Tuesday, February 05, 2008

EETimes: VC trends in semis seen as 'troubling'

"Dwindling interest for venture capital funding in semiconductors could cause engineers and other talent to migrate and seek careers outside the industry, warned an expert in the field.
Shahin Farshchi, an associate partner with VC firm Lux Capital Management (New York), described the overall trends in venture capital for semiconductors as "troubling."

In fact, total venture capital funding for the semiconductor industry has been flat and hovered around the $2 billion level per year for the last several years, Farshchi said.

But in 2007, venture capital funding for the semiconductor industry is projected to fall by 10 percent over 2006, he said during a panel discussion at the International Solid-State Circuits Conference (ISSCC) here.

The problems are twofold. First, the investments are high--and continue to grow--for a new semiconductor startup, due in part to design costs and other factors, he said. Second, there is an increasing pressure among startups to "turn a concept into a product," he said.

What is the impact on flat-to-down VC funding for semiconductors? First, there are signs that more and more VC funds are moving from the U.S. to nations like China, India and others.

Second, and perhaps the biggest problem, is clear: lackluster VC funding could possibly cause "a migration of talent" to move out of the semiconductor industry and look for careers elsewhere, such as clean technology, he added"

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