附近上门

Editor鈥檚 note: Mergers & Money is a monthly column by Senior Reporter Chris Metinko that covers dealmaking and the flow of venture capital in the enterprise tech space.

There may be a shortage of semiconductors, but there’s no lack of venture funding to companies in the chip space.

While most of the talk around semiconductors revolves around disruptions in the supply chain, the industry actually saw an unprecedented amount of venture capital in 2021鈥攁s well as one of its biggest M&A years ever.

The beginning of the new year also indicates that while venture dollars may be down in 2022 so far, dealmaking seems poised to still make headlines.

VC-backed semiconductor startups鈥攚hich includes everything from chipmakers to design firms to hardware developers鈥攕aw more than $6.4 billion in funding last year, 附近上门 numbers show. That鈥檚 the most in at least five years and easily bests the $3 billion seen in 2020.

Deal flow also was healthy, with 166 rounds being announced last year, just below 2018鈥檚 total of 168 which is the high-water mark of the last five years.

Some of the largest deals include:

• In April, Palo Alto, California-based hardware and integrated systems developer closed a $676 million Series D at a $5 billion-plus valuation;
• In August, China-based , a developer of聽 integrated chips, closed a $473.7 million Series B, and then followed that with a $395.2 million Series C in December; and
• In November, China-based , a provider of graphics processing unit technology, raised a $316.2 million Series A.

Of course, those rounds were raised against the backdrop of a perfect storm in the industry. The pandemic and supply chain disruptions shook things up just as more chips were needed for the exploding amount of connected devices and emerging sectors like more autonomous vehicles and robotics.

While those issues still remain, 2022 has started off slow for companies announcing funding. Thus far this year, only 25 rounds in the semiconductor space have been announced and totaled only $175.9 million. Still, a few rounds like the ones mentioned above could quickly pull those numbers up.

M&A dealmaking

Although funding rounds seems to have dried up this calendar year, M&A dealmaking remains in the news鈥攅ven if some of these headlines are for deals that are now dead.

The month started with the proposed $40 billion / deal on its last legs before Nvidia, the most valuable semi company in the world, announced it was pulling out of what would have been the biggest semiconductor deal in history.

The deal, like many semiconductor deals in the past, faced pressure from a vast array of regulators concerned the proposed marriage would stifle competition. The suit in December to block the deal, while both the British and Chinese expressed a myriad of concerns.

As that deal was dying a slow death, Santa Clara chip design giant announced a $5.4 billion deal to buy Israel-based chipmaker . The purchase seems to be the next step in Intel鈥檚 push to create a large foundry operation鈥攊.e. manufacture more chips and offer services to other chipmakers and designers鈥攚hich .

The deal would be the largest the industry has seen since last December when Billerica, Massachusetts-based announced it would acquire Aurora, Illinois-based for $6.5 billion.

Last year saw 54 M&A deals in the semiconductor space, the most since 2015 when there were 56, according to 附近上门 data. VC-backed companies were not left out of the dealmaking, however, as 17 such semiconductor companies were scooped up last year, the most since 18 were acquired in 2016.

Two deals involving VC-backed companies passed the $1 billion mark last year:

• 鈥檚 acquisition of聽 Santa Clara, California-based for $1.4 billion in January 2021.
• China-based $1.4 billion purchase of South Korea-based in March of last year.

While dealmaking has been slow this calendar year鈥攆ewer than a half dozen鈥攄eals such as the Intel/Tower proposed marriage show the heat is still in a sector where demand has never been greater with so many people needing to be connected.

That heightened investment interest should only continue to build as more tech giants such as and unveiled plans to design their own chips and more focus is put on chip design and optimizing chips, which ideally could cut down on the amount of chips needed and likely decrease the pressure currently on the tight supply chain.

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