53.7 F
San Diego
Thursday, Mar 28, 2024
-Advertisement-

Qualcomm’s Big Moves Show Sector the Need to Constantly Evolve

Companies in San Diego’s high-tech electronics and software space made some significant moves in 2016.

The region’s biggest tech player, Qualcomm Inc., made a bold attempt to get bigger, taking the first steps to acquire Netherlands-based NXP Semiconductors N.V. The envisioned combined company would be a $30 billion enterprise serving a wider market than Qualcomm alone, whose 2016 revenue was $23.6 billion.

Mergers and acquisitions seemed to be the story in the semiconductor space at the midpoint of the 2010s, and for a long time Qualcomm seemed uninterested. The perception irritated some investors. It turned out Qualcomm was keeping its plans to itself.

Advantage in Autos

NXP promises to give Qualcomm new markets, including a better position in the auto industry. The companies will need regulators’ approvals if the $47 billion tie-up is to close in 2017. Qualcomm has offered to buy NXP stock for $110 per share and plans to assume NXP’s debt.

Qualcomm also went through a wave of layoffs in 2016 and refocused its business plan, following some but not all recommendations from activist investor Jana Partners.

The year also saw Qualcomm propel the development of next-generation wireless telecommunications technology called 5G. South Korea plans to roll out trial fifth-generation networks in 2017.

San Diego’s information and communications technology space includes several thousand companies, according to the San Diego Regional Economic Development Corp. A few are large. Many are small. 2016 saw the maturing of a vibrant startup community with a big presence in the downtown high-rises that used to exclusively house lawyers and financial services specialists.

Numbers for 2016 are not yet available, but the software, communications, computer and electronics sectors combined created 1,248 jobs in 2015, according to a September study from CONNECT, an organization that has watched and supported San Diego’s innovation economy for more than 30 years.

Breaking Away From Bay Area

Andrew Gazdeki

In the spring of 2016, software writer Bizness Apps left the Bay Area for new quarters in San Diego. CEO Andrew Gazdecki documented the successes and the hiccups of the move in some widely circulated essays. “Don’t get caught up in the notion that tech lives and dies in the Bay Area, or that sharing an area code with the giants will spur your momentum,” Gazdecki wrote on the TechCrunch website.

San Diego saw a big sale in March when Chicago private equity firm GTCR closed a $500 million cash purchase for San Diego-based Lytx Inc. Lytx offers the DriveCam telematics service, a telecommunications-based monitoring service for companies that operate truck fleets.

Experian opened an expanded data science facility in April in Carmel Valley. The main office of its Experian DataLabs operation has many Ph.D.s, and is almost within a stone’s throw of the University of California.

Silicon Valley tech giant Google move into San Diego in 2016. The company, part of Alphabet Inc. (Nasdaq: GOOG), leased two floors of a building in Sorrento Mesa, though the company has been quiet about what it’s doing there.

And now the calendar turns. Barring anything big and unforeseen, look for the flowering of downtown’s technology scene and the seemingly spontaneous appearance of tech startups. The past might just be a hint of what’s to come in 2017.

TECHNOLOGY

No. of local jobs: 67,600

Average salary: $103,300

Key economic fact: San Diego County software developers collectively make $4 billion a year in salaries

Top companies in sector (by local employment): Qualcomm Inc. (12,186), ViaSat Inc. (1,800), Cymer LLC (1,182), Kyocera (545)

Source: San Diego Regional Economic Development Corp., SDBJ Book of Lists 2017

-Advertisement-

Featured Articles

-Advertisement-
-Advertisement-

Related Articles

-Advertisement-
-Advertisement-
-Advertisement-