Fountain Valley’s Kingston Technology Co., the biggest maker of memory products for computers and consumer electronics, is on track to see record sales this year.
The company’s cofounder and President John Tu said recently that the company is setting its sights on growing sales by about 45% to roughly $6 billion in 2010.
“We expect about 40% to 50% growth for 2010 with a global revenue target of around $6 billion for this year,” Tu said in a report by CyberMedia India Online Ltd., an online magazine that covers business news in India.
Kingston reported 2009 sales of $4.1 billion, roughly flat from the $4 billion in sales for 2008.
Privately held Kingston has about 800 workers here. It doesn’t disclose profits.
The company’s bread-and-butter business is memory modules—circuit boards loaded with memory chips that speed up the performance of computers and consumer electronics.
It also makes flash memory products, including thumb drives and storage cards for cameras, cell phones and computers.
Kingston is the second-biggest maker of flash products in the U.S. after No. 1 SanDisk Corp. In other countries, it’s No. 1 in flash and Milpitas-based SanDisk takes the second spot.
Some $6 billion in sales would be a high for Kingston and would put it ahead of Newport Beach’s Pacific Life Insurance Co. for the title of largest private company in Orange County.
Pacific Life had $5.3 billion in 2009 revenue, which was up 2% from a year earlier.
At $6 billion in yearly sales, Kingston also would rival the largest public companies.
If Kingston were public, it would rank among the top five companies here, somewhere alongside Irvine’s Broadcom Corp. with projected 2010 yearly sales of $6 billion and Irvine-based Allergan Inc. at about $5 billion.
The county’s largest company of any type by sales is Santa Ana’s Ingram Micro Inc., with projected 2010 sales of $34 billion.
Kingston is benefiting from a rebound in memory chip prices—which pushes up the price on its products—a rebounding economy and market share gains in the downturn.
“When we faced the downturn, a lot of our competitors barely survived,” said Kevin Wu, vice president of business development at Kingston. “It allowed Kingston to get stronger and bigger and to get into new retail and sales channels that we weren’t in before.”
Market Share
In 2009, Kingston grew its share to 40% of the market for memory modules, according to data from El Segundo-based market researcher iSuppli Corp.
That’s up from 33% in 2008 and 28% in 2007.
The nearest competitor, Taiwan’s A-Data Technology Co., had 7.4% of the market last year. Northern California’s Smart Modular Technologies Inc. was third at 7.1%.
Kingston remains on track but still is cautious, according to Wu. He said the company might not hit the $6 billion sales mark this year.
“I think we will probably run a bit short of that,” he said. “Average selling prices went up nicely during the first quarter, but in the second quarter we fell short a bit on our target.”
The second quarter saw a slight oversupply of chips, which crimps Kingston’s sales and profits and pushes down the value of its chip stockpiles.
Kingston also saw its European sales slide on the strengthening U.S. dollar against the euro and the region’s debt crisis.
“To sell our products in Europe is harder,” Wu said. “It costs more for Europeans to buy U.S.-made products. It’s the reverse from two years ago” when the euro was strong against the dollar.
Kingston is going after growing markets. The company is planning to expand operations in Brazil, Russia, India and China, ac-cording to Wu.
“We want to have those four countries covered,” he said.
Wu is heading the effort to set up a sales office in Moscow and is scouting contract manufacturers to produce Kingston’s products in Brazil.
CyberMedia India Online reported that Kingston has plans in the next few years to set up a plant in India to meet increasing demand for memory products, citing a statement from Vishal Parekh, a marketing manager for Kingston’s Asia Pacific region.
Wu declined to elaborate.
India is one of its fastest-growing markets, according to the CyberMedia India report. The company expects to see sales in the region grow 10% to 15% this year, Parekh said.
