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Canada's Semiconductor Council Summit 2024 Key Takeaways

Attending the Canadian Semiconductor Council Summit in Ottawa (Tuesday, February 6th) was an excellent opportunity to participate in a focused discussion on Canada’s current and future semiconductor strategy. Not only was the discussion open and bringing in the key representatives from the relevant players present in Canada but there was also direct participation of key government officials. This direct coupling of discussion and (government-supported) execution made the Summit a unique event, superbly managed and led by Paul Slaby and his team. 

Building on Canada’s rich semiconductor history (who does not remember ATI, Newbridge, and Mitel to name a few), Canada today is focusing on growing its role in the semiconductor supply chain for EVs. The important role of Canada in this supply chain, ranging from power electronics to batteries, is highlighted by some of the key players choosing Canada for major parts of their operations. Infineon choosing Ottawa as its center of excellence for power electronics is a good example of a major player in the automotive semiconductor market choosing Canada as a key location for its activities. Research, development, and production of key components using the latest technologies such as GaN and SiC is going to be strategic to maintain and grow current market positions. 

New Deep-tech Project: Phonemic

TD Shepherd is pleased to announce our role as a strategic advisor to Phonemic, one of the Top 40 Startups of HTVD22!

Founded in 2020, Phonemic is a Polish startup specializing in design services for FPGA and ASIC. With a focus on efficient hardware implementation of compute-intensive algorithms, their expertise spans Digital Signal Processing (5G, LTE), cryptography, system-level design, and integration. 

Thanks to a strong team of engineers experienced in the semiconductor industry, Phonemic covers a wide spectrum of hardware development — navigating from algorithm optimization on the mathematical level along with RTL design and verification to FPGA bring-up, all the way up to embedded software development.

Phonemic's project portfolio includes full development of complex SoC on FPGA, custom specialized IP-Core development, and hardware acceleration of customers' target applications.

We look forward to contributing to Phonemic's ongoing success and innovation in the deep-tech industry.

High-Tech Venture Days 2023 Key Takeaways

The recent HTVD event brought exciting developments and improvements, as well as some valuable insights for the attendees. Here are the key takeaways from the event:

  1. HTVD was back at the old venue, a clear improvement over the 2022 venue, which was noisy. The table meetings were also much more part of the overall events as opposed to being on the side.
  2. There was a surge in corporate VCs participating in the event; this is very welcome when the cooperation between industry and startups will get more important, given the reduced activity of the regular VCs;
  3. The reverse presentations of the VCs are always good – it reduces the “distance” between the VCs and startups; not all events practice this, so we are glad to see HTVD do this as part of their program;
  4. The HTVD meeting app is one of the best I’ve seen used at such events. Most of them are not very practical nor user-friendly; however, the HTVD app is great in pretty much everything you would want to use it for, from planning to active use during the event;

The HTVD event continues to be a key player in the startup and venture capital world, and it is moving in a positive direction. 

Deep Tech Connect: A Deep Tech Innovation Forum 2023 Key Takeaways

The TD Shepherd team recently had the opportunity to attend the highly esteemed Deep Tech Connect event, organized by the Extreme Tech Challenge and HighTechXL.  

Deep Tech Connect is a premier gathering of visionaries, innovators, and investors who are shaping the future of technology. This event brings together cutting-edge startups, industry leaders, and venture capitalists to foster collaboration and explore groundbreaking advancements in deep tech.

Impressed by the quality of the pitches and surprised by several solid startups, scale-ups and alumni:  

•  Finnadvance: Prateek Singh 

•  Maaind: Dzera Kaytati 

•  HealthPlus.ai: Bart Geerts 

•  Vertoro: Michael Boot 

 Gazelle Wind Power: Jon Salazar 

•  Virtuleap: Amir Bozorgzadeh 

•  Incooling: Helena Samodurova 

•  Alphabeats: CEO Han Dirkx 

•  Spectrik: Rick Jongen 

•  Luper Technologies: Maarten Kieft 

•  Senergetics: CEO Frank Jacobs 

The introduction keynote from Peter Wennink, ASML was a good summary reflecting on the importance of perseverance and an ecosystem where innovation is not organized within a company but comes from the ecosystem among companies, including startups.

The keynote from Nicolas Autret, Walden, summarized their new report “The European Deep Tech Report” how DeepTech in Europe has grown strongly, the emerging areas in DeepTech and Deep Tech startup characteristics and risk-profile differences.  

Jean-Francois Bobier, BCG, expressed Climate change being an opportunity for Deeptech startups.

