SVG Capital, one of the investors in the private equity buy-out of Freescale Semiconductor, has written down the value of its Freescale stake from £147m to £123m.

SVG's move follows the write-down of the investment of another private equity company, KKR, in another semiconductor company, NXP. KKR wrote the value of its NXP investment down by 25 per cent.

Bonds, secured on Freescale's assets, sold by KKR to finance the buy-out of Freescale, are now trading at 74 cents on the dollar.

Both the NXP and Freescale deals were done in 2006 to the astonishment of semiconductor industry leaders who regarded the thinking as askew, and the valuations extravagant.

"A lot of people see semiconductors as a more mature industry. I think they're wrong," said Wim Roelandts, CEO of Xilinx, back in 2006 when the NXP and Freescale buy-outs were done, "I think there are still upcycles and downcycles and if you have a downcycle in the semiconductor industry, these investments are going to look very foolish."

Back in 2006, the private equity purchasers of NXP and Freescale were claiming that they made their acquisitions at the bottom of the cycle. At the time, Roelandts disagreed: "If anything we are probably at the top of the cycle", he said, "people are talking about a downturn in 2007/2008."

At the same time, of course, there's been the credit crunch, and the banks aren't lending so much or so cheaply as they were. "Capital is not nearly as plentiful as it was a year ago and the cost is much higher," said Henry Kravis, co-founder of KKR.

Their experiences in the semiconductor industry may persuade the private equity companies to stick to their knitting which is investing in mature industries, with assured cash flows, where they can squeeze costs.