Tech Company Shifts More Workers to Asia

Memory products maker Kingston Technology Co. is shifting more work to its year-old assembly plant in China, part of a quietly unfolding trend of Orange County memory products makers moving work to Asia.

The Shanghai plant has grown to 200 workers from 50 when it started a year ago. Some of the work now done in China used to be handled at the Fountain Valley headquarters.

Some workers impacted by the shift were absorbed into other areas of the company, said spokeswoman Heather Jardim. Specific numbers weren’t available.

China is particularly appealing to memory products makers since trade barriers came down after its admission to the World Trade Organization. The company makes 1 million memory boards a month in China, up from 50,000 a year ago. By year end, the Shanghai plant should be up to 2 million a month.

Kingston and other memory products makers buy chips from Asian suppliers and assemble them onto circuit boards. The segment is concentrated in Orange County, where memory products makers employ nearly 1,900 people and lease or own hundreds of thousands of square feet for plants and other operations.

So far, memory companies have kept most of their production in Orange County, largely because computer memory has been an expensive product until recent years. But now memory chip prices are at a low.

Memory board prices are closely tied to chip prices. So while local board makers are paying less for chips, computer makers and consumers are paying less for memory boards.

That’s squeezed profits at Kingston, Santa Ana’s SimpleTech Inc. and Rancho Santa Margarita-based Viking Interworks, part of Sanmina-SCI Corp.

Orange County Business Journal