Vitesse Raises $7.3 Million to Help Finance Expansion Plans
Vitesse Semiconductor Corp., one of the nation’s emerging makers of high-performance computer chips made from the advanced semiconductor material, gallium arsenide, said it raised $7.3 million in additional money to finance its expanding operations.
The money was the third round of financing for the Camarillo company, founded in 1984, and brings to $25.4 million the amount it has raised to date, said Thomas Dugan, Vitesse’s director of marketing.
Of the $7.3 million, $4.2 million came from new investors, including Aeneas Venture Corp., which is affiliated with Harvard Management Co., Security Pacific Capital Corp., Hughes Investment Management Co. and New Venture Partners.
The remaining $3.1 million came from existing investors. Among the most prominent investors is Sequoia Capital in Menlo Park, a leading venture capital firm in high technology. Pierre Lamond, a partner in Sequoia Capital and one of the founders of National Semiconductor, is Vitesse’s chairman.
$15 Million in Sales
Dugan said Vitesse expects to break even this year and is shipping its chips at a pace that would bring about $15 million in annual sales. Vitesse’s customers include General Electric, which uses the advanced chip in defense work. Vitesse also is working with researchers for such major computer makers, such as Digital Equipment and Unisys.
Because gallium arsenide chips are so powerful, their use in computers is expected to grow dramatically as computer makers push to increase the performance of their machines.
Cray Research in Minneapolis, the nation’s major maker of powerful supercomputers, is using them in developing its Cray-3 machine. The supercomputer uses gallium arsenide supplied by another local company, Gigabit in Newbury Park.
Gene Miles, a consultant for Dataquest, a San Jose high-technology research firm, said the market for the kind of chips Vitesse specializes in making was about $86 million last year, compared to about $11 million in 1984 when the company was founded. That market is expected to grow to about $600 million in 1992, Miles said.
