Roseville computer chip plant expanding

Published: Tuesday, Feb. 25, 2014 - 10:07 am

A Roseville computer-chip manufacturer said Tuesday it plans to expand its workforce by at least 10 percent, thanks to a new licensing deal with IBM Corp. that’s expected to bring in millions of dollars in new revenue.

TSI Semiconductors said it has already added more than 50 workers in the past few months in anticipation of the IBM deal, and another 50 or so will likely be added in the next two years. Chief Executive Sagar Pushpala said company revenue could double in the next two years.

“More customers want to come to us; that’s a good sign,” he said.

TSI’s growth marks a significant change in fortunes for the plant, which was founded by NEC Electronics in the 1980s but has gone through ownership changes and considerable turmoil in recent years.

In 2012, when it was known as Telefunken Semiconductors, it sued two former top executives, accusing them of diverting $23 million from the Roseville plant to prop up a chip plant they controlled in Germany. Their activities brought the company “to the brink of insolvency,” according to the lawsuit, and Telefunken laid off 85 workers. The lawsuits were eventually settled, and the company renamed itself TSI.

“It’s all behind us,” Pushpala said of the scandal. Formerly an operating partner at one of Silicon Valley's top venture capital firms, Khosla Ventures, he joined TSI last April.

The new technology being licensed from IBM helps computer chips operate more efficiently and drain battery life more slowly. It would have taken TSI up to four years to develop the technology itself, Pushpala said. By signing a license agreement with IBM, “time to revenue is much faster,” he said.

He said TSI’s annual revenue is “south of $100 million” but is growing.

“We’re not profitable yet,” he said. “We expect to break even this year.”

Call The Bee’s Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.

Read more articles by Dale Kasler

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