O.C. Tech Stars Burn Fast, but Leave Light
Oh, to be young, hip and working at Broadcom. That could have been the company motto.
If there was a corporate symbol for how Orange County entrepreneurs saw themselves in the late 1990s, it was the complex of white buildings on Alton Parkway in Irvine. Yes, there were others like them -- companies with names that to nontechies sounded like secret government projects -- but Broadcom was among the most darling of the darlings.
The buzz had been building for a year when the company, founded in 1991, went public in the spring of 1998. To put it mildly, the stock offering was a smashing success.
Originally projected to sell at $12 a share, the stock was priced at $24 on opening day and was selling at twice that by the final bell. Six months later, the stock had gone up 300%.
Broadcom was hot -- and so, by extension, were the fertile stretches of Orange County turf that sprouted high-tech companies. In November 1998, The Times quoted a UCLA professor as saying the county was nothing less than a dynamo.
Someone else said that everything needed to be a player in the world of 21st century technology was here in Orange County. Unnamed experts predicted that payrolls in the county would increase by about 142,000 jobs to 1.4 million by 2003, double the projected national growth rate.
Last weekend, Broadcom announced it was firing 500 employees -- about 16% of its work force -- in a concession to slumping sales. Stock that sold for around $180 a share at the end of 1998 now sells for $20. The company signal was but the latest from the high-tech world that things ain’t what they used to be.
So much for Orange County, huh? Surely, the flagging tech industry would drag the county down with it. Goodbye to all those rosy predictions.
Surprise. The county is doing fine, thank you, according to Esmael Adibi, director of an economic research center at Chapman University in Orange.
Adibi jokes that he wasn’t one of the “experts” quoted in 1998. “I was optimistic in ’98 about the prospects of technology for the county, but I wouldn’t have been as optimistic as some people were at the time.”
But in the next breath he starts going over figures hot off the press, and guess what? By the end of this year, the total payroll in the county should reach 1.42 million, he says, right on the nose of the ’98 forecast.
The falloff in the tech industry (7,000 jobs in Orange County) has been more than offset by increases in the service sector. But even that connects to the high-tech industry.
In short, the hectic days of high-tech boom produced spurts in the manufacturing sector. Once those new products were established, jobs to design the content and do the hands-on work show up in the service sector.
Adibi has more numbers, but the point he left me with is that Broadcom is but the latest poster child from a century of innovations.
His lesson is not to get too giddy about the Broadcoms of the world or to let them define us.
He is, however, bullish on Orange County’s future -- and throws in a couple of thoughts for free about the country:
Another Broadcom, most likely in high tech or biotechnology, will come along and knock our socks off again.
And that euphoria will, at some inevitable but unknown point, be followed by a sobering up.
Any parting words for our dearly, departed poster child?
No sympathy needed, Adibi says.
“Even Broadcom is not dead,” he says. “They’re going to come back.”
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Dana Parsons’ column appears Wednesdays, Fridays and Sundays. Readers may reach Parsons by calling (714) 966-7821 or by writing to him at The Times’ Orange County edition, 1375 Sunflower Ave., Costa Mesa, CA 92626, or by e-mail to dana.parsons@latimes.com.
