Intersil May Move North as Part of Elantec Deal
By ANDREW SIMONS
Irvine’s Intersil Corp. may have moved to Orange County just two years ago, but it could turn on its heels and leave.
When Intersil agreed to buy Milpitas-based Elantec Semiconductor Inc. for about $1.4 billion last week, Greg Williams, Intersil’s chief executive, agreed to relinquish his post in the combined company to Rich Beyer, Elantec’s chief executive.
Williams is set to stay on as chairman.
As far as a move of Intersil’s headquarters to Milpitas, “those are the things that they’ll work out over the next couple of months, when they develop some kind of a transition plan,” Intersil spokesman Brent Dietz said. “It’s way to early to tell. We’re not sure if (Beyer) is planning to relocate to Irvine.”
Williams wasn’t available to comment for this story.
Intersil makes analog communications chips that help cars, computers and networking devices handle a variety of functions, including managing power effectively.
Intersil counts just 30 of its 2,500 employees in OC,mostly based in a design center,but ranks third among local chipmakers by yearly sales, after Conexant Systems Inc. and Broadcom Corp. As of last week, Intersil counted a market value of more than $3.2 billion, though its shares dipped on news of the Elantec buy.
“The Los Angeles to San Diego corridor has become increasingly focused on technologies for wireless and high speed communications,” Williams said when the company moved to Irvine from Palm Bay, Fla., in 2000. “As the hub of the region, Irvine Spectrum has become a recognized center for wireless and broadband communications, attracting a mass of companies involved in these emerging technologies. That’s truly a major advantage.”
But Elantec is in the same neighborhood as Intel Corp., Advanced Micro Devices Inc. and other Silicon Valley chipmakers. The Irvine office is set to stay open no matter where the company decides to have its headquarters, Dietz said.
Intersil has been looking for ways to spend its money. In selling its discrete semiconductor division to Fairchild Semiconductor International Inc. last year for $338 million, Intersil doubled its cash on hand. In its most recently reported quarter, Intersil said it had about $601 million in cash.
Intersil executives have looked to expand through acquisitions. Company officials said the Elantec pickup, a stock deal, would end up saving the company money that it otherwise would spend on research and development. The savings should add to earnings next year, though officials declined to specify an amount.
The acquisition of Elantec, which makes mostly analog chips, marks a curious shift in focus for Williams, who had looked to grow Intersil’s wireless division. In 2000, Williams actually decided to get rid of a slowing discrete components business to further focus on wireless.
About 72% of Intersil’s revenue comes from sales of its analog chips.
Chips for wireless networking devices and what are known as wireless local-area networks make up the rest.
“The wireless business is really just embryonic right now. But we’re really in a strong position to grow,” Williams said in an earlier interview.
