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23rd January 2015

Start Up Stimulus Suggestion

Mike Devereux

Mike Devereux

The popular view these days is that semiconductor startups are too expensive, take too long and the return on investment is simply not there to justify the risk and capital requirements. Some people are just complaining about it, but luckily there has also been a lot of research, with a view to de-risking the proposition and making startups more attractive to potential investors and partners.

The best suggestion I have seen is that the industry create a structure such that semiconductor startups source intellectual property and capital from more established players in the field. This would not only reduce the initial capital requirements for the startup but instantly make them more interesting to VCs.

The startup would need to offer something innovative (as all starts ups do), building on non-differentiated features such as I/Os, interfaces and standard components. This would be the IP which they could then leverage from more established players.

The only way this would work would be if a deal could be structured to allow it to be mutually satisfactory for both sides without the more established players having too much power over the technology and future funding partners. Perhaps we need a public consensus from among the Top 10 chip companies to work together to break the log jam for semiconductor innovation and allow further deal flow to happen in this space.

Would be interesting to hear your thoughts on this.  Please do email me.

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