Fabless revenues reach US$33 billion in 2004
But despite the strong growth, funding for fabless companies fell off in the fourth quarter of 2004, amid fears that the semiconductor sector was going to experience a slowdown in 2005. Funding for fabless companies started strong in 2004, but both the number of funding deals and the investment amounts declined each quarter for every quarter in 2004.
The first quarter generated US$560.1 million compared with US$543.7 million in the second quarter, US$434.2 million in the third quarter and US$263.5 million in the fourth quarter.
Despite the fall off in funding, the private fabless industry still managed to raise US$1.8 billion in 2004, the highest amount since the record-breaking US$2.5 billion in 2001.
"Venture capitalists have continued to gradually increase investment in fabless companies for the third year in a row," said FSA board member Philip Gianos.
"The trend is towards earlier stage investments and lower capital commitments because venture investors prefer capital efficient companies and are continuing the move towards outsourcing and offshore development to lower capital requirements. Low values realised from recent acquisitions are a prime reason for this movement."
