Drop In Semiconductor Investment Signals Soft Semiconductor Market

The Global Semiconductor Alliance (GSA) has released its Q3 2008 Semiconductor Funding, IPO and M&A Report. This comprehensive quarterly report includes detailed trend analysis, regional breakdowns and end-market breakdowns of semiconductor funding, initial public offering (IPO), and merger and acquisition (M&A) data for fabless companies, integrated device manufacturers (IDMs), semiconductor suppliers and solar suppliers.

The report findings confirm the observation that venture capitalists are investing less in fabless and IDM companies because of higher design costs and consolidation, with the number and value of fabless and IDM funding deals decreasing for two consecutive quarters. In Q3 2008, 21 fabless and IDM companies raised $231.6 million, a dollar amount decrease of 44 percent quarter-over-quarter (QoQ) and 57 percent year-over-year (YoY). The total number of fabless and IDM transactions closed in Q3 2008 decreased 13 percent QoQ and 45 percent YoY.

When analyzing M&As involving fabless and IDM companies, the volume and value of announced deals accounted for 55 percent and 34 percent of the overall Q3 2008 semiconductor M&A total, respectively.