Semiconductors, chip design big business in Longmont as range of companies grow

LONGMONT — Ten years ago, Longmont was known for data storage among the high-tech centers of Colorado. Today, however, a thriving market in semiconductor and integrated chip design is holding its own as a specific niche, helping Longmont grow its reputation within the metro area’s ?Convergence Corridor.?

?We have most of the major semiconductor players, in terms of integrated circuit design, represented in Longmont,? said John Cody, president of the Longmont Area Economic Council. ?I would say it’s pretty much grown into its own entity in a variety of spectrums.?

The companies that represent the industry in Longmont range from small offices for Marvell Semiconductor to mid-range companies like Texas Instruments and STMicro, which range from 50 to 80 employees. Larger firms include National Semiconductor, which employs more than 150 people at its 55,000 square feet of offices, and the Xilinx campus, where more than 300 employees are devoted primarily to research and development. Other prominent names include Vitesse Semiconductor and Broad Logic in the telecommunications area, as well as Phillips, Agere and Convergence Design.

While many companies designing semiconductors relocated to Longmont to service large data storage facilities like Storage Technology Corp. and Maxtor Corp., the cluster of companies has grown in the last five to 10 years to provide design work for companies across the country.

?It has diversified. There are definitely a lot of other things that are perhaps rooted but no longer directly attached to the storage market,? said Larry Cleland, site manager for Texas Instruments, which serves products to the storage companies as well as TI’s Internet phone services. ?People like Xilinx have moved in here with a totally different market because, like a lot of companies that needed design talent, they couldn’t hire enough people in the (San Francisco) Bay area, and so they started looking at these outlying technology centers.?

The majority of the work being done in Longmont primarily involves integrated circuit design, as well as some applications support and software application development for specific systems.

?These are really integrated circuit design shops. They’re designing chips to do specific things for specific applications,? said Cody of the cluster of high-tech firms that has grown up in the city. ?What’s interesting is that we have almost no fabrication here. There is quite a bit of it done in Colorado Springs, but a lot of other companies here are doing their fabrication in other places such as the Pacific Rim.?

While Intel employs more than 1,000 people at the Colorado Springs location where it fabricates chips for personal computers, the companies in Longmont are of more moderate size. The decline in sales of personal computers, however, hasn’t impacted developers in Longmont as profoundly as a company like Intel because of their diverse client base.

?We’re fairly well positioned because we have a wide range of products in our portfolio,? said Ron Wawrzynek, site manager for National Semiconductor, whose Longmont location designs chips for a number of consumer electronics including portable Internet-connected devices and other wireless products. ?It’s not a part of the business that we’re involved in at this site, but the slowness in the PC market has affected our results overall.?

National Semiconductor, however, has returned to profitability in the last quarter after a drop over the past year.

?I think the industry is in a slump, but what makes it a little different is that semiconductors have always been a cyclical industry even within the advanced technology arena,? said Cody. ?The other side of that equation is that semiconductors have seen a few bright spots in the last year. I think they will probably lead some of the advanced technology industries in coming out of the slump.?

The number of companies working in this field in Longmont is relatively small, but the companies represent a significant group in an industry that is generally run from Silicon Valley or the East Coast. With average salaries for chip designers ranging from $50,000 to well over $100,000 for experienced personnel, the well-educated workforce in and around Boulder is an advantage, as is the Longmont location.

?I think we find that Longmont and Colorado in general is attractive for the lifestyle that it affords,? said Wawrzynek. ?It certainly is a bonus for us when we’re recruiting people throughout the United States. From a Longmont perspective, it’s also easier and cheaper to get the amount of office space that we need here compared to Boulder. The cost of living is very reasonable as compared to other high-tech centers in the U.S. as well.?

Cleland finds similar benefits at Texas Instruments but with some reservations.

?This is a great market to hire from. There’s a lot of experience in most of the areas we’re looking for,? said Cleland. ?There’s also a lot less turnover, which is good and bad from a company’s perspective. The people that either come here or are hired here are relatively inflexible in terms of moving to another location.?

That urge to stay has been true of the semiconductor companies as well, said Cody, who has been investigating the technology cluster for the past few years.

?From an employee standpoint, it’s still relatively small,? said Cody. ?I think what’s important from our perspective is that the major players in the industry are already here. In some cases, it’s happened through acquisition and in some cases it’s because they want to be close to customers but nevertheless what we’re finding is that as they grow, they are continuing to stay here.?

?The state of the semiconductor industry is pretty good considering high technology itself is not doing so well,? said Carl Paulson, director of the Colorado Technology Alliance. ?It’s a fascinating industry, and it’s not just building personal computer chips. A lot of the big chip makers have a presence here, and there’s really a lot to explore.?

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