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Reports: Kingston Takes Bigger Stake in Taiwan Supplier

Fountain Valley-based Kingston Technology Inc. has boosted its ownership stake in a Taiwanese storage device maker.

Kingston purchased some 274 million shares of Rexchip Electronics Corp. from Powertech Technology Corp. for an estimated $128 million, according to Powertech and various Chinese media reports.

Taiwan-based Rexchip makes DRAM chips, the most common type of memory used in computers and Kingston’s biggest source of revenue.

Rexchip saw revenue of about $992 million in 2011, according to its website.

The DRAM market is hotly contested and amid stiff competition that has seen prices drop in the last several years.

The buy could position Kingston with a steady supply of DRAM chips in the years to come.

Media reports peg Kingston as Rexchip’s largest shareholder, although its total stake is unknown.

Kingston, the top memory products maker for computers and consumer electronics, declined comment on reports of the deal.

Kingston posted a record $6.5 billion in sales in 2010, a jump of $2.4 billion from the prior year.

The company did not disclose 2011 revenue.

A Business Journal estimate pegged sales last year at roughly $5.8 billion as the company entered 2011 with a warning that it was “extremely unlikely to meet the same sort of revenue” as the prior year.

The decline stems from an apparent cooling of demand in the market for third-party DRAM—Kingston’s specialty in that segment—that was offset in part by signs of strength in its smaller line of flash memory products.

Its record year in 1010 was fueled by a 54% global increase in sales of DRAM products.

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