Conexant Moving Unit to Research Park
Conexant Systems Inc. plans to move its digital-imaging chip business to Irvine’s University Research Park as part of a move to possibly sell off the unit.
“We are going to give the space to the digital imaging group we are divesting,” Conexant spokeswoman Lisa Briggs said. “It’s a brand-new space. It’s something we’ve been working on for a while.”
In March, Conexant said it was looking at alternatives for the digital imaging unit as it conducted a “comprehensive reassessment” of its businesses. The unit makes image sensors and processors for digital cameras.
At the time, Conexant said it had been talking with several different investors and buyers, but company officials haven’t detailed any plans for a sale of the digital imaging business yet. The company said a decision on the unit could be made three to six months from the time officials announced their intentions to sell the business.
Conexant’s digital imaging business also designs chips for printers and fax machines and falls under the company’s personal networking segment, which lost $213 million in the most recently reported quarter. The segment is generally considered to be the slowest-growing portion of Conexant.
The company’s decision to move its digital imaging business to University Research Park marks a change in plans, according to real estate brokers. Conexant signed a lease for the space earlier this year, and was reportedly planning to move its networking chip unit, Mindspeed Technologies, into the space. That was before market conditions forced Conexant to cancel the public spinoff of Mindspeed, one broker said.
In May, real estate brokerage CB Richard Ellis Services Inc. relocated about 300 employees out of a Newport Beach tower at 5000 Birch St., next to a building occupied by Conexant. The company decided to take the space in the West Tower and move its Mindspeed division there, instead of University Research Park.
The decision to move the digital imaging business comes amid wire and Taiwanese newspaper reports that Conexant has reached an agreement to sell its Newport Beach chip fabrication plant to Taiwan’s United Microelectronics Corp. Conexant officials declined to comment on their plans for that Newport Beach facility, which employs 650 people.
The Newport Beach plant makes Conexant’s more generic microprocessors,including the ones designed by the digital imaging business. n
Cisco’s Irvine Expansion Scrapped
Cisco Systems Inc. will not be taking any more space in Orange County, reversing plans to expand its digital subscriber line business in Irvine’s University Research Park, a company spokesman said.
“We had been looking last year. But as the economy slowed and we have gone through layoffs, our needs have changed. At this time we are not looking for additional space down there,” said spokesman Steve Langdon.
San Jose-based Cisco had been thinking about adding more space to the 70,000 square feet the company already has at the research park next to the University of California, Irvine.
The facility houses about 340 workers focused on high-speed Internet products.
In December, the company and real estate sources said Cisco was looking to lease as much as 150,000 square feet more in the research park.
The company reconsidered its plans as it underwent massive business cutbacks and dramatic staff cuts to weather a sharp economic slowdown, according to a company spokesman.
Cisco plans to cut 8,500 people from its roster to save $1 billion on a yearly basis.
Because of this reduction in staff, Cisco executives said it expected to consolidate its work force into already existing facilities.
“Real estate-wise, everything is being evaluated,” Cisco spokesman Derrick Meyer said at the time. “Everything comes into play as far as where to cut costs.”
With Silicon Valley real estate still commanding huge lease rates and sale prices, Cisco had looked to expand its operations in OC, where the company could take advantage of cheaper rents and a skilled workforce.
But Cisco has joined a growing list of companies either severely scaling back or pulling operations entirely out of OC.
Two months ago, Texas Instruments Inc. pulled out of OC, moving 250 jobs back to its headquarters in Dallas. Toshiba America Information Systems Inc. pulled its laptop computer assembly operation out of Irvine, eliminating 500 local jobs.
With space in Irvine and Silicon Valley, Cisco already is The Irvine Co.’s largest tenant.
Cisco, which has leased the University Research Park space since 1999, leases more than 1 million square feet of space in 19 buildings at the Irvine Co.’s McCarthy Center in Milpitas.
Cisco has subleased a portion of the Milpitas space to save money,a move the company could apply to its space in OC.
“They were one of the first tenants at the University Research Park,” Irvine Co. spokeswoman Jennifer Smith said. “They are also a tenant of ours up north. They have announced that they plan to sublease some of that space, but that doesn’t impact our agreement with them at all. They’ll remain the tenant. What they choose to do with the space is up to them.” n
