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Daily Business Report-July 22, 2015

Daily Business Report-July 22, 2015

Ever since the Snapdragon 810 chipset was released it has been plagued with overheating issues, causing companies such as Samsung and HTC to sever ties with the company’s mobile chip architecture. 

Qualcomm Preparing to Lay Off

Several Thousand Employees

4,000 Jobs at Stake

Reuters and other media

Chipmaker Qualcomm Inc is preparing to lay off several thousand employees, or more than 10 percent of its 30,000-strong workforce, the Information website reported.

The chipmaker is expected to announce the job cuts when it releases its quarterly results today, the tech website reported, citing people inside and outside of the company.

Qualcomm reported a 46 percent drop in second-quarter profit in April.

Qualcomm reported a 46 percent drop in second-quarter profit in April.

Qualcomm, which reported a 46 percent drop in second-quarter profit in April, is facing increasing competition from Taiwan’s MediaTek Inc and a handful of small Chinese companies that specialize in making chips for low-priced phones.

The target units for the job cuts could not be identified, the website said.

Qualcomm could shift more research and development activities to low-cost countries such as India for further cost savings, the Information reported, citing one person.

The company could not be immediately reached for comment.

Hardware blog Fudzilla reported last week that the chipmaker might slash 4,000 jobs as part of a major restructuring.

Qualcomm forecast third-quarter revenue and profit below analysts’ expectations in April, saying the loss of a key customer and delays in product launches by some smartphone makers will hurt sales of its flagship Snapdragon chips.

Longtime customer Samsung Electronics Co opted this year to use an internally developed processor for its new Galaxy S6 smartphone and Note rather than Snapdragon chips.

Qualcomm has also been under pressure from hedge fund Jana Partners to spin off its chip business from its highly profitable patent-licensing business.

In addition, EU antitrust regulators are investigating whether Qualcomm uses illegal tactics to shut out rivals, six years after slapping a record 1 billion euro ($1.09 billion) fine on Intel Corp for a similar offence.

The layoffs would shade any previous restructuring and arrive at a time when sales are underwhelming. In December 2014, the company revealed it would slash 900 jobs before ending up removing 1,500 jobs. Considering the fact Qualcomm has about 31,000 employees in total, removing so many workers would mean cutting 12.8 percent of the workforce.

Ever since the Snapdragon 810 chipset was released it has been plagued with overheating issues, causing companies such as Samsung and HTC to sever ties with the company’s mobile chip architecture. However, with the next-gen Snapdragon 820 in tow and sales possibly on the rise, the company insists prior overheating issues will be overcome alongside Samsung’s 14 nm process expertise.

A mass exodus of this size shows how tough it is to compete with scaled yet robust chip players such as Nvidia Corporation and Intel Corporation. Qualcomm has suffered from a lack of options in the mobile market, opting for business products ahead of general consumer ones, which has led to an array of problems in case of a drop in sales for its flagship chip architecture.

The company’s direct competitors, Mediatek and ARM, have less than a third of Qualcomm’s employee base. The fact that they also have better financial statements means the company is in danger of being forced to shrink in a bid to offer better mobile SoC solutions.


A rendering of a proposed NFL stadium in the Mission Valley area of San Diego. (Joe Cordelle)

A rendering of a proposed NFL stadium in the Mission Valley area of San Diego. (Joe Cordelle)

Quick EIR for Stadium?

Not So Fast, says L.A. Law Firm

City News Service

A Los Angeles-area law firm is challenging an early step taken by the city to develop an environmental impact report for a proposed NFL stadium in Mission Valley.

In a 34-page letter addressed to Senior Planner Martha Blake and dated Monday, lawyer Douglas Carstens urged the city to reissue a document called a “Notice of Preparation,” and for city officials to “develop a full understanding of the environmental consequences” before constructing a stadium.

The lawyer said his firm, Chatten-Brown & Carstens LLP of Hermosa Beach, is involved in efforts to ensure state environmental laws are followed in projects, including sports facilities. The firm has opposed exemptions to environmental requirements for previous stadium proposals in Industry and Los Angeles.

“We view the Mission Valley proposal as the latest in this string of poor policy decisions seeking quick approval and avoidance of (the California Environmental Quality Act) rather than protection of the environment and affected communities to the greatest extent possible and necessary,” Carstens wrote.

The city of San Diego is working on an expedited environmental report, known as an EIR, with the aim of getting a ballot measure before voters in January — which is when National Football League owners could make a decision on whether to move a team to Los Angeles.

The Chargers have been asking for a new stadium for nearly 15 years, and have purchased property in Carson on which they could build a facility — possibly in concert with the Oakland Raiders.

The faster EIR is part of the city’s effort to keep the Chargers in town.

