Intersil Corp., a Palm Bay, Fla., maker of chips and other electronics used in wireless computer networks, is moving its headquarters to the Irvine Spectrum in a move designed to take advantage of the area’s high-tech cachet.
The $5 billion market cap Intersil will rank among the five largest public companies in OC. The company’s 17,000-square-foot Spectrum office will house a small engineering staff and the company’s executive team, including Chief Executive Greg Williams, Chief Finan-cial Officer Dan Heneghan and Larry Sim, vice president for worldwide sales. Chief Counsel Steve Moran, former general counsel for Toshiba America Electronic Components Inc., already lived in the area.
“Irvine is probably one of the most attractive locations to live in California,” said Williams, 48, who has two grown daughters who live in the area. “We looked at the Bay area, and it was significantly more expensive there, not to mention recruiting issues.”
Intersil opened its Spectrum facility in March and expects to complete its relocation by the fall. The move, which will bring about 50 new jobs, marks a notable addition to OC’s tech industry. For the quarter ended March 31, Intersil’s sales grew 26% to $170.9 million with a $5.8 million profit before acquisition and other charges. By 2003, Williams said he sees annual sales reaching $1 billion.
After raising $500 million in a February initial public offering, Intersil’s shares have been on an extended comeback from the spring downturn in tech stocks. They were trading at about 55 last week, giving Intersil a market capitalization of $5 billion.
The move to Irvine was “not an accident,” Williams said. “We’re growing significantly, and the whole Los Angeles to San Diego corridor is a booming location for broadband semiconductor companies.”
Company officials hinted future expansion is likely to take place in and around Orange County. Because of the area’s pool of broadband semiconductor talent, recruitment could be easier here, they said.
“Who knows where we’ll go from here?” Williams said. “This is probably the first of several locations in Southern California.”
Intersil makes an assortment of building blocks for wireless data networks, including everything from transistors that manage power in portable computers to chips that create wireless networks.
More than half of the company’s sales come from its mixed-signal processors, which are used in a variety of Internet and telephone products. Discrete power devices, the components that manage battery and electrical power in portable electronics, make up about a third of overall sales.
Though the segment makes up only 6% of its total revenue now, Williams and other company officials are betting much of their future growth on wireless local area network products. Wireless LANs allow users of laptop and handheld computers to hook into private computer networks without having to physically connect the devices. The technology is expected to be popular in airports, school campuses and businesses.
According to Scottsdale, Ariz., research firm Cahners In-Stat Group, the wireless LAN market is set to grow at 25% per year for at least the next four years to more than $2.2 billion. In another report, the research firm named Intersil “the dominant force” in wireless LAN chips.
The company hopes to convince others of the same thing with a $1.7 million advertising campaign in magazines such as Wired, Red Herring, Fast Company, Forbes and Inc.
Intersil customers include industry heavyweights such as Compaq Computer Corp., Siemens AG, Dell Computer Corp., Cisco Systems Inc., Nokia Corp., Samsung Electronics Co., Nortel Networks Corp., 3Com Corp. and Sony Corp.
But Intersil also faces some big competitors including Lucent Technologies Inc., Analog Devices Inc., Semtech Corp. and Maxim Integrated Products Inc.
Most of Intersil’s workforce will remain at its facilities in Findlay, Ohio, Mountaintop, Penn., North Branch, N.J., Research Triangle Park, N.C., San Antonio, Texas, the Netherlands and Malaysia.
Intersil had operated as the semiconductor business of Melbourne, Fla.-based communications equipment maker Harris Corp., which sold the unit to a group of investors and managers last summer. Williams wouldn’t say how much of the company he owned, but, as a whole, management has a 7% stake in Intersil.
Like many recent technology offshoots, Intersil’s market valuation towers over that of former parent Harris, whose market cap hovers in the $2.2 billion range.
Despite being one of the newest public companies in the tech sector, the Intersil operation,and even the “new” name,dates back to the earliest days of digital electronics. The company started out as a Silicon Valley company 30 years ago called Intersil, which lost its own identity after being purchased by General Electric Co. in 1986. Harris bought the unit two years later.
As executives were trying to find a name for the newly independent company last year, they stumbled on the old Intersil moniker and realized it happened to capture the company’s current focus: Internet and silicon. n