The breakout session with NXP Semiconductors confirmed and expressed the growing importance of supporting the startup ecosystem to drive innovation. There was some concern from the audience on the corporates walking away with innovative ideas from the startups.

Overall, the “Eindhoven region” was seen as a role model for a cooperative high-tech ecosystem among all companies. Besides further on stage forums and discussions, it was great to reconnect with many people. 

Collision 2023 Key Takeaways

TD Shepherd is thrilled to have attended Collision Conference 2023 in Toronto! Collision had lots of engaging sessions, interesting speakers, and amazing networking opportunities. The event served as a meeting ground for the brightest startups and visionary investors in the DeepTech space, highlighting the evolving landscape of technology.

We met many interesting Startups and Investors in the DeepTech space, and overall saw a shift in tone towards the space. As technology in the AI space continues to grow, major innovations in the fields of Energy, Storage, Processing and Sensing have to be implemented, and investors are realizing that the field of Deep-Tech is ripe with innovation and exciting startups to create these technologies. It's inspiring to observe how investors are recognizing the immense potential within the Deep-Tech realm, fostering a vibrant ecosystem for groundbreaking startups to create and implement these revolutionary technologies. 

Very exciting to see what's in store for the North American tech scene, as a new found focus on transformational technology is right around the corner, making it a really exciting time for anyone in the Deep-Tech space. At TD Shepherd, we are excited to be part of these significant advancements, ready to contribute our expertise and support to help with The Next Steps.

At Collision TD Shepherd attended the panel session on  “What is the new normal for seed investing” with a number of VCs on the pane (Everywhere Ventures, Cendana Capital, 2028 Ventures with Yahoo Finance as moderator). Of course, the main theme of the discussion was the high pre-money valuations of AI-themed startups. The conclusion of the panel was that high valuations would continue for some time, despite the reduced VC activity. Equally, relevant was the notion that the latest seed funding rounds seemed to stretch the period from the usual 18 months to 24 months. VCs are clearly of the opinion that the current downturn might continue for some time and want to make sure their investments provide a runway beyond that downturn. 

As more VC Centric panels were held throughout the 2nd day of Collision, one of the very interesting chats was regarding the current state of Growth Stage companies. An unfortunate reality that faces many companies that raised later rounds in 2021/2 is that they are now facing large valuation cuts, and possible down-rounds.

Large injections of lots of cheap capital caused many companies to go out and follow one metric: Growth at all costs. With this north star, large companies gloated up as much talent as possible to be able to grow their sales and R&D. 

With the changing economic picture now in 2023, there was a large shift from Growth to Efficient Growth, so that companies can now extend their runway and grow into their lofty valuations. This unfortunately has the real-life effect of downsizing and layoffs, which we are seeing across the industry. 

The VCs (Cathy Gao, King Goh, CFA, Sri Chandrasekar) mentioned many of the executive trends they are seeing in their portfolio companies to weather the times ahead: analytics for operational efficiencies, cutting away side-projects and focus on core offerings that bring revenue, look for partnership sales funnels to decrease the size of sales teams, or to look at other financing like venture debt.

Another interesting talk was on the topic of M&A, where the VCs talked about how they are seeing a large growth in M&A activity across the industry. Due to the current market trends, companies with large cash reserves are seeing great opportunities to consolidate their market, acquire locked-up talent, and even potentially cash locked in their purchase targets.

Although mostly a sobering talk, there were glimmers of hope as 2024 was mentioned as an overall optimistic and exciting time to invest. 

GSA European Executive Forum 2023 Key Takeaways

This year’s GSA event was again a combination of presentations with Q&A and panel discussions. The main focus of the event was—no surprise given that the meeting takes place in Munich—automotive and the (future) role of semiconductors in the automotive industry. Several of the presentations and the ensuing discussions are relevant for the outlook of the industry as well as the perspective of the different players in the eco-system. 

As a first it is interesting to hear from one of the tier #1 automotive companies about the impact of their semiconductor supply chain trouble during and after COVID-19. Joachim Kahmann, SVP Purchasing at Stellantis (owner of brands such as Peugeot, Chrysler, Fiat and Citroën). The impact of the shortage of semiconductors for Stellantis resulted in the inability to sell 1.3M cars…. A staggering impact for the #4 automotive producer in the world. No surprise then that automotive companies are now all focusing on getting a better grip on their semiconductor supply chain. 

