Mindspeed Technologies Inc. will make an unspecified number of job cuts, as the Newport Beach-based networking chipmaker restructures following its acquisition of U.K.-based Picochip Ltd.
Mindspeed aims to eliminate job overlaps through cuts as it integrates Picochip operations, according to a filing with the Securities and Exchange Commission. Mindspeed ex-pects to take a quarterly charge of $1.2 million to $1.4 million for severance costs related to the restructuring.
The company had $162 million in annual revenue in its fiscal year that ended Sept. 30.
Picochip had 162 workers before its acquisition. Mindspeed last week placed 62 Picochip employees into its Inducement Incentive Plan, which grants stock options for those entering employment with the company.
Picochip makes systems-on-a-chip for small cell base stations, a fast-growing market amid a race for 4G supremacy among large wireless carriers.
Mini Stations
The mini base stations help increase network density and improve coverage to help wireless carriers deal with soaring traffic and data loads from the spread of smart phones, tablets and other mobile devices.
“Small cells are one of the ways they can increase real capacity and coverage back into the network,” said Greg Scott, a senior analyst in the New York office of Los Angeles-based investment bank B. Riley & Co. “Carriers are going to need to do this.”
Campbell-based research firm Mobile Experts LLC predicts small-cell base station shipments will grow to 24 million units by 2016.
Officials touted the Picochip acquisition as boosting Mindspeed’s operational scale and expanding its potential market to $3 billion by 2016 while offering cross-selling opportunities. Mindspeed competed in a $700 million market before the Picochip deal.
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.
Picochip Plan
The acquisition is expected to add to Mindspeed’s earnings in the second half of 2012, as its offerings are ahead of the competition, Scott told the Business Journal.
Mindspeed acquired Picochip in January for $51.8 million and up to $25 million in additional benchmark payments.
Picochip has development centers in Cambridge, England, and Beijing. It also operates sales and support offices in San Jose and in Shenzhen and Taipei in China. n
