SAN FRANCISO—Semiconductor companies raised $231.6 million in venture capital during the third quarter, a decrease of 44 percent from the second quarter and a year-over-year decrease of 57 percent from the third quarter of 2007, according to a new report from the Global Semiconductor Alliance (GSA) trade group.

The report, which says a total of 21 fabless and integrated device manufacturer (IDM) companies received funding during the quarter, confirms the observation that venture capitalists are investing less in chip companies because of higher design costs and consolidation, according to the GSA.

The number and value of fabless and IDM funding deals decreasing for two consecutive quarters, according to the GSA.

Thirty-five companies—including chip companies and providers of products or services to the semiconductor and solar industries—raised $511.7 million in the third quarter, down 4 percent from the second quarter and 36 percent year-over-year, the GSA said. The total number of semiconductor deals closed in the quarter decreased 10 percent quarter-over-quarter and 44 percent year-over-year, according to the trade group.

For the third consecutive quarter, the semiconductor IPO market saw no venture-backed companies go public, the GSA said. The organization noted that Avago Technologies did file for an IPO on Aug. 21. Avago has not set a date for the offering.

The GSA's Q3 2008 Semiconductor Funding, IPO and M&A Report is available free to GSA member companies and for $300 to non-members through the organization's Web site.