Intersil Staying in Irvine, Chief Executive in Milpitas
By ANDREW SIMONS
Irvine’s Intersil Corp. won’t be moving to Silicon Valley as a part of its buy of Milpitas-based Elantec Semiconductor Inc., but its new chief executive won’t be moving to Orange County either.
“He’ll stay up there,” said Pete Hargittay, Intersil’s director of investor relations. “There are no plans right now to move the company to Milpitas.”
When Intersil agreed to buy Elantec for about $1.4 billion in March, Greg Williams, Intersil’s former chief executive, agreed to relinquish his post in the combined company to Rich Beyer, Elantec’s chief executive. Williams, who lives in Orange County, stayed on as chairman.
Intersil has just 30 of its 2,300 workers in OC while Elantec is firmly rooted in Milpitas,the same neighborhood as chipmakers Intel Corp. and Advanced Micro Devices Inc. Incidentally, it’s also near Cupertino, where Intersil was founded in 1967.
With a chief executive settled in the Bay area, Intersil considered whether to move its headquarters,at least in namesake only,northward. Under any scenario, the Irvine office would stay open.
But with the company only two years off its move to Irvine from Florida and its close proximity to other communications chip companies, Intersil decided to stay put. Overall, Intersil’s headcount is down 8% from six months ago.
“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 its corporate headquarters to Irvine from Palm Bay, Fla., in 2000.
“As the hub of the region, the 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.”
Intersil is a big fish in small pond, though. With annual sales of $481 million, it ranks third among local chipmakers by yearly sales, after Irvine-based Broadcom Corp. and Newport Beach-based Conexant Systems Inc.
Intersil had a market value of $2.5 billion last week, down from $3.2 billion when Intersil announced the Elantec buy three months ago.
Intersil makes analog communications chips that help cars, computers and networking devices handle a variety of functions, including managing power effectively. Elantec makes chips for optical storage components and flat-panel displays.
“Intersil can now use its analog and wireless industry expertise to emerge as a dominant mixed-signal vendor to the wireless end markets,” said Robertson Stephens analyst Arun Veerapppan in a report.
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. Intersil also plans to invest $140 million to research this year, the company said.
