Shares of Broadcom Corp. and other semiconductor companies are in a tailspin on Wall Street, but over the past year chip makers have been a key driver of Orange County’s economy.
In the past 12 months, the 15 largest chip makers here grew jobs by 16% to 6,125 local workers, according to this week’s Business Journal list. The list ranks by employment the largest chip makers headquartered in OC or based elsewhere with facilities here.
The jump in jobs easily outpaced the county’s overall employment growth rate of 2.8% in the 12 months through October. The chip makers also grew jobs at a faster clip in OC than elsewhere: company-wide employment at the 15 companies grew 12% to 70,896 people.
Whether they’ll grow as fast next year is an open question. The public companies are being punished by investors who foresee sluggish sales in the face of a slowdown in key segments such as networking and the rollout of new digital cable boxes. That trend could affect sales and employment at the private companies as well.
The list includes local chip makers such as Irvine-based Broadcom and Conexant Systems Inc. of Newport Beach, as well as big industry players such as Texas Instruments Inc. and Lucent Technologies Inc.
Conexant tops the list again this year with 3,000 employees in Newport Beach and Irvine. In the past year, the maker of networking, wireless and digital imaging chips added 391 people, a 15% increase.
Conexant officials had been planning an expansion that would add another 2,500 jobs in Newport Beach. But those plans are on hold due to a slow-growth initiative approved by city voters in November. A company spokeswoman said Conexant is looking at possibly expanding in neighboring cities instead.
At No. 2 is Conexant’s crosstown rival, Broadcom, with 793 employees in Irvine. Broadcom added nearly as many new jobs as Conexant,363, an 84% jump,and that moved the company up from No. 4 on last year’s list.
No. 3 Santa Ana-based Microsemi Corp. added 50 new jobs for an 8% increase to 700 OC workers. But in the face of Broadcom’s gain, that wasn’t enough to hang on to the No. 2 spot Microsemi held last year.
A maker of mixed-signal semiconductors, Microsemi may yet reclaim the second slot. In September, the company announced plans to expand its Garden Grove facility and hire an additional 45 people. And last week, Microsemi leased 17,290 square feet of office space in Irvine, also for expansion.
The biggest percentage increase in jobs was the eye-catching 567% posted by No. 9 Irvine-based Valence Semiconductor Inc. The start-up has gone from 15 to 100 OC employees, though it hasn’t sold a product yet. Valence is designing system-on-a-chip semiconductors for wireless and broadband communications. By percentage, Valence also led the list in company-wide employment growth with an 833% increase to 140 employees.
Part of Valence’s growth came in its pickup of 50 employees from Cygnion Corp., an Ericsson Inc. spin-off in Irvine that folded earlier this year. Valence is down the street from Broadcom, and, like its bigger neighbor, hires highly educated workers: 30 of its employees have doctorates.
Chief Executive Mehrdad Negahban, who has worked as a consultant for Western Digital Corp., Sony Corp. and others, started Valence two years ago. The company said it plans to ship its first products in the first quarter. It plans to offer chips for voice, data and video, but it sees its edge in chips for global positioning network systems, according to Antony Beswick, vice president of strategic marketing.
Other companies posting large percentage increases in employment include: No. 12 Lake Forest-based Adiva Technology Inc., up 285% to 50 employees; and No. 8 Costa Mesa-based Irvine Sensors Corp., up 52% to 130 employees.
Four companies decreased their local employee counts. The largest drop came at the Tustin office of Texas Instruments, which said its employee count fell 38% to 300. Texas Instruments fell three spots to No. 6, the biggest drop on the list.
Steve Sutton, a vice president in charge of the Tustin facility, said Texas Instruments’ OC operation underwent restructuring twice in the past year. The Tustin facility operated as Silicon Systems, a unit of Japan’s TDK Corp., until Texas Instruments bought it in 1996. Last year, it underwent a “belated downsizing,” he said. Then a product line was eliminated, resulting in a further drop in employees. Texas Instruments expects to maintain the office, Sutton said.
Other companies whose local employment declined included No. 10 Costa Mesa-based Semicoa Semiconductors, down 26% to 74 employees; and the Huntington Beach office of No. 13 Lucent Technologies, down 23% to 46 workers.
A big company-wide employment gainer was Aliso Viejo-based QLogic Corp., which grew 69% to 564 employees. QLogic was boosted by its acquisition this year of Eden Prairie, Minn.-based Ancor Communications Inc., which added more than 100 employees to the company. In OC, QLogic added 33 employees, a 10% gain, for a total of 353 workers.
Broadcom, which has bought or outlined plans to buy 12 companies this year, also showed a big gain in overall employment, increasing 77% to 1,942 workers.
Besides Valence and Adiva, another new company on this year’s list is IBS Electronics Inc. of Santa Ana, an electronics distributor that does some production of capacitors, resistors and circuit boards.
Three companies fell off the list: last year’s No. 12 VTC California of Irvine, which was bought by Lucent; the Irvine office of Philips Semiconductors, No. 14 last year; and Motorola Semiconductor Products Sector of Irvine, No. 15 last year. Philips, which employs 16 people locally, and Motorola, which counts 13 people in OC, didn’t qualify for this year’s list. n
