Kingston Technology Corp., founded and run by billionaires John Tu and David Sun, is consolidating its hold over a joint venture it set up with a Taiwanese company a decade ago.
Fountain Valley’s Kingston will become the majority shareholder in the firm that was set up with Phison Electronics Corp. (TPEX:8299) to make and market specialized types of memory that go into smartphones, tablets and other smart devices.
Kingston said July 14 it is buying Phison’s shares in the joint arrangement known as Kingston Solutions Inc. for about $60.3 million. It’s the company’s largest reported acquisition in over a year, although its founders have also over that time invested heavily in companies not tied to Kingston, such as Irvine-based medical device firm Fluxergy LLC.
Kingston Technology makes flash memory products, gaming equipment and other computer-related memory products. It’s Orange County’s largest private company by sales.
The firm had revenue of $12.8 billion last year.
Kingston Brand
Products bearing the familiar Kingston brand name include the ValueRAM line of memory and DataTraveler USB flash drives, while its HyperX brand of high-end gaming equipment is well known within the video game community.
The company also runs a services division that includes the memory that Kingston makes on behalf of PC manufacturers.
Tu and Sun are both longtime fixtures on the Business Journal’s OC 50 listing of the area’s most influential executives. The wealth of each is estimated by the Business Journal to be in the $5.8 billion range (see page 22).
Phison is a maker of controller chips that handle operations including the reading and writing of data on flash drives and other devices.
In 2010, Kingston teamed up with Phison to accelerate the adoption of what’s called embedded memory. Embedded memory is a small chip that houses a controller and flash memory together in one unit, which is then used in smart devices including robotic vacuums, fitness bracelets, smart doorbells and watches, Bluetooth speakers and other household consumer devices.
“The joint venture between our two companies has served its purpose and allowed both Kingston and Phison to find success in the embedded memory space,” Kingston Public Relations Manager David Leong told the Business Journal.
“The transaction allows both companies to greater pursue individual business goals and strategies,” according to Leong.
He added: “Phison and Kingston remain terrific partners. Outside of embedded memory, Kingston utilizes Phison controllers in our USB flash drives, memory cards and SSDs (solid state drives). The relationship remains strong and does not change with the KSI transaction.”
Long Term
The KSI joint venture leveraged Phison’s expertise in controller technology with Kingston’s operational proficiency in memory solutions.
K.S Pua, CEO and chairman of Phison, said, “Kingston is not only a long-term partner of Phison, but also one of the key enablers of Phison’s growth, our relationship remains strong and will continue.”
“We are selling our shares in KSI to Kingston so we can focus on further developing our core technology, as well as better strategize our business goals,” Pua added.
