Local technology industry looking forward to growth.

Byline: Sherri Buri McDonald The Register-Guard

Call them the survivors. These local technology companies have weathered the rough industry conditions that have reduced their ranks in the past few years.

In 2003 - the year with the most recent data available - Oregon high-tech firms employed 55,830 workers, down from a peak of 70,076 in 2001, according to the Oregon Employment Department.

But now, after a calmer 2004, the local survivors are looking forward to growth, and in at least one case, expansion of its Eugene headquarters.

Molecular Probes/Invitrogen

Molecular Probes, a division of California-based Invitrogen Corp., is the world's leading supplier of fluorescent dyes used to tag and track cells and proteins in biological and other scientific research. Molecular Probes supplies products to academic and government research groups and pharmaceutical and biotech companies worldwide. With its unique market position, Molecular Probes has charted healthy growth even during the technology downturn.

Scientists Richard and Rosaria Haugland founded Molecular Probes in 1975, and Invitrogen bought the business in August 2003.

Molecular Probes is the fastest-growing piece of Invitrogen's business, said Augie Sick, general manager.

"Invitrogen is very pleased with this purchase so far," he said.

Molecular Probes' technology cuts across all segments of Invitrogen's business and it's at the forefront of trends in biological research, Sick said.

"It's at the right spot in the right time in the industry," he said.

Following the mapping of the human genome, scientists are pushing to identify the function of genes. To do that, researchers study the proteins in cells and see how they're affected by disease and pathogens. Scientists use Molecular Probes' products to mark those proteins and compare the differences between diseased proteins and normal proteins, Sick said.

When Invitrogen bought Molecular Probes, it planned to keep the Eugene facility as a center of excellence and to improve upon it, Sick said. Invitrogen is now in the midst of developing an expansion plan for the Eugene campus.

The company broke ground in late October on a 60,000-square-foot, two-story building north of the two newest buildings on campus. It is to be completed in December 2005, and employees will move in January 2006, Sick said. The building will house 65 chemists and 65 to 70 biologists.

"The idea is to mix disciplines and work together in developing new technology and products," Sick said.

Because of space limitations, Molecular Probes probably will add only 20 to 25 employees in 2005, Sick said.

In 2006, he said, the company will look to hire another 50 research and development employees - most of whom will be Ph.D.-level scientists.

Last year, Invitrogen bought the 9.5 acres of the original campus, plus another 9.5-acre parcel south of Pitchford Road. It also bought nearly an acre north of the main administration building and is working to acquire two additional acres.

The timing is yet to be nailed down, Sick said, but the next priority will be to construct a manufacturing operations building. Molecular Probes is also looking to renovate space for a gym, and possibly provide an on-site day care center.

"That would allow us to mix work life and family life," Sick said, adding that because of the nature of their work, scientists typically don't keep 9-to-5 hours.

Invitrogen, which is based in Carlsbad, Calif., reported a profit of $60.13 million in 2003 on sales of $777.74 million. Final financial results for 2004 aren't yet available. The company forecasts 2005 revenues of $1.08 billion to $1.1 billion, or 6 percent to 8 percent growth.

Symantec Corp.

California-based Symantec Corp., which has a large customer service center in Springfield, is planning to grow in a big way this year by merging with Veritas Software Corp., a California-based developer of computer storage software. The two announced their plans in mid-December and hope to close the $13.5 billion deal later this spring. In the all-stock purchase, the new entity will keep the Symantec name.

It's too early to say how the merger might affect the Springfield facility. But Phil Weiler, local Symantec spokesman, said the company is more likely to boost than to cut employment here.

A factor working in favor of the Springfield center is that Symantec owns the $37.3 million, 190,000-square-foot building and the 14 acres it sits on. If Symantec needs more space, it has an option to buy an additional 14 acres immediately west of the center, where a companion building of similar size could be constructed. The existing center has 846 employees and room for 1,000 total, Weiler said.

In the past few years, Symantec has tried to use the Springfield center to the fullest and take advantage of Lane County's lower labor and other operating costs by moving to Springfield from its Cupertino headquarters several of its departments, including information technology, accounts payable and finance.

"If the trend holds that we've seen over the last few years, we'll probably see additional people in Springfield," Weiler said. Company officials, however, are still working out the details, he said.

The Springfield facility is one of four Symantec customer service centers. The others are in Dublin, Ireland; Sydney, Australia; and Tokyo.

Veritas has 40 customer support sites scattered throughout the world, with U.S. support based in Florida.

Symantec was last in the news in 2004 when it dropped its contract with Stream, formerly Spectrum Contact Services, to provide customer service to Symantec retail customers. Stream laid off 376 employees and closed its center in downtown Eugene in October. Symantec moved the work to the Sutherland Group in India, Weiler said.

