SUNNYVALE -- Helping companies move, store and process information is the core of PMC-Sierra's business.
Incorporated in 1983, the company sells semiconductors that shuttle information across a variety of devices, from wired and wireless networks to servers and data-storage devices. Its customers traditionally have been telecommunications carriers. But in recent years, it has expanded its focus to take advantage of the explosion of mobile devices, and the vast amount of data generated by individuals and corporations.
The company, which has about 1,500 employees worldwide and about 250 in California, had a difficult last year. Its sales tumbled 19 percent to $531 million and it lost $333 million after earning a profit of nearly $85 million in 2011.
But 49-year-old Greg Lang, who has been its CEO since 2008, has high hopes for PMC-Sierra and envisions eventually pushing its revenue past the $1 billion mark. He discussed his company's market niche in an interview that was edited for length and clarity.
Q: Can you talk about how the company has evolved?
A: PMC started out as a telecommunications chip company. That was our basic business for probably the first 10 to 12 years of the company. It has evolved in the past five, six or seven years into a very different mix. We still have telecommunications products for both wired and wireless networks, but today more than 65 percent of our revenue comes out of storage.
Q: What do you mean by storage?
A: It's a different type of network. But we're still moving bits across wires, we're still switching data between different things. In this case, it's hard discs. I think a lot of it comes from the foundation of the company in telecommunication networks. When my predecessor looked around at where we could leverage that knowledge, that skill, the storage part of the business, looked like a very practical extension. And it has been a very good one for us because that part of the business has grown very nicely.
Q: Many businesses hope to take advantage of so-called big data, the enormous amount of information being produced by individuals and companies. Is PMC-Sierra doing that, too?
A: Well, big data has become a very widely used -- maybe overused -- term. The way we think about or look at big data is different from some other companies. There are companies that look at big data from an analytical point of view -- how do you manage, how do you mine that kind of data. Ourselves, we look at it from a traffic standpoint. How do you move that around?
Q: Can you give an example, say involving a fiber-optic communications network?
A: Some of our silicon sits in a router. Some of it sits in what's called a transport box. If you can imagine a big box sitting in a central office, there is a fiber-optical module that plugs in and that comes from other people. We'll take the data that comes off that and route that traffic to the rest of the system.
A: The part of HP that we work with is actually one of the strongest from an execution, market-share and margins standpoint. We are dealing with the server and storage group. They've been the market leader in servers, I think, since servers were kind of invented. HP executes as well or better than almost everyone else I see from the server perspective and they invest in innovation. I think they have all the assets to continue to be a very powerful company in the server space. So does it concern me? Yes. I don't like to see my largest customer have these kinds of struggles. But in the areas in which we participate with them, I would not bet against them.
A: Maybe storage is the best example. Our primary competitor in storage is LSI. They are a good company. What PMC does well is invest in hard stuff. We believe that's kind of where we set ourselves apart. We feel we're very fortunate to have a very strong technical staff.
Q: Are you doing any hiring these days?
A: 2012 was a very tough year for carrier spending. Our revenue has declined in the past year so we've put the brakes on major new hiring. We are replacing people, but we're not doing a lot of expansion. However, I am cautiously optimistic that we're seeing some signs of things improving.
Contact Steve Johnson at 408-920-5043.
Five Facts about Greg Lang
1. When he was young, his hero was NFL quarterback Roman Gabriel.
2. While living in Michigan, he played on several youth-oriented football teams with Jim Harbaugh, the 49ers coach, and his brother, John Harbaugh, coach of the Baltimore Ravens.
3. He worked a variety of jobs from food service to furniture moving to pay his way through college.
4. After that experience, he is helping his children and all of his 16 nieces and nephews get through college.
5. His favorite hobby is snow and wake boarding.
Position: President and CEO of PMC-Sierra
Residence: San Francisco
Education: Bachelor's degree in business administration, University of Michigan; MBA, Washington State University
Previous jobs: President and CEO of Integrated Device Technology; vice president and general manger of the platform networking group at Intel, where he also held other management positions
Family: He and his wife have a son and a daughter.