Count another holding in China for John Tu and David Sun, founders of Fountain Valley-based memory products maker Kingston Technology Co.
Tu and Sun and Payton Technology Co., a Fountain Valley-based Kingston offshoot, have bought out their partner in a chip testing and packing operation in southern China.
They paid $40 million to Chinese computer maker Great Wall Technology Co. for its 40% stake in Shenzhen Payton Technology Co., according to a filing with the Hong Kong stock exchange.
Tu, Kingston’s president, and Sun, chief operating officer, weren’t available for comment last week.
Tu and Sun formed Shenzhen Payton Technology last year with Shenzhen Kaifa Technology Co., a Great Wall unit.
Chinese regulations require outside companies to have a local partner before setting up operations. Kingston also worked with Great Wall to set up a Shanghai plant. Last year, Sun and Tu paid $4 million to buy out Great Wall’s 20% stake in that operation.
The Shenzhen Payton buyout adds to Kingston’s holdings in China.
The company is finishing a 260,000-square-foot plant in Shanghai’s Pudong Silicon Harbor, which is set to open later this year.
Kingston also has plants in Malaysia and Taiwan.
The company buys memory chips, mostly from Asian suppliers, and assembles them onto circuit boards that go into computers, consumer electronics and networking devices.
Kingston’s current Shanghai plant ships within China and to Europe. The new facility is set to do the same. The plant at Kingston’s Fountain Valley headquarters ships to computer makers and other customers in the Americas.
The Taiwan plant ships to domestic customers and others in Japan, South Korea, Southeast Asia and Australia.
Kingston’s business has been booming. The company, owned by Sun and Tu, recently said its 2004 sales grew 38% from a year earlier to $2.45 billion.
The figure is the highest annual revenue mark for the company since its founding in 1987, Kingston said.
The company said revenue grew in part because of the overall rebound in the technology sector. Kingston sells memory modules to some of the biggest computer makers.
Kingston said it also benefited from sales of memory products for consumer electronics such as digital cameras.
