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Kingston Invests $200M in Japan’s Top Memory Chipmaker

Fountain Valley’s Kingston Technology Co., the top maker of memory products for computers and consumer electronics, on Friday said it made a $200 million investment in Japan’s biggest memory chipmaker.

Kingston’s bought $125 million worth of Tokyo’-based Elpida Memory Inc.’s shares and another $75 million in bonds that convert to stock.

Elpida is set to use part of the funds to convert its factories to the latest technology for chip making, called 65 nanometer, for the size of the silicon wafers it uses.

Elpida is one of Kingston’s memory chip suppliers. Kingston buys up massive amounts of what’s called dynamic random access memory chips, the most common type used in computers, and assembles them into modules.

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

“These technological advancements by Elpida in their manufacturing process will be mutually beneficial,” the company said in a statement. “Kingston believes this investment further strengthens its long-term relationship with Elpida.”

It’s not unusual for Kingston to take a stake in some of its suppliers.

Last year, Kingston paid roughly $60 million for shares of Taiwan’s Powerchip Semiconductor Corp.

Powerchip was said to use the money from Kingston to keep its stake in chipmaker Rexchip Electronics Corp., a venture formed in 2007 between Powerchip and Elpida.

Kingston, which sees about $4 billion in yearly sales, also helped back a new loan for Taiwan’s ProMOS Technologies Inc. a few years back.

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