Fulcrum Microsystems Inc.

Calabasas

Business: Designer of technology microchips that are used in high-speed data applications

Founded: 2000

Two-Year Growth Rate: 1,360%

2008 Revenue: $7.3 million

Microchip designer Fulcrum Microsystems Inc. isn’t as big as some of its competitors. It doesn’t employ as many people as the competition and it doesn’t have as many lines of business. Yet, the firm is No. 1 on the Business Journal’s list of the fastest growing companies.

So, how did the company garner that distinction?

For starters, Fulcrum is an innovator. Founded in 2000 by two Caltech doctoral students, the company was created with a half-dozen technology patents in hand and has gotten a few dozen more since.

Fulcrum’s proprietary microchip technology includes superhigh-performance circuits that the company claims give it a competitive edge. The chips are used in a variety of networked systems, most commonly in data center applications.

Fulcrum also eschews a buttoned-up atmosphere, giving its Caltech-heavy work force flexible hours and other perks. There is even a monthly Grapes and Gripes meeting in the cafeteria of the firm’s Calabasas office, so that its 60 employees can discuss workplace issues and other matters.

The success has allowed the company to compete with the big boys, including Broadcom Corp., a far larger Irvine company with more than 7,000 employees that routinely has quarterly revenues topping $1 billion. Fulcrum Chief Executive Bob Nunn said the company has 170 “design wins,” instances in which the company beat out Broadcom to garner business.

“You have very big competitors and as a startup you have to be differentiated from competitors,” said Nunn, an engineer by trade who joined the firm eight years ago. “Our entire product is base on this technology advantage.”

Among the company’s bigger clients are IBM and Sun Microsystems. Fulcrum designs its chips in Calabasas and manufactures them in Asia. The company works closely with clients on designing products to work in various applications, often modifying its chips and software. Fulcrum makes chips for use in the so-called “10 Gigabit Ethernet market,” high-speed networks used in advanced communication systems.

George Van Horn, a senior analyst at consultancy IBISWorld Inc. who covers the semiconductor and telecom businesses, said that the company has planted its flag in the one corner of the microchip business that is actually growing in the United States. Because much chip manufacturing has moved overseas, companies that succeed must be able to offer unique engineering expertise and proprietary products.

“This company is doing the one thing that the U.S. is really good at, which is engineering sophisticated solutions,” Van Horn said.

While Nunn said that the recession has somewhat slowed business this year, Fulcrum is predicting another period of strong growth. To prepare for more work, the company recently brought in six new temporary workers and has plans to hire more soon.

Nunn said the company estimates it will double or triple its revenue in the next couple of years as it continues to design and manufacture its advanced chips. Van Horn agreed that that further growth in likely.

“What’s really unique about (the company is it relies) on being the engineering brains behind designing high-tech semiconductor chip solutions,” he said.

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