Dense-Pac Consolidates; Lantronix Drops Deal
It’s hard to remember memory being so bad. And the next few months could be a time many memory makers could end up wanting to forget.
Insiders and analysts agree the computer market can’t support as many memory companies as it has in the past. And various industry players are quietly muttering that they won’t be the ones to go, as they talk as if competitors will have a liquidation sale in a year. I guess this is when it gets interesting.
Not long ago, PC sales were humming along,as fast as 30% in one quarter,and driving the memory products industry, which is heavily concentrated in OC. In the late-1990s, piles of brand-spanking new machines flowed into Corporate America to replace old models. Inside the new PCs: memory from, among others, Fountain Valley-based Kingston Technology Co., Rancho Santa Margarita-based Viking Components Inc. and Santa Ana-based SimpleTech Inc. Even as pundits predicted personal computers would become irrelevant, sales were going gangbusters.
Of course, that changed last year when harsh economic conditions coupled with the normal boom-and-bust tech cycle spurred both consumers and businesses to become stingy. Despite efforts to sell through new channels, things have not gotten much better: Kingston Technology this month let go 80 more employees.
The problem isn’t that the memory modules,the sub-assembly computer parts that house the main computer memory,aren’t selling. They’re just selling for less money.
In fact, prices for memory have fallen by as much as 70% in recent months, leaving memory makers with the burden of having to squeeze more profits out of fewer sales dollars.
In Kingston’s case, most of the people they let go were sales staff who focused on selling to massive distributors such as Santa Ana-based Ingram Micro Inc., which in turn sell to computer makers. These distributors are keeping a wary eye on their own inventories and aren’t buying many more parts from the memory firms.
Memory company executives love to say they don’t have the clairvoyance to know when the market will pick up again. But looking at the moves being made by companies such as Dell Computer Corp., which has laid off thousands of workers, it seems that the market for traditional computer memory could be doomed. In addition to cutting staff, OC memory makers are looking at other methods of selling,including directly via the Internet,and selling other types of memory, such as cards for consumer electronic devices.
Dense-Pac Lightens Laguna Hills Load
Garden Grove-based Dense-Pac Microsystems Inc., a high-density memory products maker, is making its operation in Laguna Hills less dense.
Dense-Pac recently announced that it plans to consolidate by moving its South County manufacturing operations to its Garden Grove headquarters. The facility was acquired in Dense-Pac’s buy last October of Productivity Enhancement Products Inc. While the relocation will affect only eight people in Laguna Hills, the move should help the business to run more efficiently, according to John Sprint, chief operations executive.
“This move will result in cost efficiencies while enhancing our flexibility in responding to varying customer demands,” Sprint said.
The move did not include layoffs, the company said. In fact, 15 design engineers will stay in Laguna Hills and the company has no plans to sublease the newly opened space in the facility.
Lantronix Drops Deal
Irvine’s Lantronix Inc. said that after ongoing negotiations and due diligence, it decided not to acquire Lightwave Communications Inc. but instead plans to negotiate a supply pact with the company.
“We intend to incorporate selected Lightwave products into our own on an OEM basis, while monitoring developments in the high-end console server market,” said Lantronix Chief Executive David Thiel.
Lantronix, which makes computers that link mobile devices, had planned to acquire the privately held, Milford, Conn.-based company since early last month. Though the company didn’t comment specifically on why it pulled back from the deal, Thiel did mention that Lantronix’s customers have increased orders.
“Despite the economic slowdown, we have continued to see our customers, particularly our OEM customers, increase their orders for our products,” he said.
Veros Names CTO
Veros Software Inc., an Irvine-based maker of analysis software, recently appointed Dr. Wissam Ahmed as chief technology officer. Most recently, Dr. Ahmed was president of AI Systems Inc., an artificial intelligence company dealing with speech recognition.
Ahmed has more than 20 years of experience and teaches graduate-level computer science courses at USC, where he earned his doctorate, according to a release from the company.
AEA Award Winners
The Orange County Council of the American Electronics Association awarded top honors to local technology companies at the Eighth Annual High-Tech Awards ceremony at the Discovery Science Center recently.
Award winners were:
+++Innovative Product or Technology: Irvine’s Access360; Dense-Pac Microsystems; Irvine’s iVEA Technologies; Irvine’s Masimo Corp.
+++Outstanding Medical Technology Company: Irvine’s Edwards Lifesciences Corp.
+++Outstanding Public Company: Irvine’s Newport Corp.
+++Outstanding Executive of a Private Company: Gordon Benhard, president and chief executive of Irvine’s Elpac Electronics Inc.
+++Outstanding Executive of a Public Company: Walter Straub, president and chief executive of Irvine’s Rainbow Technologies.
+++Catalyst: Gene Goda, who is on the boards of Powerwave Technologies, CMD Technology and the Forum for Corporate Directors.
+++Greg Ross Community Service Award: Phil Beaudoin, executive director, Orange County Council, AEA.
