The future’s now for Orange County’s next generation of chipmakers and semiconductor companies.
With several major funding rounds completed or in the works, the area’s growing base of upstart and emerging companies providing the technology that will power the newest smartphones, computers, cars, appliances and other cutting-edge devices had a breakout 2020 that’s extended into the new year.
Those firms’ growth is helping offset the ongoing decline in the local workforce for Broadcom Inc. (Nasdaq: AVGO), long the sector’s largest employer in OC, since its sale in 2016, which led to its headquarters being moved to San Jose (see story, this page).
The local funding news, along with rollouts of new products, portends a “very bright” future for chip companies in OC, believes Nguyen Nguyen, founder and chief executive of Irvine-based high-speed active optical cable maker Cosemi.
“As the high-tech industry at-large progresses, there’s an ever-increasing demand for talent and innovation” in the integrated circuits made by area chipmakers, which are used in both high-speed offerings and ultra-low power products, among other applications, Nguyen said.
Cosemi develops the underlying physical layer semiconductors that go inside the company’s interconnect active optical cables. Nguyen also is among the advisers for semiconductor newcomer firm Mobix Labs in Irvine, whose backers count extensive ties to one-time area chipmaker Microsemi, among others.
“Southern California as a whole, and OC in particular, for years has been the bedrock for these knowledge-based human resources—from the defense industry to the space and telecom industries,” Nguyen said.
“There is a lot of semiconductor talent in OC, so I am sure more and more companies will be started here,” added Kurt Busch, CEO of Irvine’s Syntiant Corp.
Syntiant’s low-power chips respond to voice and speech, and can wake up a device like an Amazon Alexa or have a device perform a specific function.
Formed in 2017, Syntiant landed a $35 million Series C financing round last August; it has raised $65 million to date. Last month it added a second-generation artificial intelligence processor to its lineup for audio and sensor applications in battery-powered devices.
“Syntiant certainly has a head start for AI chip companies, and we will strive to keep it,” Busch told the Business Journal.
Another Irvine firm, Movandi Corp., raised $27 million last May. It was the first big funding deal for an OC company during the pandemic.
The company, founded by siblings and former Broadcom executives Maryam and Reza Rofougaran, makes a variety of integrated circuits, antennas, systems and algorithms designed to be used by operators of 5G wireless networks.
OC “is as good of any other place for chipmakers due to its location in Southern California with very well-known and established public semiconductor companies and rising startups,” Reza Rofougaran said.
The area is also “surrounded by very high caliber engineering schools such as UCLA, UC San Diego, UC Irvine, CalTech, USC and UC Santa Barbara and not too far to other universities in Northern California such as UC Berkeley and Stanford,” he said.
“There is so much talent, knowledge and experience, as well as fresh young talented and motivated students with new and fresh ideas,” he said.
Added Maryam Rofougaran: “The combination of well-established semiconductor companies, young hungry talent (from nearby schools), and need for innovation in the industry and beautiful location and environment, creates a great opportunity for new companies in Orange County to emerge and thrive.”
Area companies continue to draw investments.
At the end of 2020, Indie Semiconductor in Aliso Viejo, an autotech-focused chip and software company formed in 2007 and last year shipping its 100 millionth unit, announced plans to go public via the increasingly popular special purpose acquisition company, or SPAC, route.
The deal should value the firm around $1.4 billion, and provide $500 million in cash before expenses to Indie, whose offerings include Advanced Driver Assistance Systems that help with parking and collision avoidance, along with backup and forward cameras to avoid driving errors.
The company’s chips will ultimately be used with self-driving cars, it said.
Indie’s executive team has ties to several chipmakers with significant local operations such as Skyworks Solutions Inc., Broadcom and Conexant.
Expect the area to see more new companies emerge going forward, industry execs say.
“There are some startups that will be coming out stealth mode soon, and they are backed by some of the top semiconductor leaders in the industry,” said Busch, who noted that he was excited to see one such firm, Mobix Labs, “focusing on next generation 5G wireless network technology.”
Cosemi’s Nguyen said based on the information he has, Mobix Labs “has some excellent proprietary microwave IP and products that will dominate the 5G (and beyond) industry. This will be a great addition to the OC chip company landscape.”
That company’s products would make it a competitor to Movandi, but that firm’s exec team say the sector, and OC, has room for more players.
“I hope to see many more chip companies in Orange County,” Maryam Rofougaran said.
Skyworks HQ Shift Comes With Local Job Boost
Skyworks Solutions Inc. held onto its spot as the largest locally headquartered chipmaker this year, and registered a small increase in Orange County headcount to 455 people, according to figures compiled by the Business Journal.
OC’s third-largest publicly traded company (Nasdaq: SWKS), which is making a big push into 5G telecommunications, shifted its base to Irvine last year from suburban Boston.
“We’re in the first inning of the opportunity in 5G. It’s going to be a 5- to 10-year cycle,” Chief Executive Liam Griffin, who has run the company from Irvine for several years, told the Business Journal last summer.
He called Southern California and Orange County “very convenient” for the company and its executive team to access to customers in the U.S. and in Asia.
Skyworks Solutions last week reported first-quarter revenue of $1.5 billion, up 69% from a year earlier, while its closing share price on Jan. 28 had risen 4.5% since the start of the year to $159.79 apiece.
The largest chipmaker on the Business Journal list by headcount remains Broadcom Inc., with an estimated 1,300 area employees. Prior to its 2016 sale, its local worker count was reported to be more than 2,000.
This year’s Business Journal survey indicates the COVID-spurred downturn took its toll on OC chipmakers as it did across the economy. The total OC headcount for the 19 companies on the list, taking both estimated and reported numbers, dipped almost 5.6% to 3,845 last month from 4,072 a year ago.