Mannerisms

Gera contrasted the start-up scene today with the start-up scene a decade ago, and drew some telling contrasts.

A decade ago: The fabless model was fashionable and there was a reasonable number of fabless start-ups. Now there are too many of them.

Ten years ago: ASICs were faster and cheaper to produce. Today that's far from the truth. They can cost $60 million at 45nm and take a year or more to design and verify.

A decade ago: There were good barriers to entry; now tools, especially in the digital domain, have lowered the barriers.

In 1998: "Decent but not impossible amounts of capital were needed", said Gera, "now, close to impossible amounts of capital are needed for digital chips."

A decade ago: Exits were possible and happening. Now: Gera's comment on exit opportunities is: "Ha Ha!"

In 1998: A major infrastructure boom was underway; now the 8industry is consumer focussed and targeting healthcare and the environment.

A decade ago: "The industry saw great promise in selling chips for cellphones", said Gera, "now there's a realisation that you need to deliver solutions. And they are expensive."

In 1998: The US and EU were dominant; now the dominant geographies are China, India, Russia and the Middle East.

Ten years ago: The economy was healthy; now were headed for recession.

In 1998: "Getting a chip was key", said Gera, "now you need customers, revenue, and profitability."

But don't worry. As it's all based on  fashion, the VC industry will come back. In 2013, reckons Gera, things will be very differenet. This is what we can expect:

.     Wafer costs will be significantly cheaper;

.     There will have been couple of fabless IPOs which will have achieved billion dollar market caps;

.      Demergers will create more acquires. Broadcom will be hungry again.

.     Hunger for innovation will lead to surviving fabless start-ups being bought for $500   million to $1 billion in competitive deals. A couple of those will have involved companies less than five years old.

.    Analogue will still be there, never having ceased to be a low-cost, high barrier to entry play.

.   VCs will be saying fabless start-ups are the 'way of the future'.

.    Silicon South-West meetings will be crammed with VCs.