London, 23 July 2003

The number of semiconductor companies raising venture capital funding is outperforming the overall venture capital market in the first half of the year. According to VentureWire, 76 semiconductor companies raised $897mn in 1H2003, down only 10% compared to the same period last year, despite sharp declines in overall venture capital funding.

At a breakfast seminar to discuss investment opportunities in the semiconductor sector held by technology corporate finance house FirstCapital, a panel of industry experts and venture capitalists concluded that the semiconductor sector was an attractive investment area for venture capitalists.  

Matthew Trowbridge, CEO of Renesas Technology Europe, said that the large integrated device manufacturers are interested in innovative products from start-ups in order to meet the needs of their customers, e.g. car manufacturers or mobile phone handset makers. He said “There are a lot of opportunities for start ups in the new ubiquitous computing era. Products need a lot of collaboration from different technology providers. Nobody can go it alone.”

There are also opportunities for companies addressing existing industry problems, in an environment where fabrication costs are spiralling and product lifecycles decreasing. Michael Risman, Director of Apax Partners said “We see opportunities for technology which will lower the barriers to market entry for chip companies, reducing the risk or costs of new product introduction, or reducing the time to complete in-house product development”.

This bodes well for semiconductor companies seeking venture capital financing. However Stan Boland, CEO and President of Icera Semiconductor sounded a note of caution. He said “The semiconductor industry is a very capital intensive business. To show the types of returns a venture capitalist requires you must be addressing a pretty big market, and match the amount of investment required to the market size”.

Hazel Moore, chairman of FirstCapital concluded “Venture capital funding of semiconductor companies has remained strong, which is particularly notable in the face of a generally weak funding environment. There are clearly still opportunities for talented management teams with strong customer propositions.”


About FirstCapital

FirstCapital is an investment bank that specialises in fund raising and mergers and acquisitions advice for high growth technology companies. Established in 1999, it has offices in London and Cambridge, UK. Clients include entrepreneurs, technology companies and investors in private companies.

Our team is experienced in a wide variety of deals, from growth companies to multinationals in both UK and international cross border transactions. We provide pro-active, informed, full service deal management, including assistance with strategy and planning, finding and approaching investors or M&A targets, valuations and hands-on transaction execution.

We work in partnership with our clients to achieve their goals, offering impartial advice and support based on our knowledge of the market and of each client's individual requirements, and sharing alongside them in the risks and the rewards of success.

FirstCapital is authorised and regulated by the UK Financial Services Authority.

For more information, contact: Hazel Moore, Chairman on +44 (0)20 8563 1563 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .