Regional Fabless funding continues
A report from the Global
Semiconductor Association (GSA) shows that while
semiconductor company funding
38
declined the fabless sector had no such concerns with continued investor interest.
I
n July 2011, four semiconductor companies raised $81.6 million, down 46.8% from the $153.5 million raised in June 2011. However, funding deals increased 92.9% from the $42.3 million raised in July 2010. The month-over-month (MoM) decrease was due to a smaller number of companies being funded in July 2011. The significant year-over- year (YoY) increase was largely due to companies in July 2010 not disclosing their deal values and companies reporting higher deal values in July 2011, with Bridge Semiconductor receiving a fifth round of funding valued at $60 million. The number of deals decreased by eight MoM and by three YoY. In July, fabless companies were the only semiconductor companies funded. This marked the third month in 2011 that an IDM company was not funded. It was the second month that a semiconductor supplier was not funded. Two of the companies funded in July are U.S. based, while one is European and one in Israel. The rise in public offerings and corporate acquisitions continue to keep a lid on VC investing. “Venture investment has held steady as companies either plot an exit or use creative financing strategies like government grants, corporate leasing or project financing to fuel growth,” said Jessica Canning, global research director for Dow Jones VentureSource.
IPO Activity
For the second consecutive month, zero semiconductor companies priced. However, July saw two semiconductor companies file for an initial public offering. Semiconductor and clean energy technology platform company
Intermolecular announced that it had filed a registration statement with the SEC for a proposed initial public offering. Morgan Stanley, J.P. Morgan Securities and Barclays Capital will act as joint book-running managers for the offering with Pacific Crest Securities LLC and Needham & Company, LLC as co-managers. Cirtek Electronics, which has been in business for more than 25 years, provides turnkey solutions that include package design and development for semiconductor devices. BDO Capital and Investment Corp is the underwriter for the offer. This filing marks the second IPO in the Philippines this year.
According to findings from Merrill DataSite, the second half of 2011 is expected to be flat or weaker when compared with the first half. “Increased IPO transaction volume
throughout the first half of 2011 is a direct result of increased confidence in our country’s economy,” said Ed Bifulk, president of the Merrill DataSite virtual data room business at Merrill. “As we move into the second half of the year, however, the number of IPO transactions may decrease, depending upon the economy, as well as the actions of many highly valued Internet companies and investor demand.”
M&A Activity
In July 2011, the number of semiconductor mergers and acquisitions (M&As) announced (i.e., M&As of entire fabless, IDM and semiconductor supplier companies, not sectors/product lines or foundry facilities) increased by three MoM and one YoY. The number of deals that included a fabless or IDM company increased by three MoM and remained the same YoY.
The number of semiconductor supplier
deals remained the same MoM and increased by one YoY. According to Smith and Associates’ MarketWatch Central, the semiconductor and electronics industry is forecast to experience continued revenue growth during 2011, making an increase in M&A activity throughout the remainder of the year nearly certain.
© 2011 Angel Business Communications. Permission required.
www.euroasiasemiconductor.com Issue IV 2011
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