Vitesse Semiconductor Ships High-Speed Chips to Unisys

Vitesse Semiconductor Corp., a Camarillo firm that has struggled to persuade computer makers to use its advanced but costly gallium arsenide chips, has started shipping its high-speed chips to Unisys Corp., one of the nation's leading computer companies.

Lou Tomasetta, Vitesse's president and chief executive, says it's too soon to estimate how the arrangement will affect his firm's bottom line, since only a few hundred of the units have been shipped so far. "But this will certainly strengthen our credibility in the industry," he said. "It's a very exciting mainstream application of our technology."

According to Tomasetta, the newest version of Vitesse's microprocessor, which it jointly developed with Unisys, is about 2 1/2 times faster than traditional computer chips. He concedes, however, that the unit's relatively high cost has been a stumbling block in gaining acceptance in a market that's been hit hard by price-cutting.

"We're especially happy that Unisys had to make very few changes to fit our chip into its system," he said. "That should impress a lot of potential customers."

Vitesse, which has more than 200 employees at its plant in Camarillo, has increased its revenues sharply in recent months, thanks largely to lower prices for its newest generation of gallium arsenide chips. The company has also instituted tight cost controls.

In its latest quarter that ended March 31, revenues surged 44%, to $8.72 million from $6.07 million a year earlier. The company also trimmed its loss in the latest quarter to $1.7 million, compared with a loss of $5.1 million a year earlier.

The California Technology Stock Letter, published in Half Moon Bay, noted recently that Vitesse's new chip "is fast and cheap. . . . This could save a couple of hundred bucks in a system." The newsletter added that the chances are improving for Vitesse to "move its unique (chip) technology into mainstream products."

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