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Dwindling VC funding 'troubling' for semis

Posted: 07 Feb 2008 ?? ?Print Version ?Bookmark and Share

Keywords:venture capital? VC funding? semiconductor industry?

The declining interest for venture capital (VC) funding in semiconductors could cause engineers and other talent to migrate and seek careers outside the industry, warned Shahin Farshchi, an associate partner with VC firm Lux Capital Management.

Farshchi described the overall trends in VC for semiconductors as "troubling," given that 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.

In 2007, VC 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.

The problems are twofold. First, the investments are highand continue to growfor 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 United States 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.

- Mark LaPedus
EE Times




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