Corrections or additions?

This article by Barbara Fox

was prepared for the June 5, 2002 edition of

U.S. 1 Newspaper. All rights reserved.

Growth for Discovery Semiconductors

Abhay Joshi has tripled his company’s space with a move

from 5,000 feet at 196 Princeton Hightstown to 1,400 square feet at

Sylvia Drive. Phone and fax are new. Also, in what Joshi calls "organic

growth" over a three-year period, Discovery Semiconductors has

doubled in employees. It now employees 24 people plus a handful of

summer part-timers.

The nine-year-old firm designs custom semiconductor chips for NASA

and the U.S. Air Force and makes monolithic opto-electronic integrated

circuits for telecommunications. In the last two years it made the

Fast 50 list, showing $4 million net income in 2000 and $6 million

in 2001.

That growth curve won’t continue this year, because of the unfavorable

market for telecommunications, says Joshi. He expects to achieve a

plateau or be down five or 10 percent. But since this is a private

company, supported by income, with investments from friends and family

and bank loans, he is not worried about how the balance sheet looks

to investors.

"Our business goals were pretty conservative and pedestrian,"

he says. "We were not planning to go to the moon in two years.

We had to grow within our means."

Joshi, now 38, grew up in Pune, India, 100 miles south of Bombay,

and earned his bachelor’s degree before coming to the United States

in 1986 to do graduate study at New Jersey Institute of Technology.

In 1993 quit his day job and leased space in the Dataram complex (U.S.

1, April 28, 1999).

That summer Randy Harmon (now director of the Technology Commercialization

Center at the Small Business Development Center in Newark) and Joe

Montemarano (now at Princeton University) helped Joshi find a semiconductor

facility to fabricate his chips. Now he has his own clean room, designed

with the help of IBM retiree Angelo Rapa. Clean rooms take a long

time to complete — Joshi took possession of the new space last

October and has just completed the move-in.

Asked about the future of fiberoptic companies, his prediction is

dour. "Most of the people who were discharged in fiberoptics will

have to make a change in careers," he says. The bubble burst,

"and we will not reach bubble levels for three to four years."

He also cites a basic trend to move fiber optics manufacturing to

Asia, and predicts over capacity and less demand.

"We also had a downturn in the business. The key difference is,

we were a small company to begin with," says Joshi.

So why did he expand? "Stupidity," he jokes. "Actually,

our business is small but our return on investment is pretty good."

Another plus for his business model is that — unlike other fiber

optic work — it cannot be relocated offshore. Work on Department

of Defense contracts needs to be done in the United States.

— Barbara Fox