We talked to David Sun from Kingston Technology this morning - he's one of the co-founders and had plenty to say about the state of the market right now.
While the price of DRAM continues to rise, vendors are bundling less memory with their units and that's all good for Kingston Technology and certainly Sun looked as happy as he did when we last met him in 1996 at Comdex after he and and his partner John Tu sold the company to Softbank for $1.5 billion.
Softbank also bought Comdex....
Subsequently Softbank sold the memory biz back to the two founders for quite a bit less than it had paid for it in the first place. Softbank, he said, was prepared to pay over $3 billion and he and Tu talked the price down. On December 14th 1996, they allocated $100 million for employee bonuses from the acquisition.
Just three years later, sun and Tu bought back 80 percent of Kingston from Softbank for $450 million.
Sun said: "The DRAM industry will be very good" over the next few years. Nor does he think that the lack of capacity in fabs will fundamentally affect his business. While he described the semiconductor industry as "conservative" and that the after-shocks from the credit crunch continue to have an impact, he also believes that the companies that make the chips will be able to shrink the process and keep capacity up.
Nevertheless, he said, Japanese company Elpida, which has three fabs, only devotes one of them to DRAM production - the others are used to produce chips for the mobile and video markets.
He also said there is considerable movement in the server market. "The biggest growth this year is in server memory. The units shipments to May equal the total of last year."
Kingston Technology is a private company and had revenues of $4.1 billion in 2009. It's listed by Forbes as the 97th largest American private companies. Its products are distributed in 110 countries and has about 4,000 employees across the world.
It's focused on memory products and cards, and 50 percent of its volume is Flash, 23 percent DRAM, and 27 percent to original equipment manufacturers (OEMs) - those include Dell, and no doubt the rest.
According to market research company iSuppli, Kingston holds a staggering 40 percent market share of third party module revenues - in 2009 it generated just slightly over $1 billion in DRAM sales - the number two player, A-Data managed $164 million, followed by Ramaxei, Smart Modular Technologies, Crucial and Transcend.
It's also dominant in the USB drive business, generating $760,820 in rvenue in 2009, according to Gartner. Number two is Sandiks and number three is A-Data. It's not ahead of the pack in Flash Card marketshare, however - it holds number three position with Sandisk leading, and Toshiba number two.
With Elpida, Powertech and Advantest, Kingston is a shareholder in Teraprobe, a wafer testing company and the largest such in the world.
Sun believes that Kingston can't really lose. If memory is cheap, the company buys it and holds it until the market recovers. He's no plans to expand the 4,000 employees he has, he says Kingston will expand its product line, not his people count. And he says it's a happy company where prosperity is shaped out. "I don't want to deal with people jumping out of the building," he said.
In fact, Kingston came from nowhere when he and Tu designed the first single in line memory module.
He said: "It [memory] is a money tree. If I shake the tree, money falls."