Fabless Revenue Hits $33B

Online staff -- Electronic News, 3/15/2005

The Fabless Semiconductor Association (FSA) today reported 2004 fabless revenue totaled $33 billion, 27 percent higher than 2003.

On a geographic basis, U.S. fabless companies represented 75 percent of Q4 2004 revenue, followed by Taiwan at 20 percent, Europe with 3 percent and Japan at 2 percent.

The top five fabless companies, ranked by calendar year 2004 revenue were led by Qualcomm, followed by Broadcom, ATI Technologies, Nvidia Corp. and SanDisk Corp.

While the fabless sector continues to experience year over year revenue growth, funding decreased in Q4, but the private industry still raised $1.8 billion in 2004, the largest amount since 2001 when it raised $2.5 billion.

Funding for fabless companies started strong, but both the number of funding deals and the investment amounts declined quarter-over-quarter for every quarter last year, with the exception of Q2.

Q1 2004 generated $560.1 million, compared to $543.7 million in Q2, $434.2 million in Q3 and $263.5 million in Q4.

“Venture capitalists have continued to gradually increase investment in fabless companies for the third year in a row,” said Philip Gianos, general partner with InterWest Partners and member of the FSA VC advisory board, in a statement.

“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,” he continued. “Low values realized from recent acquisitions are a prime reason for this movement."