FSA Panel on Fostering, Funding and Focusing on the Future of Innovation

Add comment August 21st, 2007

I attended today’s Fabless Semiconductor Association Distinguished Speaker Series Luncheon Panel on “Fostering, Funding and Focusing on the Future of Innovation.” It was time well spent. It was moderated by Brian Fuller, the former Editor-in-Chief of EE Times, and now a VP with Blanc & Otus.

Brian opened with an analogy between the US railroad industry before and after the first transcontinental connection was completed in 1869. Considered the greatest US technological feat of the 19th century, the railroads’ focus shifted from engineering to operations and marketing. It was a panel with deep experience in the industry.

• Syed Ali, President, CEO & Founder, Cavium Networks
• Paul Franklin, Vice President of Operations, Atheros Communications, Inc.
• Alan Gorlick, Member of Faculty, University of Phoenix
• Jack Harding, Chairman, President & CEO, eSilicon Corporation
• Chris Rust, General Partner, U.S. Venture Partners

The economics of a new (fabless) semiconductor startup (note that integrated semiconductor fabrication operations are the province of a few major players, these days fabs are funded by governments) requires tens of millions of dollars of risk capital to reach a break-even operation level. A mask set alone may set you back between two and three million dollars. New ventures are the province of serious folks with deep experience, as Chris Rust remarked of other VC firms that had shifted new investment focus away from semiconductors “the tourists have gone home.” It’s a very different proposition from starting a software company, although EDA is more challenging than Web 2.0.