Automotive manufacturers were hard hit in 2022 by a dramatic shortage of semiconductors. This shortage persisted throughout 2022 and impacted their production in a hitherto unmatched depth, highlighting again how many cars have come to depend on ubiquitous semiconductor components. Tesla being a lighting example of not being (overly) hurt by the semiconductor shortage, other automotive companies decided to ensure that in the future, their vulnerability is either eliminated completely or at least reduced to a manageable level. Stellantis provided a good insight into their semiconductor strategy going forward. This includes, similar to Tesla, taking charge of the design of key parts (mission critical parts) of the different automotive frameworks. Given the growth of the value of the semiconductor part in the automobile, this strategy clearly makes sense.  However, execution of such a strategy will neither be easy nor straightforward. The shortage on all types of engineers, from skilled designers to chip architects, will be just one of the complicating factors. The diversity of semiconductor components another. For the car manufacturers to get a better grip on their semiconductor supply chain, they not only need to grow their own in-house capabilities, they clearly need a higher-value relationship with the semiconductor industry. Only while that value is “adjusted”, will the semiconductor industry itself be prepared top “move”. 

Of course, when talking semiconductors, you have to mention EDA. Without EDA, no semiconductors. Synopsys is one of them, with a unique position in not just the EDA but also the IP (having the largest team working on semiconductor IP). One of its VPs, Yankin Tanurhan, provided an interesting view on the continued growth of data. Of course, since the rise of AdTech and MarTech we’re aware of the fact that data is the new gold. Synopsys’ view on the data and how AI will drive the further growth of data is very interesting, The vision provided here is that because of AI, data will grow even more rapidly because AI will shield the human “consumer” from the data deluge…. By using AI to consume the data (learn, infer, …), it enables an even faster growth of the amount of data. 

In relationship to that data growth, there is the ever-growing concern about the security of that data. As companies like Intrinsic ID have been focused on for the last 10 years or so, that security starts at the underlying hardware. Without a fundamental security on the hardware level, any software based security implementation will be vulnerable. The block diagram demonstrated at the event (courtesy Synopsys/Yankin Tanurhan), shown the challenges related to securing a System-on-Chip (SoC) are complex and need to be handled at the architecture level of the SoC, not as an afterthought. 

Intel was also present at the GSA meeting. Luca de Ambroggi, representing Intel’s Foundry Services, presented Intel’s chiplet approach and its Open System Foundry model. Intel’s chiplet approach is to deal with the continued increase in (system’s) complexity on one hand, while requiring vastly different underlying semiconductor process characteristics on the other hand. From leading-edge digital through RF and other complex analog/mixed-signal functions to DDR5 memory and photonics interfaces, rather than trying to integrate all in one process, the use of chiplets, placed and interconnected on a carrier is where Intel sees the future.  

As part of its chiplet approach, Intel/Luca de Ambroggi also presented the “full pyramid” which allows a customer to build its complete system. It starts at the silicon level, through the IP and EDA, the packaging and interconnect to the different software layers including the ISA(s) used to run the different CPU cores. Interesting to note is that Intel recognizes the presence of RISC-V as a key player in the CPU/ISA market, next to Intel’s own X86 and ARM. Equally interesting is the fact that Intel’s pyramid relies on a number of new standards under development, including the oneAPI standard. 

The Semiconductor Equipment Market 2022

SEMI (www.semi.org) published its overview of the largest semiconductor equipment markets for the year 2022. The year 2022 showed an increase of 5% over 2021, bringing the total to US$107.6 Billion. For those that doubt the leading role of Taiwan in the semiconductor manufacturing business, it is illustrative to note that Taiwan is number #2 on the list with a total billings value of US$ 26.82B, a growth of 8% compared to 2021. China, not surprisingly, is #1 with a total billing of US$ 28.27B but reflects a shrinkage of 5% as compared to 2021. Europe, ranked #6, representing about a fifth of that value, coming at US$ 6.28B. Although that represents a close to 100% growth (signaling the EU’s new strategy), it is clear that Europe’s dependency on Taiwan for its semiconductor supply is not easily casted away in a few years or so. Europe will have to grow at this rate for at least 4-5 years to match its growth in equipment purchases with its ability to supply its own (leading edge) semiconductors. 

IoT: The Perfect Storm?

