The largest chipmakers in Orange County added jobs in the past year amid a wave of industry consolidation that included four companies with local operations.
The 18 biggest chipmakers here added 185 local positions in the past 12 months, ending the period with 4,830 workers, according to this week’s Business Journal list. The 4% increase reversed two straight years of job cuts.
Six companies grew employment, and two were flat. Ten were Business Journal estimates or companies that didn’t report enough information for a year-over-year comparison. For the first time in years, no company reported local job losses.
Chipmakers on the list added 7,277 employees companywide to 224,542, a 3.3% gain.
The increases come as chip sales are projected to hit $343 billion this year, up 2.3% over 2014, according to Washington, D.C.-based market researcher World Semiconductor Trade Statistics. The optoelectronics segment, at 14%, sensors, at 4.3%, and analog circuits, at 4%, are the big drivers, though all chip segments are projected to see a bump.
The prevailing story in the global chip sector, though, is consolidation. And that often means job cuts.
Transactions in the industry have topped a record $105 billion this year, up from $46.3 billion last year, according to New York-based Dealogic.
The two previous records were in 2006—$75.2 billion—and 2000—$70.3 billion.
The trend has played out locally in two potential blockbuster deals and a minor one.
• Perennial No. 1, Irvine-based Broadcom Corp., is set to be acquired for $37 billion by Avago Technologies Ltd. in Singapore. The combined company, which would take the name Broadcom Ltd., would become the third-largest chipmaker in the world, with annual revenue of about $15 billion, if the transaction closes as expected early next year.
The deal’s effect on Broadcom’s local employment of 2,400—flat over the past year—remains to be seen. Big takeovers typically translate into big layoffs, a hallmark of Avago’s prior acquisition history, though Broadcom appears committed to build a five-building campus next to Orange County Great Park that calls for 1.1 million square feet in its first phase.
• No. 4, Aliso Viejo-based Microsemi Corp., which increased its employment base 14.8%, or 38 positions, for a total of 295, is in a bidding war for PMC-Sierra Inc. The Sunnyvale company rejected Microsemi’s latest offer of $2.4 billion in cash and stock, or $11.82 per share, siding with an all-cash bid of $11.60 per share by Apple supplier Skyworks Solutions Inc.
PMC’s board said the all-cash proposal by the Woburn, Mass.-based chipmaker provides “more value certainty to shareholders” than Microsemi’s highly leveraged bid, which includes $2.7 billion in new transaction debt.
Don’t be surprised to see the bidding escalate, given Microsemi’s acquisitive nature under Chief Executive Jim Peterson, who has rolled up 24 companies since he took the helm in 2000, including a $632 million hostile takeover of Canadian rival Zarlink Semiconductor Inc. in 2011.
• Skyworks is the third-largest chipmaker in OC, with 307 local workers, up 17.6% over a year ago.
WiSpry
• No. 18, WiSpry Inc., which had an estimated 29 workers at its Irvine headquarters, was acquired in May by Hong Kong-based AAC Technologies Holdings Inc. under undisclosed terms.
The company, which specializes in radio-frequency chips used in mobile devices, raised nearly $71 million in venture capital funding, according to San Francisco-based CrunchBase, and had Tech Coast Ventures in Irvine as a backer.
• No. 2, Israel-based Tower Semiconductor Ltd., added 60 jobs to end the period with 785 workers, up 8.3%. The Business Journal in late September reported that the company, which goes by the name TowerJazz, plans to invest $15 million to $20 million to upgrade its Newport Beach manufacturing plant to meet growing demand for new generations of chips for smartphones and other wireless devices.
The added business, fueled by the booming Internet of Things market, has led the company to boost local employment, according to Marco Racanelli, manager of the Newport Beach site.
• SolarFlare Communications Inc. in Irvine moved up one spot to No. 12 after adding 18 employees, finishing with 70. The 34.6% jump was the highest of any company on the list. Its speedy data networking circuit boards are sold directly to financial services firms.
• Irvine-based ClariPhy Communications Inc. moved down three notches to No. 13, though it added five jobs, ending with 65 employees.
“We continue to see expanded opportunities for our products that enable faster bandwidth for data centers and the Internet,” said Chief Executive Nariman Yousefi. “We are forecasting solid growth in 2016.”
