Snapping back from a year most memory makers would rather forget, Viking Components Inc. is enjoying a market turnaround as it gears up to hire 180 people and expand into a leased overflow facility near its Rancho Santa Margarita headquarters.
The company, which employs about 480 now, has 59 open positions and plans to add about 120 more in the next year to keep up with growing demand for memory components, a segment that appears to be enjoying a full-fledged resurgence after several years of surplus and subsequent price nosedives.
“If you had asked us six months ago whether we’d have even 60 positions open, we probably would have said no,” said Kerri Brechbiel, Viking’s human resources manager. “It’s been a fantastic ride.”
Viking has manufacturing facilities in Orange County and Dublin, Ireland, though most of the new hiring will take place locally and span departments from engineering to sales to marketing. Many of the new workers will use a 23,000-square-foot center leased to supplement Viking’s main 130,000-square-foot Orange County facility. Brechbiel said officials may have to find additional space next year if current growth projections hold up.
The 12-year-old privately held memory and peripheral manufacturer hired about 100 people last year and revamped its manufacturing process to boost capacity while creating more flexibility to accommodate changes in the product mix and customer requests.
For its newest hiring spree, the company is primarily seeking out electrical engineers, designers, manufacturing support workers and field application staff.
New Markets
Officials credit much of the growth to Viking’s expansion into the original equipment manufacturing arena, which includes memory fabricated specifically for third-party companies that embed the components into a variety of products.
Viking traditionally has focused on branded, off-the-shelf components purchased by resellers. But in recent months it has reached out more deliberately to OEM customers, which require more specialized manufacturing processes but offer higher margins. Viking doubled its OEM revenue last year.
Due to contract restrictions, officials say, they can’t release customer names,but privately, they list some of the biggest players in the industry.
The burgeoning market for computer networking and telecommunications products is becoming a fast-growing component of the company’s memory sales mix. Flash memory is beginning to replace the specialized hard drives traditionally used to store data on hardware such as routers, a result of equipment makers’ relentless drive to make the devices smaller and faster.
Of course, the memory segment remains beholden to PC sales for the bulk of its revenue, and observers expect modest growth in that market. In addition, a host of new electronic gizmos from digital cameras to MP3 music players, all of which use semi-permanent flash memory for storage, could increase demand further.
Viking, meanwhile, has embraced the so-called “white box” market, non-branded computer systems put together by computer integrators and other service providers. Though prices for white box components are generally lower than the same off-the-shelf components supplied to resellers,and just as expensive to manufacture,Viking offers less technical support and customer service for the units, cutting overall cost.
The company has even jumped into the broadband communications market with a line of digital subscriber line modems it introduced last year.
Future Projections
Grant Johnson, an industry researcher for Scottsdale, Ariz.-based Cahner’s In-Stat Group, said the consolidation forced by the memory industry’s recent troubles has helped stabilize prices for everyone else.
“It’s still a little spotty, and we’re still seeing some of the effects of overcapacity,” he said. “We still haven’t quite found equilibrium. But we’re through the rut, and you’re going to see more solid (average selling prices) this year, and the segment will improve.”
Executives at Kingston Technologies, Viking’s Fountain Valley rival, also expect the market to flourish this year.
According to In-Stat, flash memory alone will experience 25.7% dollar growth and 19.6% unit growth this year. Flash memory shipments topped $3 billion last year. And in some instances, prices have increased, a red-letter event in the technology industry.
Jay Helmer, Viking’s top recruiter, said it won’t be easy finding, let alone integrating, that many people so quickly. But faced with snowballing demand, he added, the company has little choice.
“It’s a good problem to have,” he said. “And if you know anybody who’s looking for a job, send them my way.” n
