Mindspeed to Cut WorkforceMonday, April 9, 2012
Newport Beach-based networking chip maker Mindspeed Technologies Inc. plans to cut an unspecified number of positions as it restructures following its acquisition of U.K.-based Picochip Ltd.
Picochip makes systems-on-a-chip for small cell base stations, an explosive growth market as the race to 4G supremacy plays out among the nation’s largest wireless carriers.
Mindspeed acquired Picochip in January for $51.8 million plus up to $25 million in additional benchmark payments.
Mindspeed expects to take a quarterly charge of $1.2 million to $1.4 million for severance costs.
Picochip employs about 165 people and has development centers in Cambridge, U.K. and Beijing, according to its website. It also operates sales and support offices in San Jose and in Shenzhen and Taipei, China.
Executives have said the Picochip acquisition increases Mindspeed’s operation scale and boosts its potential market to $3 billion by 2016 while offering cross-selling opportunities. The acquisition is expected to add to Mindspeed earnings in the second half, they said.
Picochip controls an estimated 70% of the 3G packet-access small-cell infrastructure market.
High-speed packet access helps improve speed while supporting more users on a network.
Mindspeed shares were down more than 3% at the close of trading Monday to a market value of about $189 million.