But two consecutive quarters of growth does not necessarily translate into a trend.
"One dot on a piece of paper is good. Two dots are a better indicator, but it takes at least three dots to indicate the start of a trend," said Jim Feldhan, president and co-founder of Semico Research.
Venture investments in privately held fabless semiconductor companies rose to $423.4 million in the first quarter, up from $344 million in the previous quarter, according to the Fabless Semiconductor Association's report. The third quarter brought in $299.8 million.
Investments in these companies have been spurred by a recent rise in average chip prices and expectations that the market for fabless chips will grow as much as 15 percent this year, analysts said.
The last time there was a back-to-back increase in venture capital investments in fabless chip companies was the third quarter of 2000.
"The venture capital community is continuing to invest in the fabless space, albeit at lower levels than the past three years," said Mark Stevens, a partner at Sequoia Capital and a FSA venture capital advisory board member, in a statement.
Investors are most drawn to fabless companies that develop chips using existing standards and have a prospect of high-volume business, he said.
One such company is Matrix Semiconductor, which received $52 million in the quarter,for that period. Matrix designs flash memory chips that are manufactured with standard materials and techniques. The company is targeting its chips for portable electronic devices, such as mobile phones and digital cameras--all high growth areas.
Matrix was one of 35 fabless chip companies funded during the first quarter. This sector accounted for 12 percent of all venture funding during the three-month period, up from a 7 percent slice in the fourth quarter, according to the report.
The fabless semiconductor industry is expected to rebound this year. And given it takes about a year to go from chip conception to finished product, venture firms need to start funding those companies now, Feldhan said.
"That's why we're starting to see the VCs come out of the closet," he added.
But analysts also note venture capitalists will need to be highly selective in their fabless chip investments, given the industry is undergoing consolidation. And that makes the environment ever more difficult for start-ups.
"The big established players will control most of the growth that's expected this year," said Mario Morales, vice president of IDC's global semiconductor research. "It'll be a tough time for the next two years for small companies and start-ups."