Fountain Valley’s Kingston Technology Co., the world’s biggest maker of memory products for computers and consumer electronics, widened its market share lead for its mainstay memory modules during the first half of the year, according to a report from El Segundo-based market tracker iSuppli Corp.
During the first six months of 2010, Kingston grew its share to 46% of the market for what’s called memory modules—circuit boards loaded with dynamic random access memory chips that speed the performance of computers and servers.
That’s up from 40% market share in the second half of 2009, iSuppli’s data showed.
Kingston sold $2.6 billion worth of memory modules in the first half of the year, up 46% from the second half of last year, iSuppli said.
Kingston outpaced the overall memory module market, which grew by 26% during the same period.
The company was able to expand its lead over rivals because “it used its prodigious buying power during a time of rising module costs to gain share,” according to Clifford Leimbach, an analyst covering memory demand forecasting at iSuppli.
“Kingston in the first half effectively used its … market dominance as a competitive weapon against its smaller rivals,” Leimbach said. “Because of its large size, Kingston has more buying power than any other third-partly module maker, allowing it to obtain more favorable pricing. Kingston passed on these lower prices to its customers, undercutting the competition.”
Kingston buys up memory chips from large manufacturers in Asia and Europe and assembles them on to circuit boards, forming memory modules.
Kingston, despite its size, is “nimble enough to shift its sales to the customer base that will generate the highest profit at any given time, whether to the PC makers or directly to consumers,” Leimbach said.
Kingston and other memory module makers benefited from a running start in the first half of the year that boosted PC sales.
PC shipments jumped 23% in the first half of 2010 from the same period in 2009, iSuppli’s data showed.
After Kingston, No. 2 Taiwan’s A-Data Technology Co. had 7.6% market share, No. 3 China’s Ramaxel Technology Ltd. had 7% of the market, No. 4 Idaho’s Micron Technology Inc. had 5.9% and No. 5 Northern California’s Smart Modular Technologies Inc. had 5.8% share.
Kingston reported 2009 sales of $4.1 billion, roughly flat from $4 billion in sales for 2008.
Its eyeing the $6 billion sales mark this year—a record for the company.
Privately held Kingston has about 800 workers here. It doesn’t disclose profits.
