Roseville's computer-chip manufacturer, devastated by a financial scandal earlier this year, announced a major expansion Wednesday.
Telefunken Semiconductors said it will double its manufacturing capacity by the end of 2014. The project, once completed, would fulfill a pledge Telefunken made to Roseville officials when it acquired the plant in 2011.
The expansion represents a stunning turnaround for Telefunken. Last spring it sued its two top former executives, accusing them of defrauding the company out of $23 million.
The lawsuits said the alleged fraud brought Telefunken "to the brink of insolvency." Telefunken laid off 85 workers in September, bringing employment to around 500, as a direct result of the case.
But the company has "stopped the bleeding," said Duke Walton, vice president of sales.
Walton said he didn't know how much the expansion will cost, or how many jobs will be created. But he said Telefunken plans to rehire some of the workers it let go in September.
Telefunken's main business is making chips for the auto industry, which has rebounded strongly from the recession. Walton said the company has also benefited from some chip plant shutdowns in Silicon Valley, which has reduced competition.
"It made a good opportunity for us to take some of their premium customers," he said.
The Roseville plant, one of the mainstays of the region's tech industry, was in danger of closing until Telefunken bought the facility in 2011 from Renesas Electronics. Telefunken's management immediately vowed to double plant capacity.
Wednesday's announcement "is the expansion that was promised back then," Walton said.
The original expansion got shelved when the scandal hit. Telefunken fired its chief executive, Subbarao Pinamaneni, and its president, Raj Johal, and then sued them for fraud. The company said they siphoned $23 million from the Roseville plant to prop up a semiconductor plant they controlled in Germany.
The "wholesale theft" forced the company to default on a $10 million line of credit, according to Telefunken.
The suits were settled in June. As part of the settlement, Pinamaneni and Johal surrendered the German plant to Telefunken, the company said.