U.S. chips and semiconductors companies are seeing little in the way of financing in 2013 and a paucity of early stage deal activity suggests the trend will not diminish anytime soon.
Among the very first startups to ever receive venture capital financing was San Jose-based semiconductors firm Fairchild Semiconductor over 50 years ago. But history doesn’t seem to be helping current market trends, as funding to U.S. chips and semiconductors companies is on pace to record its lowest total since 2009 at its current run rate.
As shown in the chart below, chips and semiconductors funding recorded a 33% dip between 2010 and 2011 and hasn’t rebounded since. While deal activity in the chips and semiconductors space looks like it will continue at its historical pace in 2013, the current funding run rate suggests that chips and semiconductors funding will see less than $500M this year barring a notable jump in investments. Funding in 2012 was propped up by several larger deals including Quantenna’s $79M round and Calxeda’s $55M Series B financing.
Early-stage activity in the chips and semiconductors space has been more anemic. There has been fewer than 20 Angel/Seed and Series A deals in each year since 2009. And investors don’t appear willing to reverse that trend in 2013, with the first six months of the year seeing just a handful of early-stage deals.
A list of the most active investors in the Chips & Semiconductors industry can be found on the ‘Research’ tab, after logging in to CB Insights. (note: This research is only available to paid subscribers with access to CB Insider).If you aren’t already a client, sign up for a free trial to learn more about our platform.