62.4 F
Laguna Hills
Monday, Mar 18, 2024
-Advertisement-

Kingston Raises Stakes on Taiwan Supply Chain

Fountain Valley-based Kingston Technology Inc. has taken a majority stake in another Taiwanese memory storage maker in an effort to shore up its supply chain and meet growing demand.

The company last week acquired a 21% stake in Panram International Corp., which makes DRAM chips, the most common type of memory used in computers, and Kingston’s biggest source of revenue.

Kingston paid $4.9 million for the company’s shares in a private placement, becoming Panram’s largest shareholder. Investors sent Panram’s shares up 7% on Taiwan’s over-the-counter market on June 27, the day after the company announced the deal.

Kingston is expected to boost orders for Panram after the investment, according to industry sources and reports.

Kingston doesn’t comment on relationships with partners and vendors as a matter of policy, spokesperson David Leong said.

The Panram deal is the second significant acquisition Kingston has made in Taiwan in the last two months.

In late March it purchased some 274 million shares of Rexchip Electronics Corp. from Powertech Technology Corp. for an estimated $128 million.

Media reports pegged Kingston as Rexchip’s largest shareholder, although its total stake is unknown.

Both buys are expected to position Kingston with a steady supply of DRAM chips in the years to come as demand surges for cloud and PC storage.

That’s helped Kingston make gains in the embedded-storage market for servers as more companies look to the cloud. The market is a relatively new one for Kingston and shows promising growth.

Kingston has begun to target a broader range of niches in the consumer and corporate markets, a shift that’s been driven by a drop in prices of memory components and products, including DRAM, coupled with strong demand for higher storage capacity on mobile devices and personal computers.

The DRAM market has been hotly contested for the past several years, as stiff competition from Asian manufacturers has driven down prices.

Declines in the price of DRAM chips make solid-state drives more affordable, creating opportunities in the mass market. Kingston is seeing an influx of consumers buying these solid-state drives to improve computer performance to stream more content, improve video game play and store other data.

Kingston is the world’s largest memory products maker for computers and consumer electronics. It employs about 820 workers at its Fountain Valley headquarters and 4,400 companywide.

The Business Journal estimated the company had $5.8 billion in sales in 2011, down from a record $6.5 billion in 2010, when it benefited from a global surge in sales of DRAM products.

It entered 2011 with a warning that it was “extremely unlikely to meet the same sort of revenue” as the prior year.

Kingston was the largest private company in Orange County last year but lost the local crown in 2012 to Newport Beach-based Pacific Life Insurance Co., which posted revenue of $6.7 billion last year.

Want more from the best local business newspaper in the country?

Sign-up for our FREE Daily eNews update to get the latest Orange County news delivered right to your inbox!

-Advertisement-

Featured Articles

-Advertisement-
-Advertisement-
-Advertisement-
-Advertisement-

Related Articles

-Advertisement-
-Advertisement-