SemiWiki, in its analysis of the state of IoT at MWC (IoT in Distress at MWC 2023 - SemiWiki) concluded that IoT today is in the perfect storm. It lists the key—mission critical—requirements for the IoT edge market such as high performance, ultra-low power, quality of service and fitting bandwidth. It argues that only the nimble and cost-efficient players can stay in the IoT business, citing the 2022 departure of Ericsson as a proof point. Using Ericsson departure as a proof point can be disputed. Ericsson had a very early start, at the time IoT was not well understood and in reality a label that could be stuck to several applications in several different markets making it hard to focus on one market and make a profit. Today, several profitable market segments are driving growth, not the least because the building blocks for solutions have indeed become ultra-low power while providing the right performance. In addition, the autonomous character of IoT devices is now coming in reach with next generation energy harvesting power management ICs, supercap energy storage and new types of energy harvesters. 

Startups and Finances – Challenging Your (part-time) CFO

As the recent demise of the Silicon Valley Bank is now illustrating, startups need to apply common sense to their finances. Where most startups Management Teams (MT) are fully focused on getting the money (raising a round) to fund their growth strategy, their focus turns to execution once the money is in the bank. Specifically, early-stage startups often omit further attention to the financial management of the company. If a (part-time) CFO gets added to the team, it is more to ensure proper monthly, quarterly, and yearly accounting procedures and to have an eye on the cash-0 point. As such, the CFO is often regarded as a somewhat isolated function within the Management Team and not challenged to the same degree as, e.g., the VP of Product Development. Challenging the CFO should go much further than just ensuring proper financial procedures according to GAAP and covering the yearly accounts. It must include important and well-maintained packages such as a financial risk analysis (including currency exchange risks), an up-to-date plan for managing the cash-0 point of the company, and a current analysis of the funding climate. The CFO, as a key member of the MT, must be challenged continuously to ensure the financial agility of the startup. Failing to master a specific technological challenge is one thing, failing to manage your finances properly is a very different thing. 

EDA Conference 2022 Key Takeaways

TD Shepherd attended the 2022 annual EDA conference (EDA as in European Defence Agency), which took place on December 8th in Brussels. The conference featured several panel discussions as well as regular keynote speeches. The most important takeaways from the conference were: 

  • the €70B increase in defence related investments until 2025,
  • the recognition of the importance of dual-use technology and its missing support in the current innovation landscape,
  • the need for easing procurement rules for the (European) Defence departments,
  • and last but not least, the need to be able to rapidly scale production when circumstances require this (industrialization of the supply chain).

The latter includes the drive to secure (synonymous with “localization”) that same supply chain.  

Hardtech2022 Key Takeaways

TD Shepherd was present at VentureLAB’s Hardtech conference, last week in Markham/Toronto, Ontario, Canada. This was the second time VentureLAB organized this event which is focused on DeepTech- in general and more specifically semiconductor startups in Canada. The setup of the event was build around a pre-selection of 8 deeptech startups which were present with a table-top as well as with a pitch. Startups ranged from photonics to AI processors, from AI-based quality control to smart building technology. Their stage ranged from early seed to Series A and Series B. One of the noteworthy aspects of the early stage companies was that their seed rounds were all targeting significant amounts, usually in excess of US$2M and in general more in the range of US$4-6M. 

HardTech was in its second year. Despite its early stage, the event has already gathered some interesting corporates (such as Intel) as well as regular investors. It is clear that the HardTech event is addressing a critical void in the Canadian startup eco-system. With Silicon Valley in close proximity Canada will have to make an all-out effort to ensure its talent will remain “local” and will not wander out to where the “easier” money is. 

TD Shepherd & Co. operated as the sole financial advisor to the shareholders of ItoM Holding B.V. in its acquisition by Robert Bosch GmbH

On Thursday, September 22nd, Robert Bosch GmbH and ItoM Holding B.V. signed an agreement covering the acquisition of 100% of the shares of ItoM Services by Robert Bosch GmbH.   

ItoM Holding B.V. was founded in 1998 by pioneers in the semiconductor RF and analogue/mixed-signal circuitry. Since its creation, the ItoM founding team has successfully created a market leader in semiconductor design services with an unmatched IP- and patent portfolio and a global authority in the field of RF and Analogue/Mixed-Signal (AMS) circuits.  

TD Shepherd & Co supported the shareholders of ItoM Holding B.V. and the Management Team of ItoM Services along the full acquisition path including the restructuring.  

Further information on the transaction can be found here:

https://www.linkedin.com/feed/update/urn:li:activity:6979012172408315904/ https://www.linkedin.com/feed/update/urn:li:activity:6978784818792701953/ 

Conference Collision 2022 Key Takeaways

We had the opportunity to attend Collision Conference in Toronto this year, and we wanted to share some key takeaways with you. Collision is North America's fastest-growing tech conference which was held from June 20th to June 23rd, 2022, in the city of Toronto, Canada. The event included tech experts, some of the world’s best speakers and market leaders. 

