Earlier this year, CB Insights examined venture capital investment in the Semiconductor industry back to 1998, and asked whether Apple’s vertical foray into Semis with their acquisition of Intrinsity would spur further investment in the industry.
The early investment numbers are in for 2010, and barring an incredible bounce back in Q4, the outlook isn’t encouraging for semiconductor venture capital investment. Although venture investment dollars have already surpassed those of 2009, 2010 could be the slowest year for Semiconductor VC deal flow in the US since 1999. At present, the funding levels for 2010 are similar to 2009 VC funding levels which as you may recall was a historically bad year for venture capital all around. While other sectors and industries have bounced back in 2010, semiconductors do not appear to be following a similar trend.
After a promising start in Q1 2010 when Semiconductor investment exceeded $200M, Q3 levels have reverted to the sub-$100M quarterly level we were accustomed to seeing in 2009. The chart below illustrates semiconductor venture capital data tracked by CB Insights from 1998 through Q3 2010.
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