Semiconductor financing: Recent trends

After experiencing strong growth for several decades, the semiconductor industry has gradually transitioned to a mature industry. Overall market growth has substantially moderated; the global market is expected to grow at just 0.3% next year to reach a value of $341 billion, compared to a 7.6% compounded annual growth rate from 1990-20151. At the same time, the amount of capital and time required to fund a start-up semiconductor company through profitability has increased substantially. These factors make it more challenging to access capital to fund new ideas and the industry will require new financing models to support innovation in the coming decades. Despite these headwinds, there are pockets of strength in areas like power, sensors and automotive. In the power semiconductor market, for example, growth continues to outpace the overall market driven by demand for higher efficiency and smaller form factors.