TECHNOLOGY: Wireless Could Drive Awaited Tech Turnaround
SPECIAL REPORT
By ANDREW SIMONS
Orange County technology companies stand to see changing fortunes in 2002 with corporate executives and economists projecting economic recovery.
But don’t bank on a stunning reversal. Technology spending next year is expected to grow by 3.9%, according to Giga Information Group Inc. That would be an improvement from this year’s estimated 5.3% decline but still below an earlier forecast of 7% growth for 2002. Even so, OC companies could benefit from any new spending by businesses that put off new purchases this year.
One bright spot: the wireless sector. Indus-try analysts predict that spending on wireless phones, devices and networks will grow by 12% to 17% next year.
Wireless is emerging as the main driver of a fledgling turnaround at Newport Beach-based Conexant Systems Inc. The company’s wireless chip arm has become its biggest by sales. That’s prompted Conexant to lay plans to spin off the unit and pair it with Woburn, Mass.-based Alpha Industries Inc. The new company is set to have headquarters in OC and Massachusetts with $600 million in yearly sales.
Irvine chipmaker Broadcom Corp. could start to see the fruits of its investments in wireless technology next year. The company has been landing design wins in the past year and likely will continue to give Conexant a run for its money.
Stepped up defense work could bolster tech companies that serve military markets. Among them is Irvine chipmaker Microsemi Corp. Earlier this month, Microsemi landed a $7.5 million deal to supply aerospace chips to Rockwell Collins Inc.
“We’re looking at a 10-year uptick in military spending,” said Jim Peterson, Microsemi’s chief executive.
Wireless service providers,Verizon Wireless Inc., Sprint PCS Group and Cingular Wireless,all plan to bolster their systems here and elsewhere in 2002. Look for pushes into underserved areas of South County and the eastern hills. The expansion of wireless systems here and beyond also should help Santa Ana-based Powerwave Technol-ogies Inc., a maker of wireless amplifiers.
Costa Mesa-based FileNET Corp. and other business software makers are hoping new products coupled with a changed economy will drive growth. The company has released several new versions of its data and document management products in the past year and projects a return to profits toward the middle of 2002.
Even sales of personal computers, which have been in a several-year slide, could bounce back next year according to industry research. That would be welcome news for Lake Forest-based Western Digital Corp., a hard drive maker that has felt the wrath of declining PC sales. Another factor for Western Digital is Microsoft Corp.’s Xbox. The company has supplied about half of the drives shipping with the video game console.
Also keep an eye on OC’s crop of venture-backed hopefuls, including chipmakers Morpho Technologies Inc., Valence Semiconductor and 3DSP Corp., all of Irvine. Many upstarts face proving points next year as they close in on the first stages of their growth plans and start churning out products.
