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Private IC firms quietly lay off staff

Posted: 08 Dec 2008 ?? ?Print Version ?Bookmark and Share

Keywords:private chip company? China DTV? lay off?

The past weeks were deluged with announcements of job cuts by public companies as the semiconductor ecosystem grapples with the emerging realities of a significant downturn.

But their privately held peers, unbound by regulations requiring them to report layoffs, have not gone unscathed. Private companies have shed staff, tooalbeit more quietly.

One example is Legend Silicon, the fabless chip vendor that specializes in chips supporting China's digital TV terrestrial broadcasting system standard, GB20600-2006.

Legend Silicon, which is headquartered in Fremont, California and has several locations in China, has quietly purged about half of its employees from a peak of more than 300.

"The company got a little ahead of itself in its expansion plans," said Ralph Schmitt, the former Legend Silicon CEO who left the company in October to take the top job at PLX Technology Inc., the market-leading supplier of PCIe interconnect chips.

Schmitt, who is still on Legend Silicon's board of directors and remains bullish on its long-term prospects, said the company was forced to downsize by market conditions. The company had been considering an initial public offering, he said, but has tabled those plans because of the economy, the stock market and the current dearth of IPOs.

In September, Legend Silicon rolled out a trio of DTV demodulation chips based on GB20600-2006, where the company has a dominant market position. At the time, the company's VP of marketing acknowledged that competitors are on the way and said Legend Silicon's plan is to "to keep the bar forward so that it's harder for others to catch up."

In a series of emails with EE Times, Hong Dong, a Legend Silicon co-founder, who CEO position when Schmitt departed, acknowledged the company has laid off employees but said there would be no impact on the announced products.

"These [products] have been released and designed into customers' products already, including some major international customers," Dong said. "For Legend Silicon, there is no major direction change."

Legend Silicon is the No. 1 player in the GB20600-2006 market, Dong said, and intends to retain that position by introducing more products with better performance and lower cost. "The latest change in the company means that we will be more focused," Dong said.

Legend Silicon, founded in 1999, has to date taken on about $65 million in venture funding, most recently a $40 million round in 2007 that was led by Intel Corp.'s venture capital arm. Other investors include Motorola Inc., Mobile Internet Corp., Softbank, Shanghai Industrial Technology and others.

- Dylan McGrath
EE Times

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