Chief Financial Officer of indie Semiconductor from 2016 to 2019. Mr. Zegarelli has extensive experience in the semiconductor industry, having served in progressively senior roles at Intel Corporation, Qualcomm Incorporated, and Broadcom Inc. Mr. Zegarelli has a B.A. in Russian and International Economics from Middlebury College, and an MBA in Finance and Strategy from the University of Michigan.

Candace Jackson has served as Silvaco’s Senior Vice President, General Counsel and Corporate Secretary since September 2024. Prior to joining Silvaco, she was Deputy General Counsel of global fabless semiconductor design company Synaptics Incorporated from July 2021 to September 2024. She served as Associate General Counsel of aviation company Aerion Corporation from February 2021 until the company wound down its 20-year development operations in June 2021. She was a Senior Associate at the law firm of Mayer Brown LLP from September 2018 to February 2021 and an Associate from June 2015 to March 2016 where she served as securities and corporate governance counsel and led capital raising transactions for public companies of all sizes. From April 2016 through June 2018, she served as Assistant General Counsel at food distribution company US Foods Holding Corp. (NYSE: USFD) where she led the company’s IPO and the exit of its controlling stockholders and established its securities and corporate governance function. Ms. Jackson began her career as a securities and corporate governance lawyer at financial services firm Primerica, Inc. (NYSE: PRI) where she served as Senior Attorney following its spin-out from Citigroup, and as an Associate at law firm Husch Blackwell LLP. Ms. Jackson has a B.A. in Sociology from the University of Michigan, and a J.D. from the Emory University School of Law.