Semiconductor startups dropping like flies

Last week was definitely not a good one for semiconductor startups. Every other day an announcement appeared proclaiming the end for one startup or another. There was Evident Technologies, a company that specialized in Quantum Dot Products and Light Emitting Diodes (LEDs), which filed for Chapter 11.Then there was CSwitch, a startup specializing in configurable switch array chips for next generation networks, which seized operations according to sources. And finally, there was MetaRAM, a company that worked on quadrupling the DRAM capacity of existing systems using existing DIMMs.

We profiled MetaRAM in March of last year, shortly after the company emerged from stealth mode. It was backed by several prominent venture capital firms including: Kleiner Perkins Caulfield & Byers, Khosla Ventures, Storm Ventures, and Intel Capital. This just shows you that having prominent VC backing is not a guaranteed indicator of success. Already back then we had a couple of concerns regarding the MetaRAM technology: First, with increasing DRAM frequency, how long would MetaRAM be able to hide the latency of their chipset via clever buffering of reads and writes? Second, it was inevitable that memory controllers would enable support for ever larger amounts of memory, possibly making MetaRAM technology irrelevant? Whether any of these was the actually reason for the company ceasing operations we might never know. The company’s website seems to be down, and as far as I’m aware nobody has been able to reach any of the company representatives for an official comment.

The issues that lead to troubles for the other two semiconductor startups are somewhat clearer. CSwitch was simply unable to raise another $10 million in funding in order to bring its chips into mass production. The company is currently negotiating to sell its assets, and with some luck we might see the technology hit the market yet in the same way Ambric’s technology did earlier this year. Evident’s issue was a bit different, in that the company announced this it was filing for bankruptcy protection due to exorbitant costs associated with a patent infringement case that was brought against the company by a large California-based life science company. The good news here is that while in Chapter 11, Evident intends to continue their research and development, as well as commercialization of their technology.