Irvine’s Microsemi Corp., a maker of chips for military, aerospace and industrial uses, said Wednesday it landed a $22 million government contract for products used in global positioning systems.
Microsemi is set to make customized circuit boards loaded with chips that prevent tampering with GPS for the military.
They are set to be used in missile guidance systems, secure radio communications and precision guided weapons designed with GPS features.
The anti-tamper features help prevent reverse engineering and other covert methods that could be used to gain access to sensitive data, the company said.
The design win stems from Microsemi’s April buy of Phoenix chipmaker White Electronic Designs Corp. for $100 million.
“We are pleased with this production contract won by our newly acquired division,” Chief Executive Jim Peterson said. “The addition of this technology allows us to increase our presence in the military market with systems of higher complexity.”
White Electronic assembles and tests chips used primarily by the military. It specializes in an anti-tamper technology that’s built into GPS-guided weapons deployed in Afghanistan.
Analysts like the idea of Microsemi becoming an expert in anti-tamper technology.
“We view the production order as positive for Microsemi and consistent with its strategy of being the consolidator in the high-reliability electronics market,” said Tore Svanberg, an analyst at Stifel, Nicolaus & Co. in Baltimore. “We are getting incrementally more positive on this opportunity as we believe this initial order was recognized quicker than original estimates and may lead to a bigger market opportunity that includes not only military platforms but also secure radio communications, laptop computers, and any other device requiring anti-tampering security feature.”
Svanberg has a “buy” rating on Microsemi’s shares and a $24 price target.
Microsemi, the county’s third-biggest chipmaker, had a recent market value of $1.3 billion. It shares closed at about $16 on Wednesday.
