• Where: Irvine
• 12-month sales: $3.5 million
• Two-year growth: 338%
• OC workers: six
• Business: Maker of optical chips for networks, computers, consumer electronics
With just six workers, Irvine’s Cosemi Technologies Inc. could be the county’s smallest chipmaker.
But it’s on a big-growth trajectory, fueled by growing demand for networks that use fiber optics to transmit data.
Cosemi designs chips that convert strains of light into electricity to speed the flow of data on networks.
The chips allow data to be transferred at speeds of 10 gigabits to 100 gigabits per second along cables that are the width of a human hair, instead of on more expensive, bulky copper cables.
“We have the technology that does this at very high speeds and lower power for the next generation of fiber-optic networks,” Chief Executive Nguyen Nguyen said.
Cosemi’s chips are found in gear used in telecommunications networks, data centers and in some computers and consumer electronics.
Cosemi ranked No. 7 on the Business Journal’s 2010 list of fast-growing private companies with sales growth of 338% for the two years through June 30, according to a Business Journal estimate.
For the 12 months through June, the company had estimated sales of $3.5 million, up from $800,000 for the same period in 2008.
The optical networking industry took a hit after the technology bubble popped in 2001 but is having stable growth now.
“Ten years after the Internet bubble bust and took the global telecommunications business down with it, the market for optical telecom network equipment finally has commenced a sustained recovery,” said Lee Ratliff, senior analyst at El Segundo-based market researcher iSuppli Corp.
Worldwide optical telecom network equipment sales are set to total about $14 billion this year, up 8% from last year, according to iSuppli. Equipment sales are seen growing to $22 billion by 2014.
Cosemi designs chips here and has them made at factories in the U.S. The chips are sold to other companies that assemble them onto circuit boards for use in data storage gear.
Its customers sell to the likes of Aliso Viejo’s QLogic Corp. and Costa Mesa’s Emulex Corp., which make electronics for data storage networks.
A big growth push for Cosemi is cloud computing, which allows corporations to essentially outsource the hosting and running of large software programs to servers managed by others.
“In order to have a cloud computing offering, network operators need fiber-optic networks,” Nguyen said. “The only technology that can handle all the input and output are fiber optics.”
Another big reason for companies looking to install fiber-optic lines—they’re more environmentally friendly than copper.
“A lot of companies are trading up to fiber optics as part of a green data center,” Nguyen said. “Everyone wants to have optical cables with lower power consumption.”
Cosemi fared well during the downturn because it sells its chips in emerging markets, including Taiwan, China, Thailand and India, Nguyen said.
“When the U.S. telecom market was stalling, other (economies) outside the U.S. were growing,” he said. “Now we have U.S. companies upgrading their networks.”
The company expects to continue to grow with increased demand for bandwidth and the building of fourth generation wireless networks by all the major carriers.
Some see the technology as being on the verge of taking off for more everyday uses, possibly replacing the metal-based cables now used to link digital cameras, camcorders, music players and other devices to computers.
“We think over the next few years, you’ll see optical networks everywhere,” Nguyen said.
Nguyen founded the company in 2006 with money from friends and family. A technology veteran, he worked for more than a decade in wireless phones, where he said he saw a need for optical chips.
Cosemi caught a break its first year in business when Irvine-based chipmaker Microsemi Corp. transferred its optical chip product line and development and qualification process to Cosemi.
Within the past few months, Nguyen said he’s been approached by other companies with buyout offers.
Nguyen said he isn’t entertaining offers because he’s focused on building Cosemi.
“We want to carry out our unique business model further,” he said.
