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The company's chief executive officer, Paul Costigan, confirmed that the business would cut the 12 jobs in order to scale down in line with current market conditions.
Overall the company employed 75 before the cuts including 30 in Ireland and 30 (20 after the cuts) in its Spanish research and development facility launched in February of this year. The remainder of the firm's workers are located in Santa Clara, California and Taipei, Taiwan.
Costigan told ElectricNews.Net that the cuts were made earlier in the year and despite the decision to drop the staff, the business is continuing to recruit key technical workers including analogue design engineers.
Massana is one of only a few Irish chip designers, and is the only Irish firm to embark on a plan to manufacture and brand its own chips. Costigan said that the company is continuing to work toward this goal and expects to launch its own semiconductor line in early 2002. Its Taiwanese partner TSMC, one of the largest chip fabrication companies in the world, will manufacture the Massana's chips.
Despite the cuts and the difficulty in the sector that firms such as Massana are experiencing, Costigan remains optimistic for the chip business as a whole and expects a recovery in the second half of 2002, a predication echoed by most industry analysts and larger chip makers. "In fact the market we are targeting is one of only a few with real growth opportunities next year," Costigan said.
The market Costigan is referring to is the gigabit Ethernet technology market and the emerging broadband communications sector. Massana's products are used in these high-speed data networks and the company is specifically targeting gigabit Ethernet-over-copper market with its products for switches, routers, network interface cards (NICs) and network attached storage (NAS) applications.
Massana, which is a privately held company, closed a second round of venture funding for USD16.5 million in October 2000. That funding was led by the private equity arm of Dresdner Kleinwort Benson. Other investors included JAFCO Co. Ltd. of Japan, ACT Venture Capital of Ireland, BancBoston Capital, and Vision Capital. In December 1999 Massana secured a first round of USD7 million in venture financing. Costigan said the company is currently fully funded and has no immediate plans for more fund raising schemes.
Costigan's analysis of the industry and the company's decision to cut jobs is mirrored by virtually all of the larger semiconductor makers and designers, including Intel, Parthus, SX3, NEC, Toshiba, AMD, Texas Instruments and STMicorelectronics, all of which have cut jobs in the year. A report issued on Wednesday by research company Dataquest said that semiconductor vendors have struggled through the worst industry decline in the history of the market, as 2001 worldwide semiconductor revenue declined 33 percent to USD152 billion, according to preliminary statistics.
The US-based research firm went on to say that all of the top 10 semiconductor vendors experienced revenue declines ranging from 19 percent to 49 percent. "The entrepreneurial model of building and investing in new technology went bust in 2001. A downturn of this magnitude will be difficult for many companies to recover from in 2002," said Mary Olsson, chief analyst for Gartner Dataquest's worldwide semiconductor group. "As is evident in the sizeable declines by most of the top vendors, the industry has undergone tremendous destabilisation. We expect further consolidation of the industry during 2002," she added.
Massana is on-line at http://www.massana.com
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