FSA, voice of the global fabless business model, announces the results of its “Q4 2004 Global Fabless Fundings & Financials Report," which reveals that 2004 fabless revenue totaled $33 billion, a 27 percent year-over-year (Y-o-Y) growth.
Geographically, U.S. fabless companies represented 75 percent of 4Q 2004 revenue, followed by Taiwan at 20 percent, Europe with three percent and Japan at two percent.
While the fabless sector continues to experience Y-o-Y revenue growth, fundings decreased in 4Q 2004. Despite funding slowdowns, the private fabless industry raised $1.8B in 2004, its largest funding amount since 2001 when it raised a record $2.5B.
Funding for fabless companies started strong, but both the number of funding deals and the investment amounts declined quarter-over-quarter for every quarter in 2004, with the exception of 2Q’s number of fundings. The first quarter of 2004 was the most successful in terms of dollar amount raised, generating $560.1 million, compared to $543.7M in 2Q, $434.2M in 3Q and $263.5M in 4Q.
"Venture capitalists have continued to gradually increase investment in fabless companies for the third year in a row,” said Philip T. Gianos, general partner with InterWest Partners and member of the FSA VC advisory board. “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. Low values realized from recent acquisitions are a prime reason for this movement."
The report includes an end-market breakdown of funding investments, financials covering more than 150 public companies and analyst forecasts.