Touchstone Semiconductor falls prey to hard times?

-February 12, 2014

I have heard sad information that Touchstone Semiconductor assets are being liquidated. It seems that a tough US economy, tremendous competition from their established competitors, some recent new product offerings that were touted as improved replacements for competitor’s solutions and their basic foundation strategy of second-sourcing was not enough to gain traction for the growth they needed.

I know that procurement people really like second sources, but start-ups like Touchstone are viewed as a risk until they are more established with a very solid financial foundation and a guarantee of smooth product delivery flow, especially from a fabless company. It takes years to gain the confidence and respect of buying arms of companies that have viable second sources from other solidly established companies.

I was very pleased to see such a start-up emerge right in Silicon Valley in 2010, as a company whose products were low power, low voltage alternatives to competitor’s solutions. I thought it very bold to go after the established analog semiconductor companies existing sockets and new business as CEO Brett Fox and his team and I like to see new analog businesses in the industry. Good competition breeds new and better products, better pricing and more innovation.

Some events that signaled trouble to me were the fact that the company sent me their last blog in mid-September 2013 and I had seen very few news releases of new products around that time as well. This was strange because there were a flurry of new releases prior to that last summer, even entries into new product areas as data converters.

The company received $12M funding in Series A funding from Opus Capital and Khosla Ventures at their beginning in 2010. This funding may have dried up (I am speculating)

More to come as I speak to people close to the company

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