Across the board, despite a significant slowdown in funding, there is an incredible amount of innovation happening in the tech sector. DeepTech fields such as AI, AR/VR and autonomous vehicles continue to move forward pushed by new and existing startups. Corporate funds are replacing part of the slack in VC funding. 

Some of the key takeaways from Collision were: 
1.  The Tech sector has incredible innovations coming down the pipeline, especially in the field of AI. 

2. Although hardware companies were underrepresented, the ones present showed great promise and an array of future applications.  

3. From an investment side, although many investors are aware of a major slowdown in funding, this is the best time to find the future winners in the DeepTech arena.  

4. Building on the last point, this is a great time for early-stage investment, as many fantastic companies will emerge out of the current struggle and competition.  

HTVD22 Key Takeaways

TD Shepherd has participated as a partner at the HTVD 2022 annual event. This year the event took place from Oct 10th through Oct 11th in Dresden, Germany. 40 DeepTech Startups have participated in HTVD22 and presenting their pitches. Participants represented various fields of engineering and mechanical engineering, micro- and nanotechnology, information and communication technology, environmental and energy technology, materials science, life sciences, and others.  

Some of the key takeaways from HTVD22 were: 

1. A new credit instrument for growth companies with a minimum ticket size of EURO 5M (the minimum pool size), allowing for flexible “on-demand” dipping; 

2. An increased interest by Corporates to provide investment as well as loans to startups operating in their eco-system and important to the innovation cycle in their part of the industry; most of this through informal off-balance sheet funding mechanisms; 

3. A continued drive of innovation in the OLED sector; a new badge of startups focusing on next-generation OLED materials and stacks; 

4. Two of the teams supported by TD Shepherd were also present at the HTVD; Phonemics presented its Voice Activity Detection (VAD) and cryptographic IP lines in combination with supporting design services for customization; Heteromerge discussed their multi-material solutions for 3D micro-printing with various investors and successfully networked with the community.  

Market Dynamics of M&A in the First Quarter of 2022

The global market of mergers and acquisitions (M&A) in the first quarter of 2022 decreased by 29% compared to the same period in 2021, writes Barron's, citing Dealogic data. 

In January - March of this year, 6,436 M&A transactions were announced worldwide, compared to 9,022 at the beginning of last year. The total value of transactions for the same time fell from $ 1.4 trillion to $ 989.4 billion. A decline in both quantitative and monetary terms was observed in the U.S.: In the 1st quarter the number of deals fell from 2384 to 1958, and their total value - from $ 685.4 billion to $ 503.5 billion. 

The number of mergers through SPACs, which last year accounted for about 20% of M&A deals in the U.S., dropped markedly. From the beginning of the year to the end of March,   only 16 such deals were recorded. Their total value amounted to $ 7.6 billion. This is 78% less than the same period last year - 74 deals through SPAC amounting to $ 173.2 billion. 

"M&A activity will slow slightly compared with last year as volatility in financial markets introduces an element of uncertainty," said Jonathan Rauner, vice chairman of Nomura Japan. He added that with rising interest rates and volatility in the stock market, it is becoming increasingly difficult to value businesses and make public companies private. 

Source: Dealogic 

Semiconductors Sales Increase 2022

According to the Semiconductor Industry Association, semiconductor sales worldwide reached $151.7 billion in the first quarter of 2022, an increase of 23.0% over the first quarter of 2021. Statistics on semiconductor sales are compiled by the World Semiconductor Trade Statistics (WSTS) organization.  

“Global semiconductor sales remained strong during the first quarter of 2022, increasing across all major regional markets and product categories compared to the first quarter of last year” said John Neuffer, SIA president and CEO. “For the month of March, sales into the Americas continued to lead all regional markets, increasing by 40.1% year-to-year.” 

 Apart from the increase in sales in the Americas, sales were also up compared to March 2021 in Europe (25.7%), Japan (20.4%), Asia Pacific / All Others (17.9%), and China (17.3%). China, Japan, Asia Pacific, and Europe saw month-over-month increases, while sales in the Americas fell slightly (-1.5%). 

Source: www.semiconductors.org

Arioso Systems GmbH, 2022

The TD Shepherd team congratulates Arioso Systems GmbH on their successful acquisition by Bosch Sensortec. Arioso’s all-silicon MEMS-based uSpeaker technology enables at-cost volume manufacturing while reducing the size of the speaker as well as the power consumption. These are essential characteristics for the next step of the “internet of voice”: true wireless in-ear microspeakers.