The workers at Symantec's Springfield facility who provide customer and technical service to large business and government customers aren't threatened by the trend of transferring customer service work to countries, such as India, that have much lower labor costs, Weiler said.

"Traditionally, we've looked at keeping that work in-house," Weiler said. "All along, our thought has been that the kind of interaction that an agent has is different on the consumer side than the relationship an agent has with an enterprise customer." Symantec calls its large clients in business, government and education its "enterprise" customers.

"The relationship with the enterprise customer is much closer, and depending on the service contract, the customer could be working with same person on the account," he said.

In a matter of months, if shareholders and regulators approve the proposal, the merger with Veritas could increase Symantec's annual revenues from $1.87 billion to an estimated $5 billion; and its companywide head count from about 6,000 in 35 countries to about 13,000 in 40 countries.

Hynix

Hynix, which has a big computer-chip factory in west Eugene, is expecting a slight downturn in business the second half of the year, company spokesman Jerry Olson said. Analysts expect the overall economy to stall a bit and for demand for computers and computer memory to soften, he said.

Despite that outlook, Hynix plans to keep its employment this year at the current level of about 1,000 workers, Olson said.

After a 60 percent spike last year in the worldwide market for dynamic access memory chips, or DRAM, analysts are forecasting a drop of 11 percent this year.

The market should drop to $23.7 billion in 2005 from $26.7 billion in 2004, forecasts Bill McClean, president of IC Insights, a market research firm based in Scottsdale, Ariz.

Unit sales in 2005 are expected to stay much the same as 2004, but unit prices may slip a bit this year because of overcapacity in the market, McClean said.

Hynix's Eugene factory makes 512-megabit and 256-megabit DRAM, used primarily in computers. The plant will continue to upgrade equipment this year to boost the number of chips produced per wafer, Olson said. Hynix expects to produce 50,000 wafers a month in Eugene by the end of the year, up from 30,000 a month when the factory opened in 1998.

The highly cyclical DRAM industry may be down slightly this year, but analysts expect it to be back on the growth path next year.

IC Insights projects the market to hit $26.5 billion in 2006, up 12 percent from 2005 projections.

Olson said South Korea-based Hynix's biggest challenge this year will be starting construction on a new computer-chip factory in Wuxi City, China, near Shanghai. Hynix plans to build two factories, at a cost of $2 billion. The first will produce chips on wafers 8 inches in diameter and the second will make them from 12-inch wafers - which the leading semiconductor companies have been using because they can produce more chips at lower cost.

The factory in China primarily will supply customers in China and other parts of Asia. Hynix also has six factories in Korea: four in Ichon and two in Cheongju.

The Eugene plant is Hynix's only factory outside of Asia and is a key supplier to European and U.S. customers because of tariff restrictions on Korean produced memory chips, Olson said.

Having a U.S.-based plant is an advantage for Hynix, McClean said.

"With all the trade issues swirling around the DRAM market and Hynix and all the memory makers over the past year or two," he said, "I think it's good to have production (in the U.S.)."

PSC Inc.

Under new ownership and a new CEO, PSC Inc., a Eugene-based maker of bar-code scanners, is forecasting healthy growth for 2005.

The privately held company is expecting a 23 percent rise in revenues and 32 percent rise in profits in 2004, and comparable increases in 2005, said Rhone Lee, vice president of human resources.

The growth is across all of PSC's markets: North America, Latin America, Asia Pacific, Europe, the Middle East and Africa, Lee said.

A Connecticut-based investment group bought the financially ailing company in November 2002. As part of that agreement, PSC filed for bankruptcy protection. It emerged from bankruptcy in June 2003 and went from being a publicly traded company to a privately held one.

As a result, the company no longer publicly discloses its financial information.

In an interview in August, CEO Jack Farrell forecasted that 2004 revenues would top $200 million.

Under Farrell's leadership, PSC is narrowing its focus to two markets: laser scanners for retail applications - the counter scanners at the grocery store, for example - and mobile/wireless scanners for commercial and industrial applications.

PSC expects to add about 25 employees to its 764-employee work force. About 555 of them work in Eugene, the rest are scattered around the world.

In recent years, PSC has laid off workers in Eugene and transferred the work to factories in Asia. PSC says it will continue to assess what work should be done in Eugene vs. lower-cost Asia.

One of the biggest challenges PSC faces in its market is competition from companies that do all of their design and manufacturing in Asia, enabling them to sell their products at a lower price, Lee said.

"Some competitors take design and manufacturing abroad," he said. "Labor is cheap in China. At times, that's very difficult to compete against."

PSC remains strongly committed to manufacturing here in Eugene, Lee said.

CAPTION(S):

At Symantec, a local spokesman says the company is likely to add positions at its customer service center in Springfield.