Largest Number of Investments Since Q1 2001
SAN JOSE, Calif. (Feb. 11, 2004) – The Fabless Semiconductor Association (FSA), the global voice for fabless and hybrid semiconductor companies and their foundry and supply-chain partners, announced today that the amount of funding raised by fabless companies sequentially increased 23 percent quarter-over-quarter (QoQ) in Q4 2003.
Thirty-nine fabless companies raised $483.6 million in Q4 2003, compared to 34 raising $394.9 million in Q3 2003. The $483.6 million raised in Q4 was the largest amount of funding in one quarter since Q1 2002, and the 39 fundings represented the most deals closed since Q1 2001. The FSA announced this information with the release of its Q4 2003 “Fabless Fundings” report.
The report also notes that fabless industry fundings continued to outpace other industries. According to VentureWire, the number of U.S. venture capital investments declined 16 percent year-over-year (YoY) in Q4 2003. However, the FSA’s research indicates that fabless semiconductor investments increased 44 percent YoY. Furthermore, the $483.6 million closed in Q4 2003 represented a 41 percent increase in terms of dollars raised YoY, compared to the $344.0 million raised in Q4 2002.
The FSA’s research identified 135 fabless companies raising $1.6 billion throughout all of 2003, compared to 109 fabless companies raising $1.6 billion in 2002, a 24 percent increase in the number of total deals closed YoY.
The FSA also found that the number of companies closing early rounds of funding continued to decline in 2003. Thirty-five percent of all funding deals closed in 2000 went to companies seeking their first round of funding, compared to 33 percent in 2001, 21 percent in 2002 and only 17 percent in 2003. In addition, the average amount of money raised in the first round also continued to decline. In 2000, the average amount closed in the first round was $15.8 million, compared to $8.8 million in 2001, $8.3 million in 2002 and $7.1 million in 2003.
“Even with the focus on increased fabless fundings in 2003, it is clear that emerging companies must still demonstrate a combination of proven technology, a strong business model and an experienced management team,” said Lisa Tafoya, director of research and projects for the FSA. “Proving profitability is the ultimate goal, and companies must develop concisely written business plans that reflect innovative methodologies and clear strategies for achieving long-term success. They must learn to stretch their seed dollars, meet aggressive milestones and prove they have the business acumen to achieve faster time-to-market.”
About the Fabless Semiconductor Association:
The FSA is the global voice of fabless and hybrid semiconductor companies and their foundry and supply-chain partners. Incorporated in 1994, the Association (www.fsa.org) is focused on the perpetuation of the fabless business model throughout the worldwide semiconductor industry. The organization encourages the relationship between semiconductor companies and suppliers; facilitates business partnerships; creates awareness of the fabless/outsourced business model; disseminates industry data; and fosters standards and policies.
FSA members include fabless companies, IDMs, foundry providers, packaging/assembly houses, intellectual property providers, electronic design automation companies, OEMs, photomask companies, design software companies, investment bankers, venture capitalists and other companies. FSA members represent more than 21 countries spanning North America, Asia-Pacific, Europe and the Middle East.
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