The first signs of the coming venture capital winter were spotted in the second half of 2008, and then it descended with a vengeance.

Moshe Gavrielov, president and CEO of programmable logic vendor Xilinx Inc. (San Jose, Calif.) was soon warning that venture capital would not come back to semiconductor startups even after the current economic crisis had passed. The sums had gotten too high and the payback too low in chips, and other sectors, such as green technology, were coming to the fore that offered VCs a better cost/benefit balance.

"VC investment in semiconductor companies will drop precipitously. It just does not meet the profiles they [VCs] are looking at, and they have other places where they can put their money," Gavrielov told an audience at the Semico Summit in March.

Gavrielov was interpreting data from the Global Semiconductor Association (GSA) that did indeed show a three-year decline in fabless semiconductor investment, from a peak of about $2 billion in 2006.

GSA president Jodi Shelton had a different read on the data. "VC money has been put on the side, but it has evaporated for all startup companies, not just semiconductor startups," Shelton told EE Times in April. "VCs will look at other sectors, but [venture capital] hasn't dried up" for chips.

That's cold comfort to companies like Tzero Technologies Inc., a casualty of the shakeout in the ultrawideband sector that commenced in 2008 and accelerated this year.

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