Headquarters: 16215 Alton Parkway, Irvine
Employees: 4,287; 1,376 in OC
Business: communications chipmaker
Market value, as of April 4: $23.3 billion
12-month revenue: $2.7 billion, up 11%
12-month net income: $412 million, up 88%
Year in review: Broadcom Corp. is another major Orange County public company that saw a new face at the top during the past year.
Scott McGregor, former head of Netherlands-based Royal Philips Electronics NV’s chip unit, took over in January from Alan “Lanny” Ross, who spearheaded Broadcom’s restructuring of the past few years.
Broadcom’s a complex chipmaker, with more than 20 businesses that cover communications, digital entertainment and networking.
The company has enjoyed big gains from the global surge in consumer electronics. It designs chips for digital TVs, cell phones, cable and satellite set-top boxes, among other gear.
Broadcom inked a big deal with Cupertino-based Apple Computer Inc. last year. It’s providing chips for Apple’s monster-selling iPod devices with video capability.
Broadcom also continued its aggressive acquisition strategy.
Notable buys included Fremont-based mobile phone chipmaker Athena Semiconductors Inc., which it bought for $22 million, and Mountain View-based network storage chipmaker Siliquent Technologies Inc., which it picked up for $76 million.
Sales grew 11% to $2.7 billion while net income soared 88% to $412 million.
Broadcom consistently beat analyst estimates during the year, sending its shares soaring. Broadcom’s market value has more than doubled in the past year to $23.3 billion at recent check.
What’s ahead: Expect Broadcom to continue its consumer electronics push, while not forgetting about its core networking chip products.
Broadcom will look to grow its business with Apple and Motorola Inc., which used the company’s chips in its popular Razr phone. Earlier this year Broadcom raised its sales guidance for the first quarter.
The company’s Bluetooth and digital TV units also are worth watching.
Bluetooth, which connects wireless phones to earpieces, computers and other devices via a wireless link, makes up 15% of Broadcom’s sales. While not a huge portion of total sales, its Bluetooth revenue has been rising 40% to 50% during the past few quarters.
Meanwhile, Broadcom will be juggling several patent disputes in 2006.
Broadcom and San Diego-based Qualcomm Inc. are locked in a bitter patent infringement battle. Broadcom has filed a suit claiming Qualcomm’s devices infringe on at least 10 of its patents related to communications and multimedia technologies.
Qualcomm has filed three suits of its own against Broadcom alleging infringement too.
Broadcom also will be watching to see how its big construction project is going. The chipmaker signed a blockbuster deal for 685,000 square feet of space in eight buildings under construction at University Research Park.
Wall Street’s take: Broadcom shares are up about 40% this year as the chipmaker continues to beat and raise expectations.
Analysts expect the chipmaker to post 2006 sales of $3.7 billion, a 37% rise from last year, according to Thomson Financial.
Net income is expected to be $770 million, more than 80% higher than last year.
WHO’S IN CHARGE
SCOTT MCGREGOR
Chief executive
Joined company: 2005
Education: bachelor’s, master’s in computer science and engineering, Stanford University
Career: McGregor was head of Royal Philips Electronics NV’s chip unit from 2001 through 2004. He joined Philips in 1998 as head of its emerging business unit, which covered smart card, radio frequency ID technology and digital media.
Before Philips, McGregor held various positions with network device maker Santa Cruz Operation Inc. from 1990 on. Prior to that he was with Digital Equipment Corp., Microsoft Corp. and Xerox Corp.’s Palo Alto Research Center.
Notable: Writes internal blog that charts his recent trips or thoughts about the company.
