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Reports: Kingston Weighs Investment in Chipmaker

Fountain Valley-based Kingston Technology Co. is considering investing in a struggling Japanese maker of memory chips, according to reports.

Kingston is said to be one of five companies lined up to buy newly issued shares and debt from units of Elpida Memory Inc., Japan’s largest maker of memory chips, according to Japan’s Nikkei newspaper.

Two Elpida units plan to raise about $470 million by selling shares and bonds to shore up the finances of their parent company, according to the report.

It’s unclear how much Kingston might invest. Technology Web site Digitimes said the company is considering an investment but details haven’t been settled.

Elpida is asking Kingston to invest about $100 million, according to Digitimes.

Other companies said to be involved are Japan’s Shin-Etsu Chemical Co., Toppan Printing Co., Advantest Corp. and Powertech Technology Inc. of Taiwan.

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.

Last month, 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.

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