Silicon Catalyst: Semiconductor Incubator

Walk into any hall at CES this year and you’re overwhelmed by the number of startups. Try doing the same at any semiconductor show, though, and the picture looks far different. Because of the startup capital required, and the amount of time it takes to see a return on investment, semiconductor entrepreneurs are having a much tougher time.

Enter Silicon Catalyst, an incubator that was just started just to fund silicon startups.
“Sand Hill Road treats silicon startups like plutonium,” said Mike Noonen, co-founder of Silicon Catalyst. “The irony is that this is one of the most exciting times in the semiconductor industry.”

The company’s stated goal is to cut costs for entrepreneurs creating silicon companies and to build a coalition of companies and investors who see the need for new startups. That coalition now includes Synopsys, TSMC, and Keysight EEsof EDA, which will identify the best of the early stage startups and provide funding and mentoring. The first companies selected by that coalition will be announced later this quarter.

“We anticipate we’ll fund 10 companies this year,” said Noonen. “That will include more than $100 million in support and funding. We also will offer them access to the world’s leading tools and foundries.”

He noted that the challenge is to “right-size” the cost of semiconductor innovation and lay the groundwork so companies can bring their technology to market more quickly. It sets the stage for potential acquisitions, which for startups can mean innovation through acquisition because of the increased resources and reach of established companies. It also is a way of outsourcing R&D for the semiconductor industry, which cannot develop new technology at anywhere near the cost of startups.

“What we’re doing is de-risking the cost of innovation,” said Noonen, who most recently was executive vice president at GlobalFoundries. He is one of three co-founders at Silicon Catalyst, along with Dan Armbrust (former CEO of Sematech) and Rick Lazansky (founder of Denali Software).