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VCs puzzled over future investments

Posted: 22 Apr 2009     Print Version  Bookmark and Share

Keywords:venture capital  cleantech  fabless start-up  EDA 

The question, said Magowan, is, "When does a CPU become a green play, [when] does ARM become a green play? Are consumers prepared to pay a premium for a green product, and how will legislation [come into] play?

"Right now, [at Alta Berkeley], we are in support mode," Magowan said. "But we have kept money back so we can continue to support our portfolio. If the recession is still going on in three years, it will be challenging."

Venture capital
When Gavrielov predicted venture capital wouldn't return to the semiconductor industry even after the current recession, he was speaking on the basis of numbers provided by the Global Semiconductor Alliance (GSA), formerly the Fabless Semiconductor Association. But Jodi Shelton, executive director of the GSA, has a different interpretation of the data. "VC money has been put on the side, but it has evaporated for all start-up companies, not just semiconductor start-ups," Shelton said.

Shelton did acknowledge a decline in Series A (early-stage) funding in recent years. "VCs may want to invest closer to a start-up's going to market, but every so often a company pops up," she said. "Innovation is not going to go away, [though] we may have to find new ways to fund things." For example, there are funds that are operated by major semiconductor companies such as Intel, Qualcomm and Broadcom, although these are usually slanted to encourage infrastructure or demand relevant to the parent's chips, not to enable a rival.

"When the fabless industry first blossomed, there were a lot of IDMs who ignored emerging markets because, weighed down with manufacturing, they were not agile enough to go after those markets. Now it is different," Shelton said. "The fabless have remained agile, and the IDMs are going fabless."

She echoed the call for start-ups to be wary of a digital play. "There's a lot of focus on power management, on analogue mixed-signal and RF. Europe is the area that started the GSA's mixed-signal and analogue support programme.

"But you can never say another digital company won't get out, because it will."

-Peter Clarke
EE Times

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