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Steady VC funds in
fabless - Business & Finance
Steady VC funds in fabless - Business & Finance
- venture capital funding for fabless semiconductor companies declines.
At least someone is spending money in the electronics industry--albeit
frugally.
The Fabless Semiconductor Association (FSA) recently released a report
on venture capital funding of fabless semiconductor companies in Q2,
and while the number of deals increased sequentially, the total amount
invested declined. In Q2, 35 private fabless companies raised $456.1
million, compared to 26 deals in Q1 that netted $506.4 million. April
and June were the biggest months with 14 and 13 deals closed, respectively.
May was a lackluster month with only eight funding deals for a total
of $81.6 million invested.
Year-over-year deals declined slightly in number and dollars invested.And
while the dollar amount declined sequentially, the FSA was encouraged
by these figures -- the number of first-round funding venture investments
improved, to 26 percent of all deals, up from 12 percent in Qi. "
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This
surge in first-round fundings is a positive industry sign that the fabless
model is extremely viable and attractive," said FSA Founder and
Executive Director Jodi Shelton.In the second edition of its quarterly
publication, Eric Ross, director of electronics research and lead semiconductor
analyst at Investec, said that most fabless companies were able to weather
the downturn simply because they were fabless.Semiconductor companies
are more attractive investments because they don't require as much capital
as a systems manufacturer, said Irwin Federman, general partner at U.S.
Venture Partners (USVP).
Semiconductor companies need only semiconductor expertise, while systems
companies need that, plus software expertise, systems expertise, a lengthy
testing process, and more.And, for the most part, what venture capitalists
look for in a potential investment has remained the same during the
downturn. Federman said he looks for a market he can understand; a company
that has a push- product not a pull- approach; company executives that
understand the technology and company executives that understand their
market -- though the current market is a bit difficult to call
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