Mindspeed Technologies Inc. is leaving the nest.
The Newport Beach-based chipmaker is set to move out of an area that’s been a haven for a loose family of chipmakers here.
The maker of chips for routers, switches, networking gateways and other gear recently confirmed it’s moving its headquarters to Aliso Viejo sometime next year.
Leaving Newport Beach means Mindspeed is breaking away from neighboring Conexant Systems Inc., which spun off Mindspeed in 2003, and Tower Semiconductor Ltd.’s TowerJazz, which spun off from Conexant in 2002.
According to a government filing, Mindspeed has about 144,000 square feet at its Newport Beach office building, which it leases from Conexant.
The sublease, which was extended for two years in 2008, is set to expire in June.
A spokeswoman for the company confirmed Mindspeed is set to move to Aliso Viejo next year, but she didn’t offer any details beyond that.
The Business Journal speculates that Mindspeed could end up signing a lease at 20 Enterprise in Aliso Viejo’s Summit Office Campus.
With roughly 120,000 square feet of open space, it’s one of the few commercial buildings in the area that has enough open space for a company the size of Mindspeed.
Mindspeed has roughly 260 workers here, including those in labs and testing.
It also maintains a handful of other design and sales offices around the country.
It’s possible Mindspeed may get a better deal in Aliso Viejo than it did subleasing from Conexant.
Mindspeed made its home next to Conexant in twin 10-story towers near MacArthur Boulevard and Jamboree Road.
In early 2006, real estate investor and coin dealer John Saunders and other investors bought the two buildings, known as Koll Center Newport, from KBS Realty Advisors LLC for $136 million.
In late 2004, Conexant exercised an option to buy the buildings under a lease with Deutsche Bank AG, the prior owner.
Conexant in turn sold the buildings in 2005 to Newport Beach-based KBS Realty Advisors, pocketing about $49 million.
Conexant declined to comment on Mindspeed’s move.
Mindspeed’s relocation could be part of an aggressive cost-cutting program that’s been run by Chief Executive Raouf Halim for the past year or so.
“We have been managing expenses very tightly and taking out costs wherever we could,” Halim said. “We have held operational expenses flat while, at the same time, making it a richer mix with focused research and development dollars.”
In the September quarter, Mindspeed’s operating expenses were $21.1 million, down from $21.2 million in the June quarter and $24.1 million a year earlier.
The company expects to wind down its restructuring and plans to keep operating expenses at about $21 million per quarter next year.
Mindspeed posted sales of $35 million in the recently ended quarter.
The company’s chips are used in wide-area networks used to link different corporate offices and networks that span parts of cities. The company also makes chips used in devices that allow telephone calls over Internet lines.
Rockwell International Corp., which no longer exists but left behind Milwaukee-based Rockwell Automation Inc. and Cedar Rapids, Iowa-based Rockwell Collins Inc., has spawned many chip spinoffs that have since stuck together in Newport Beach.
Conexant, which makes chips that go into digital photo frames, printers, computer speakers and other devices, spun off from Rockwell in 1999. Conexant had a recent market value of about $115 million.
In 2002, Conexant split off its Newport Beach chip factory as Jazz Semiconductor Inc., which made chips for aerospace and modems.
Last year, Jazz was bought by Israel’s Tower Semiconductor Ltd. for $40 million in cash and $129 million in debt.
Conexant spun off Mindspeed in 2003. Mindspeed had a recent market value of about $110 million.
The move made Mindspeed a niche player. But it also made it stronger, according to Halim.
“The rationale of the spinout has proven to be spot-on,” he said. “By standing alone we have been able to reach a much higher degree of focus on our specific networking customers than would have been the case under the Conexant umbrella. Business has more than doubled since then.”
Mindspeed’s headquarters move is the second announced among big tech companies here in as many months.
Western Digital Corp., a maker of disk drives for computers and consumer electronics, is moving back to Irvine after nearly a decade in Lake Forest.
Back then, Western Digital was looking to save money wherever it could to alleviate the effects of its slumping business, including by cutting back on rent.
The company’s now taking space at the massive Park Place campus that runs along the San Diego (I-405) Freeway, just off Jamboree Road.
The 10-year lease is for 365,000 square feet, or roughly the size of a 15-floor high-rise.
It will be the second big move for Western Digital, which gave up a flashy Irvine Company high-rise in the Spectrum to a more low-key office campus in Lake Forest in 2000.
