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Chipmakers Combine for 7.4% Jump in Local Employment

The county’s largest chipmakers saw an employment spike the last 12 months, as growing demand for cell phones, tablets and other mobile devices pushed local hiring and big acquisitions added workers companywide.

The 19 biggest chipmakers here added 330 people in the past year, a 7.4% jump for a total of 4,811 workers, according to this week’s Business Journal list. That marked the second straight year of job gains amid strong demand for mobile devices. Companies on last year’s list grew their work force at a 7% increase, rebounding from a 3% drop in 2009.

The recent gains were made as global chip sales are expected to drop this year amid a weakening macroeconomy, marked by tempered consumer spending and debt concerns in Europe. Chip sales are projected to drop .1% to $299 billion this year, according to Stamford, Conn.-based market researcher Gartner Inc. That’s well below the company’s previous estimate of a 5.1% sales jump, as excess inventory, manufacturing overcapacity and slowed demand prompted a revised forecast.

Broadcom Leads

The chipmakers list again was led by No. 1 Irvine-based communications chipmaker Broadcom Corp., which makes chips for computers, cell phones and consumer electronics. Broadcom added 281 jobs here for a list-topping total of 2,300 workers, representing an almost 14% local gain that outpaced all other local employers.

“Broadcom’s ability to grow over the last 12 months has been driven by strong customer demand for our communications technology, which speaks to the continued underlying strength of our integrated solutions for the home, hand and infrastructure markets,” Chief Executive Scott McGregor said.

Broadcom added 2,053 workers companywide for a total of 9,690 workers, representing a nearly 27% rise from a year earlier.

A string of acquisitions this year propped up its global work force. That included the $42 million buy of SC Square Ltd., a developer of security software headquartered in Israel, and the $313 million takeover of Israel-based Provigent Inc., which makes chips for wireless network operators that allow for the transfer of voice, data and video signals from cellular base stations to their main network.

Broadcom is set to complete its biggest deal to date next year when it closes its $3.7 billion buy of Santa Clara-based chipmaker NetLogic Microsystems Inc., which has 700 employees and sizeable operations around the world.

Tower Adds

No. 2 Tower Semiconductor Ltd., which is based in Israel with operations in Newport Beach, added 47 jobs here, a year after its reorganization.

Tower, which operates under the brand name TowerJazz, has 697 workers here, up 7.2% from a year ago. Most of the new hires are at the company’s chip factory in Newport Beach, with some in research and development. TowerJazz operates specialty foundries that process wafers with chips designed by customers.

Tower added 1,300 employees companywide for a total work force of 3,300 people after acquiring a Japanese chip plant in Nishiwaki in June from Boise, Idaho-based Micron Technology Inc. for $140 million. The 65% jump was the highest companywide percentage increase on the list.

TowerJazz currently makes some 840,000 wafers annually. With the additional capacity in the Japan plant and continuing demand, TowerJazz expects to cross the million-wafer mark next year.

Tower Semiconductor bought Newport Beach-based Jazz Semi-conductor Inc. in 2008 for $170 million. The company has integrated Jazz into its operations.

The move doubled revenue. Today, the company posts yearly sales of more than $500 million and is considered one of the top specialty foundries in the world. TowerJazz hopes to hit $1 billion in revenue by 2014.

Aliso Viejo-based Microsemi Corp. moved up one notch to No. 3 after adding 21 local employees to 265 workers, up 8.6% from a year ago. The company added more than 900 people companywide to 3,123 workers, up nearly 41% from last year.

Microsemi’s $632 million hostile takeover last month of Canadian rival Zarlink Semi-conductor Inc. was its largest acquisition to date, adding more than 300 employees. The move helped Microsemi make inroads in the communications and medical markets—key segments in its growth plan.

Earlier this year, Microsemi bought millimeterwave technology and related assets of Florida-based Brijot Imaging Systems Inc., which debuted a hand-held scanner in May that could help do away with controversial pat-downs at airport security checkpoints. That came on the heels of acquiring Sunnyvale-based fabless chipmaker ASIC Advantage Inc., building its position in the profitable aerospace and satellite industries.

No. 4 Conexant Systems Inc. moved down one spot as hiring was flat from a year ago at 250 workers. In April, the company went private in a $282 million buyout by San Francisco-based Golden Gate Private Equity Inc.

No. 8 Sunnyvale-based Maxim Integrated Products Inc. acquired Teridian Semicon-ductor Corp. of Irvine—No. 9 on the 2010 list—for $315 million in cash, as Maxim added six local employees for a more than 6% yearly rise. Santa Clara-based Atheros Communica-tions Inc.—which was No. 17 on last year’s list and holds the same rank this year—was acquired by San Diego-based Qualcomm Corp. for $3.2 billion in May. The chipmaker now operates under the name Qualcomm Atheros.


Download the 2011 OC’s LARGEST CHIPMAKERS list (pdf)

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