Some things take time,for Irvine’s Valence Semiconductor, it took three years.
But after four rounds of funding and $35 million in investments from Conexant Systems Inc., Western Digital Corp. and others, Valence Semiconductor finally has its first publicly released product,a chip designed to handle communications across global positioning systems.
Where some startups have customers laid out and designs to be mass-produced shortly after their founding, Valence has taken a more circuitous route. In the past three years, the company has drummed up business by designing specialty chips as a contracted designer, rather than mass producing its own chips.
“We were working on several types of chips during that time and we just elected not to launch those products publicly,” said Antony Beswick, Valence’s vice president of marketing. “But we have developed a substantial number of chips.”
But Valence plans to begin heavily marketing its newest chip to potential customers and itself to investment bankers. The company hopes to pique interest and position itself for an initial public offering when the market comes back.
While executives decline to comment on specific plans, they have indicated in the past that Valence is looking toward an IPO, saying it would give the company leverage to make acquisitions.
“The real market opportunities are in multi-product semiconductors,” Beswick said earlier this year. “An IPO would be driven by our desire to combine our products with those of another company.”
And with its new chip, Valence finally is getting those products out into the open. The new chip actually took Valence’s engineers 11 months to design and ship off to contract chip manufacturers for mass production.
The chip, which can be implanted anywhere from a car or bike to a wireless phone or handheld computer, helps global positioning systems locate and communicate with other devices.
And the chip is made of material that allows for a function on a single chip that once required many chips, reducing its power use,the Holy Grail for mobile electronic device makers.
“We’ve integrated a lot of functions into the silicon,” said Dr. Farbod Behbahani, engineering director for the new chip line.
Valence, citing research firm International Data Corp., says the market for such chips will grow from $554 million this year to almost $5 billion in four years. As global positioning systems,networks of devices that communicate with each other via satellite,are going up to handle functions like mobile driving directions in automobiles and wireless communications, competitors making similar chips, such as Conexant, will be at Valence’s heels.
Valence said it couldn’t care less,the company argues its engineers have figured out how to make this particular type of integrated chip before anyone else, paving the way for interest among the investment community.
Until then, Valence executives say, they’re investing big bucks in research and development,the result of which they plan to show off in the next six months.
“What this team has done is akin to mapping the human genome,” Beswick boasted.
