Nearly five years ago, the Pittsburgh Digital Greenhouse was launched with high hopes and fanfare, spurring stories of a sputtering steel town seeking to reinvent itself as bubbling micro-chip hub. That, of course, was before the economy tanked, taking with it visions of the region turning into a flourishing semiconductor and tech job mill.

Keith Srakocic, Associated Press Then-Gov. Tom Ridge gestures as he announces on July 6, 2000, plans by Sony Corp. to open a semiconductor plant in Pittsburgh as part of the Pittsburgh Digital Greenhouse.

But could the recent sale of one Digital Greenhouse member to another -- O'Hara-based electronic design hardware maker Neolinear Inc. to San Jose, Calif.-based Cadence Design Systems -- signal that the region's fledgling microchip industry has come of age? Maybe, some observers believe, but it's far too early to make that call.

Cadence played an integral role in the formation of the Digital Greenhouse, whose charge was to lure software and small computer chip designers and firms to the region, making it a center for a nascent but promising technology built around powerful semiconductor chips no bigger than a thumbnail. And Cadence's purchase of Neolinear -- the latest in a smattering of California companies snatching up a burgeoning local tech firms -- comes as discussions are to begin on the Digital Greenhouse's future.

Envisioned as a five-year job engine and scheduled to sunset next year, the Digital Greenhouse has worked fairly well, even as Cadence has faltered, its proponents say. Last year Cadence lost $16.7 million on revenue of $1.1 billion. The Greenhouse helped boost the number of chip design companies in the region to 35, including a dozen that were either formed or opened shop here, putting Pittsburgh on the map in the world of semiconductors. Employment among those companies is still small, just under 230, but their ranks numbered hundreds more at one point before the dot.com collapse.

"When we first went to call on companies, they kind of looked at us and said, 'Pittsburgh, why would we go there?' " said Don Smith, vice president of economic development for the University of Pittsburgh and Carnegie Mellon University, jointly known as MPC, and part of the Digital Greenhouse's development team. "Now they say, 'Oh yeah, that's where the Digital Greenhouse is.' "

Still, almost five years and $25.3 million in state money later, the fledgling systems-on-a-chip industry has fallen well short of some pretty lofty goals set by then-Gov. Tom Ridge. At the time, Ridge, now Homeland Security secretary, buoyantly predicted the effort would create 1,500 jobs in three years.

Of course, few foresaw the devastation that would be wrought by the technology industry's collapse. The wreckage took with it some 670 local jobs that had been created at Digital Greenhouse companies, wiping out much of its early, noteworthy gains that at one point had it running ahead of Ridge's optimistic schedule.

That's why observers are now hoping Cadence's deal last week for Neolinear, for which terms were not disclosed, and Silicon Valley-based Network Appliance's recent $300 million buyout of O'Hara-based data storage maker and Digital Greenhouse member Spinnaker Networks, could suggest the tide has turned again in their local industry's favor.

Five years ago, talk of systems-on-a-chip (SoC) technology seemed like pie in the sky -- at least locally.

It was then that a team led by Smith, Pittsburgh Regional Alliance president Tim Parks, PRA executive vice president Mark Kurtzrock and state deputy secretary for Community and Economic Development Tim McNulty went on a top-secret West Coast reconnaissance mission to find ways to parlay Pittsburgh's research strengths into jobs and companies. "There was a realization starting to grow in the region and state that the old Pennsylvania economy wasn't cutting it," Smith said.

Enter Cadence, which was pushing the design of tiny semiconductor chips that are, despite their size, are more versatile than traditional computer chips and considered by some to be the wave of the future in the semiconductor industry. Cadence was hired -- at a fee of nearly $3 million -- to lead Ridge's "Project Renaissance," which it was hoped would hatch Pittsburgh's own system-on-a-chip industry.

The goal was attract major electronic and chip companies to set up shop and grow new companies in partnership with Penn State, CMU and Pitt, and take their products to market quickly. It was a strategy based on a model that Cadence had developed in Scotland.

Officials involved in the project deny that the ultimate goal was for Cadence to open an R&D facility in Pittsburgh. "We courted Cadence and Cadence courted us," said Smith.

In 2000, Project Renaissance became the Digital Greenhouse, even though Cadence pulled back to address problems with its operations. The executive that had spearheaded its Pittsburgh initiative also resigned.

Still, Cadence remained a member of the Digital Greenhouse, and was joined by three other chip makers that would open design centers in the area -- Oki, Sony Corp. and RedCreek Communications. Of those only Oki remains.

In late 2000, Cadence also invested in Neolinear and the following spring, began selling one of its chip design products. That partnership expanded last year, leading to discussions that culminated with the buyout.

"We're a small piece of their big pie," said Neolinear Chief Executive Officer Thomas Beckley. While the Greenhouse "helped," it was Beckley's ties to a Cadence executive vice president Felicia James, who heads the division of Cadence that purchased Neolinear, that really made a difference. Beckley had met James several years ago in a previous job, and when he took over the helm at Neolinear, he connected with James again.

"She's been interested in the technology since its early days at Carnegie Mellon," Beckley said of James. "Like all industries," the micro-chip industry is "a small network."

Cadence has pledged to maintain Neolinear's Pittsburgh presence, retaining all but one of its 55 employees in the RIDC Industrial Park in O'Hara.

"In the normal world,'' small companies such as Neolinear "would never get on the radar screen of very large companies" such as Cadence, Kurtzrock said. "It's unlikely [the Neolinear sale] would've happened without the Digital Greenhouse," added Smith, noting Cadence's continued participation in the consortium.

Greenhouse programs, which include continuing engineering education, research projects and talent recruitment, give Cadence access to commercial-ready ideas churned out from local start-ups and universities. With major tech players Seagate Technology, Cisco Systems and IBM as active Digital Greenhouse members, "This is a terrific place to network with the technical folks from those companies," said Ted Vucurevich, Cadence's chief technical officer of advanced research and development at Cadence.

"You're really drawing upon the expertise of the industry,'' said McNulty, now special assistant to the provost at CMU. "That's been an important contribution to the region.''

Still, when Digital Greenhouse board members met yesterday, the organization's future was part of the discussion.

"The short answer is that the Greenhouse may not exist much longer." Greenhouse Chief Executive Officer and President David Ruppersberger said in an interview earlier this week, prior to yesterday's meeting. "It'll be next year or the following year that we ramp things down."

There's also the question of jobs. Despite the economy's upturn and the expectation of growth on the horizon, few doubt that state officials and former Digital Greenhouse chief-turned Secretary of Community and Economic Development Dennis Yablonsky are looking to drum up more business for the region.

Yablonsky could not be reached for comment, but Richard Overmoyer, director of technology investment for Yablonsky's department, said that without the Digitial Greenhouse's efforts, job loss in the region's tech sector would have been far more substantial. "There is no document that says it has to end on this date. It's an active, open process."