It’s no secret that computer memory company Kingston Technology Corp. in Fountain Valley has long stood among Orange County’s largest private companies.
What might be surprising is that it’s now comfortably OC’s largest private company, based on the data used for this week’s Business Journal list, starting on page 23.
The news caught the Business Journal off guard; a year ago our data showed Kingston bringing in some $7.5 billion in revenue, about $3 billion below that of Newport Beach’s Pacific Life Insurance Co.
Kingston is now giving the world a fuller look at the company’s up-sized reach.
Co-founder and Chief Executive John Tu told London’s Financial Times late last year he expected the company’s revenue to approach $14 billion for 2019.
Actually, according to Kingston Public Relations Manager David Leong, the final number was $12.8 billion, but that’s still far higher than most prior estimates.
It’s also more than $500 million higher than the No. 2 company on this week’s list, PacLife.
Services Division
So what accounts for the revenue boost for the maker of well-known flash memory products, solid-state drives, and other computer-related items that bear the Kingston name?
In two words, it’s the “services division,” which includes the memory that Kingston makes on behalf of PC manufacturers. That business hasn’t been accounted for before publicly.
“That would include putting their name on the memory, perhaps packaging it for them and then also ensuring delivery to them when they need it,” Leong said of the services division customers. “When we’re making memory on behalf of a PC manufacturer, this is memory that’s going to go inside of a computer—laptop, desktop, server, whatever.”
“Part of that service agreement is yes, we manufacture it for them. But we also have to deliver it to them when they need it, so we don’t slow down their own production line,” Leong told the Business Journal on May 22.
Kingston’s services division also makes embedded memory products for smart thermostats, smart watches, fitness bracelets, Bluetooth speakers and robotic vacuums that are manufactured and sold by other companies, Leong said.
Opening Up
The Financial Times newspaper interview, which focused on Tu’s philanthropic efforts (an area the Business Journal expanded on in a May 25 feature, part of the paper’s OC 50 edition that highlighted Tu’s funding for upstart medical diagnostic company Fluxergy) apparently nudged the company in providing a somewhat fuller revenue picture.
“In the past what we’ve shared publicly—as you know we are a private company—we have only disclosed the revenue from the commercial business units that bear the actual Kingston brand name,” Leong said. “One of the things we did not disclose was our services division as that is under NDA (non-disclosure agreement).”
The company has not disclosed what PC makers it provides memory to for use under other manufacturers’ names.
Full Scope
“Since one of our founders has revealed a figure that includes the full scope of our business, we thought we’d go ahead and disclose the total revenue generated by Kingston in 2019 and this is what we will do moving forward,” he added.
Products bearing the familiar Kingston brand name include the ValueRAM line of memory and DataTraveler USB flash drives while its HyperX brand of high-end gaming equipment is well known among the video game community.
“Those are the things that customers who know us as,” according to Leong.
He said “our business is still growing” though he can’t provide any breakdown of how much the various parts of the company are making.
“Certain divisions within Kingston are growing, others are a little bit sluggish because it follows the economy and the consumer spending habits.”
The company’s HyperX business is among the numerous area gaming companies likely benefitting from stay-at-home orders.
Kingston has also likely gotten a boost as companies have bought laptops, storage and other computer equipment so that its worker base can work safely from home, as is the case at loanDepot, OC’s No. 16 private company (see story, page 1).
640 OC Workers
Tu and business partner David Sun started Kingston in 1987 after the financial crash of that year had wiped out their fortune from a prior business.
The firm currently employs some 640 people in Fountain Valley and 3,600 people worldwide,
The wealth of Chief Operating Officer Sun and Tu is estimated by the Business Journal each to be in the $4.8 billion range, and the Financial Times dubbed the Chinese-born Tu the “non-flashy tech billionaire.”
