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Report: Kingston Takes Stake in Taiwanese Memory Chipmaker

Fountain Valley’s Kingston Technology Co., the biggest maker of memory products for computers and consumer electronics, has taken a small stake in a Taiwanese chipmaker, according to reports.

Kingston paid roughly $60 million for shares of Taiwan’s Powerchip Semiconductor Corp., a maker of memory chips, according to a report on technology news Web site digitimes.com.

Powerchip is using the money from Kingston to keep its stake in chipmaker Rexchip Electronics Corp., According to a source familiar with the company.

Rexchip is a venture formed in 2007 between Powerchip and Elpida Memory Inc., Japan’s biggest memory chipmaker.

A spokesman for Kingston declined to comment for this story.

Kingston buys memory chips from Elpida and others and assembles them onto circuit boards that are used for short-term data storage in computers.

The company also makes memory cards that store pictures, songs and other data in consumer electronics.

Prices for memory chips have been in a freefall since last year, crimping sales and profits for Kingston and others. As the price of memory chips fall, so do prices for Kingston’s products.

In February, Kingston cofounder and President John Tu told Reuters that his company “wants to play a helpful role” in consolidation playing out among memory chipmakers, but didn’t elaborate.

Kingston, which has yearly sales of $4 billion, has a practice of working with its memory chip suppliers, including helping them out if they fall into dire straits.

A few months ago a handful of struggling Taiwanese chipmakers were forced to consolidate to survive.

A few of them combined to form Taiwan Memory Co. and took an $860 million bailout from the government in Taipei.

Kingston also helped back a new loan for Taiwan’s ProMOS Technologies Inc., which now is part of Taiwan Memory.

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