Canadian Software Maker Moves In; Chip Startups Expand
These days, there are few hot technology sectors anymore.
There’s a glut of chips out there, clouding the prospects of semiconductor makers. The once soaring fiber-optic sector has been grounded by a credit crunch at big telecommunications companies. And PCs, well, forget about it.
But as networking and computer products makers look for ways to boost their operations, one tech sector,contract electronics manufacturing,is rolling, including here in OC.
On Jan. 31, Toronto-based Celestica Inc. topped fourth-quarter profit estimates with strong growth in its server and communications businesses. Celestica even upped earnings and revenue targets for 2001 at a time when most technology companies are talking analysts down on their expectations for the year.
Celestica makes gear for Sun Microsystems Inc., Nortel Networks Corp., JDS Uniphase Corp., Motorola Inc. and others. The company counts 635 workers at its Foothill Ranch plant, where it’s added 450 new jobs in the past year and nearly doubled its space to 305,000 square feet.
“The market we’re in continues to show significant growth,” said Ben Swenson, general manager of Celestica’s Foothill Ranch plant.
In OC, Celestica’s customers include Sun Microsystems and Britain’s International Computers Ltd., a provider of grocery store automated checkout systems and restaurant point-of-sale systems.
On Jan. 25, Anaheim-based DDi Corp. announced record fourth-quarter results and a strong outlook for the year as well. DDi is a contract maker of circuit boards with quick turnaround times.
San Jose-based Sanmina Corp., with a fabrication facility in Irvine and a design center in Lake Forest, also reported strong results for the recently ended quarter and said its outlook for the rest of the year is bright.
The circuit board makers’ optimism comes even as the industry is showing signs of slowing. Total shipments of circuit boards in December increased 14.4% from November, though new orders booked decreased 13.2%,a book-to-bill ratio of 0.92, according to IPC, a Northbrook, Ill.-based industry group. A book-to-bill ratio below 1.0 signals contraction.
Late last month, St Louis-based circuit board maker Viasystems Group Inc. said results for the first quarter will be hampered by weaker demand from telecommunications gear makers who’ve built up too much inventory. Viasystems employs about 125 people at a fabrication facility in Lake Forest.
Still, compared to other tech sectors, contract manufacturers remain a bright spot. Industry watchers expect more work to come their way as the economy slows and big name companies look to bolster profits by shedding manufacturing.
Last month, Sweden’s LM Ericsson Telephone Co. said it plans to outsource its mobile phone production to Flextronics International Ltd., a Singapore-based contract manufacturer with a design and engineering center in Irvine. Flextronics also is set to make Microsoft Corp.’s forthcoming Xbox video game console.
Ottawa to OC
Canada’s webPLAN Inc. is moving its headquarters from Kanata near Ottawa to Newport Beach. The maker of Internet-based supply chain software already has moved its executive, sales and investor relations teams to OC, where it currently employs 20 people with plans to double that in coming months. WebPLAN counts 150 people in Ottawa, and it remains undecided if Chief Executive Michael Ker will relocate here, a spokesman said. But Newport Beach will function as the company’s headquarters, he said.
The move is designed to better serve U.S. customers, including those in Silicon Valley, according to the company. Customers include contract electronics manufacturers Jabil Circuit Inc. and SCI Systems Inc. as well as Lucent Technologies Inc.
WebPLAN, which also has a Chicago office, closed a $33 million round of funding led by HabourVest Partners LLC and including Intel Corp.’s Intel 64 Fund last year.
Chip Maker Expands
3DSP Corp., a startup Irvine chipmaker, has doubled its space with the lease of 21,202 square feet of additional room in the Irvine Spectrum. The designer of digital signal processors, whose main office is near John Wayne Airport, is looking to double its headcount to around 120 in coming months.
In January, 3DSP landed former Wyle Electronics Inc. chief executive Thomas Beaver as its new CEO. Last year, the company received $13 million in a second round of funding from Alcatel Ventures, an arm of Alcatel Alsthom SA.
Entridia Hiring
Another Irvine chip startup, Entridia Corp., also is going on a hiring spree. The maker of data packet processing chips for optical networks plans to hire 40 engineers plus some support staff this year, bring its OC headcount to 120, according to co-founder and marketing vice president Paramesh Gopi.
Epoch Lands Wet Seal
Epoch Internet, Costa Mesa-based Internet services and data center company, has landed a deal to provide Web-hosting services to Foothill Ranch-based Wet Seal Inc.’s corporate and online shopping sites. Epoch plans to host Wet Seal’s sites from its Epoch Data Center in Costa Mesa.