However, Mark Fabiani, who speaks for the team on stadium issues, said the environmental studies usually take 12-18 months. He said a report completed in a shorter time period expose the city and team to litigation.

Among the points raised by Carstens are that the Notice of Preparation fails to mention other development that could take place on the 166-acre Qualcomm Stadium site.

While the mayor’s office recently pulled so-called “ancillary development” off the list of funding options, the lawyer said the demolition of Qualcomm Stadium and further development next to the new facility are foreseeable consequences of the project.

However, city officials said now that other projects associated with the stadium are no longer being considered, it is not appropriate to study them as part of the EIR.

Carstens also described the current stadium as a potentially historic resource, since it is one of the last remaining mid-century multi-purpose stadiums in the country.

Local Researchers Receive $200,000

Grant by the Cancer Research Institute

Stephen Schoenberger

Stephen Schoenberger

Ezra Cohen

Ezra Cohen

Stephen Schoenberger, a professor at the La Jolla Institute for Allergy and Immunology, and Ezra Cohen, a professor of medicine at the UC San Diego School of Medicine Moores Cancer Center, have been awarded a two-year, $200,000 grant by the Cancer Research Institute.

Schoenberger and Cohen will use the grant to study whether the immune system of patients suffering from head and neck squamous cell carcinoma contains immune cells capable of launching an immune system attack directed at tumor cells and how to best increase their numbers and efficiency.

“The results of these studies will provide new insights and opportunities for the treatment of head and neck cancer and bring the possibility of adaptive cancer immunotherapy and personalized cancer vaccines a step closer to clinical reality,” said Cohen.

Cancer immunotherapy stimulates the body’s immune system to help fight the cancer instead of directly targeting the tumors. Grants of this kind are specifically designed to bridge the gap between the laboratory and clinical efforts, support clinically relevant research projects aimed at bringing immune-based therapies to patients sooner.

Council OKs Plan to Expedite

Solar Permits for Duplexes

City News Service

Residents of duplexes in San Diego could soon be eligible for expedited permits for home solar energy projects under a plan given initial approval Tuesday by the City Council.

The city already turns around solar energy permit applications from owners of single-family homes in about two days.

Extending the faster process to duplexes brings San Diego into conformance with new state law, which is necessary to keep the city eligible for state solar energy grants. The state legislation is designed to encourage more people to install solar energy products.

The plan would also adopt new state guidelines regarding homeowner appeal rights and make amendments to the municipal code on height limits.

“I would very much like to see similar expedited approval processes for other home projects similar to this, such as electric vehicle chargers in peoples’ garages, as well as gray water systems in peoples’ houses,” Councilman Mark Kersey said.

The city proposal requires a second reading before it becomes law.

Rutherford Road in Ramona was covered in mud and debris after the weekend's rainstorm.

Rutherford Road in Ramona was covered in mud and debris after the weekend’s rainstorm.

More than 130 Home and Business

Owners Report Damage from Rainstorm

More than 130 San Diego-area home and business owners have reported to the county that they sustained damage to their properties as a result of the weekend’s rainstorm that spun out of the remnants of Hurricane Dolores.

The San Diego County Office of Emergency Services is compiling damage estimates from residents who were affected by the record rainfall and flooding in some areas. San Diego County residents with property damage from the weekend’s storms can still complete a brief damage survey on the page. The survey is not a claim, and does not guarantee a disaster declaration or eligibility to receive disaster assistance.

The county will provide the information gathered from damage surveys to the state, and the governor can request that the Small Business Association make an SBA Disaster Declaration. If this were to occur, it would open up eligible residents and business owners who are uninsured or underinsured to low interest disaster loans from the SBA.

The SBA threshold for a disaster declaration is for at least 25 homes or businesses to have sustained rain or flood damage that is at least 40 percent of the fair market value of the property prior to the damage. If the SBA declares a disaster, then property owners whose properties have minor damage could also apply for an SBA disaster loan.

Personnel Announcements

Illumina Names Manager of Enterprise Informatics

Sanjay Chikarmane

Sanjay Chikarmane

Illumina Inc. announced that Sanjay Chikarmane has been named senior vice president and general manager of its Enterprise Informatics business. Chikarmane will lead the development and commercialization of products and services aimed at turning genomic data into actionable information for researchers and clinicians.

Nick Naclerio who led the acquisition of NextBio and served as the founding general manager of the Enterprise Informatics business unit, will return to the full-time role of senior vice president of corporate development.

Chikarmane joins Illumina with more than 20 years of experience in enterprise software at companies including HP, BEA Systems and most recently, SAP. Through his career, he has held a variety of leadership roles in enterprise software, including general management, go-to-market, product management and product development.

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