The biggest change in Orange County’s semiconductor sector isn’t reflected on our annual list of the largest chipmakers operating here.
Last week Irvine-based Broadcom Corp., the county’s largest chipmaker by local workers, made a big hire, enlisting Philips Semiconduc-tors boss Scott McGregor as its next chief executive.
McGregor, now based in Europe, plans to take the reins at Broadcom in January, nearly two years after cofounder Henry “Nick” Nicholas stepped down amid changes at the chipmaker and his own family issues.
McGregor is set to replace Alan “Lanny” Ross, who came out of semiretirement to lead Broadcom through a rebound, though now Broadcom and other chipmakers are wrestling with a slowdown.
For the past three years, McGregor has led the chip arm of Amsterdam, Netherlands-based Royal Philips Electronics NV. The chipmaker turned profitable late last year after a string of losses during the technology downturn.
McGregor brings experience in wireless and consumer markets, which increasingly are important to Broadcom.
After cutting about 500 jobs in late-2002, Broadcom has been hiring in the past year. The chipmaker easily held on to the No. 1 spot on our list with 1,163 local workers, up 11%, or by 114 people, in the past year.
Companywide, Broadcom’s employment grew 21% to 3,304 workers.
For the 12 months through June, Broadcom saw sales surge 64% to $2.1 billion, reflecting the chip sector’s rebound that started last year but now shows signs of tapering.
Last month Broadcom reported solid third-quarter earnings but warned of slower sales with a buildup of inventory and losses to Intel Corp. in the market for server chips.
Chip companies could be approaching a rough patch in the coming year. El Segundo-based iSuppli Corp. trimmed its chip forecast for next year, saying sales growth could slow to 10% for 2005, or half the pace of this year.
Broadcom grabbed the top spot on our list for the first time last year, displacing Conexant Systems Inc., which has sold off several businesses in the past few years and moved its headquarters from Newport Beach to New Jersey earlier this year.
Our list, which ranks chipmakers based or operating here, puts Conexant at No. 3 with an 8% drop to 600 local workers.
Broadcom’s gains were offset by cuts at Conexant and other chipmakers on the list.
In all, the 20 companies on the list employ 4,829 local workers, just five more than a year earlier.
In terms of global employment, the companies posted a 3% decline to 101,522 workers, thanks to big cuts at No. 13 Intel, which has operations in Irvine.
Without Intel, the companywide tally was up 12% to 16,522 workers.
Perhaps the biggest note on this year’s list was the decline of Irvine-based Microsemi Corp., which fell from No. 4 last year to No. 6 this time around.
Along with No. 2 Newport Beach-based Jazz Semiconductor Inc., Microsemi is one of two companies on the list that actually makes chips at plants here. The others design chips and contract out for their production.
Microsemi shuttered its Santa Ana plant and combined it with one in Garden Grove. That resulted in a 27% decline in OC workers to 459 people. Microsemi’s total employment fell 12% to 1,489 people.
Jazz Semiconductor, the former chip plant of Conexant Systems, posted a 1% increase in local employment to 774 workers.
The company filed plans for a public stock offering earlier this year, though slowing business at key customers,including Conexant and No. 4 Newport Beach-based Mindspeed Technologies Inc.,could cloud its prospects in the near term.
Mindspeed Technologies Inc., another Conexant offshoot, rose to the No. 4 spot after upping employment here 43% to 475 people. Companywide, Mindspeed cut employment by 1% to 645 people as sales rose 45% to $116 million for the 12 months through June.
Another Conexant offshoot, Woburn, Mass.-based Skyworks Solutions Inc., came in at No. 5, unchanged from last year with flat employment of 474 local workers.
But in terms of revenue, Skyworks ranks alongside Broadcom as a star on the list. The company, which makes radio frequency chips for wireless phones, saw sales grow 16% to $716 million for the 12 months through June.
No. 7 Irvine-based Toshiba America Electronic Components Inc., part of Japan’s Toshiba Corp., held its spot from last year, despite an 8% decline in employment to 139 people here.
No. 8 Irvine Sensors Corp., based in Costa Mesa, bumped local employment by 11% to 97 workers, despite a 28% decrease in sales through June to $12 million.
The company recently received some big government research contracts for specialized electronic components.
Costa Mesa-based Semicoa Semiconduc-tors moved up a spot to No. 9 with a 17% rise to 96 local employees. Semicoa makes photodiodes, modules and transistors.
Irvine-based TDK Semiconductor Corp. cut back by 5% to 90 local workers, causing it to fall from No. 8 last year to No. 10 this time around.
TDK Semiconductor, which long has planned to spin off from parent TDK Corp. of Japan, saw sales drop 8% through June to $45 million. TDK Semiconductor designs chips for modems, set-top boxes and digital TV sets. The company’s public offering is on hold.
A smaller company that posted a gain: No. 16 Irvine-based U-Nav Microelectronics Corp., which grew employment 63% to 39 people in Irvine. The company didn’t disclose revenue.
U-Nav designs chips used in wireless phones and other devices and are used to track location via satellites.
A new name on the list is No. 17 ValenceTech Ltd., a unit of Santa Ana-based SRS Labs Inc., which was No. 14 on last year’s list. We’re listing ValenceTech instead of SRS this year.
But don’t confuse ValenceTech with Valence Semiconductor, an Irvine startup that used to appear on our list but closed in 2002 after failing to raise additional funding.
