Fountain Valley-based memory products maker Kingston Technologies Co. has reached a turning point at its largest site in Asia.
Kingston’s plant in Shanghai is running at full capacity, pushing the company to decide whether to expand or outsource, according to a report on Asian tech news Digitimes.com.
The plant, which opened three years ago, more than tripled Kingston’s monthly production. It churns out more than 5 million memory boards for computers and networking gear each month.
Shanghai accounts for about half of Kingston’s global production, according to spokesman David Leong.
The company only has used about a third of the land it owns in Shanghai, leaving room for construction of a second plant, according to Digitimes.com.
“Kingston does have more land available where our current factory is in China, so we can just use up more of the land during expansion,” Leong said in an e-mail.
But the company isn’t rushing to make a move, he said.
“There is no plan in place at the moment to expand, but it is an option being considered,” Leong said. “It just depends on how the market fills out. Memory is a commodity business and it’s very difficult to forecast the future.”
A less permanent expansion option is to outsource the work, Leong said.
Kingston and other local memory products makers got squeezed earlier this year when prices for memory chips fell dramatically, putting pressure on suppliers and wreaking havoc on customers’ inventories.
Prices have since stabilized and Kingston is looking to the market for clues.
“Historically, we have tried to remain very consistent with employee levels,” Leong said. “We all know what happens if we boost the number of employees and the market takes a downturn.”
The company, which has long been the top dog for memory parts in the U.S., is quickly grabbing market share in China.
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Hitting full capacity: Kingston entertains expansion ideas in Asia |
Kingston has seen its market share grow to about 25% in China since it set up shop there in 2001, Leong said.
The company also is the top seller of flash memory in China, according to the Digitimes report. Kingston owns a site in Shenzhen that makes flash memory for digital cameras and other consumer electronics.
A quarter of Kinston’s sales are from Asia, according to Leong. About 40% of that business came from China during the first half of 2007, he said.
Kingston is looking to see total sales top $5 billion in 2007, up from about $3.7 billion last year, according to Scott Chen, vice president of the Asia-Pacific region.
Mindspeed Amped on Startup Buy
Newport Beach-based chipmaker Mindspeed Technologies Inc. agreed to buy startup Ample Communications Inc., which makes controllers that speed up communication between computers in a wide-area network.
Mindspeed is set to pay $4.6 million in cash for Fremont-based Ample Communication’s assets and the rights to the technologies it developed.
Privately held Ample was foreclosed on by its biggest creditor, the company said. It did not name the creditor.
The deal is set to close by the end of the month.
The buy is expected to add about $3 million in sales to Mindspeed during the next couple of quarters, the company said.
Mindspeed had a recent market value of about $200 million.
“With this acquisition Mindspeed will enter a strategic new market segment, which we believe will significantly diversify our wide area network portfolio,” said Chief Executive Raouf Halim.
Ample got its start in 2000 and was backed by a handful of venture capital firms, raising as much as $62 million in four rounds of funding, according to industry Web site Lightreading.com.
The company once had as many as 95 workers in Fremont and India.
Ample began to see business slow in 2003, despite several design wins, and it ran out of money, according to an August report on Lightreading.com.
Fast-Growing Tech Companies
A handful of local technology companies made it onto Inc. magazine’s list of the 500 fastest-growing private companies in the U.S.
California had about 81 fast-growing companies on the list, up from 66 a year ago and more than any other state.
– No. 19 Irvine’s Vizio Inc., a seller of low-cost, flat-panel digital TVs.
– No. 197 Irvine’s Neudesic LLC, a reseller of Microsoft Corp.’s business software.
– No. 240 Aliso Viejo’s Blue Wave Micro, a tech outsourcing and consulting firm.
– No. 370 Laguna Niguel’s Deep Surplus, which buys electronics, cables and other supplies that are overstocked, surplus, discontinued or from bankrupt companies, and resells them to consumers and small businesses via its Web site.