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Memory Makers : Computers: Fountain Valley-based Kingston Technology's annual sales exceed $1 billion, but firm still retains small-company culture.


FOUNTAIN VALLEY — On the day that Kingston Technology Corp. first surpassed $1 billion in annual sales, the computer memory company's co-founder, David Sun, rewarded employees with generous bonuses and the most elaborately catered lunch many workers had seen.

But there was one thing Sun would not do for his workers, although dozens approached him after loading their plates with Chinese, Thai and Japanese cuisine during the lunch. Despite their pleas, Sun would not make a speech.

"You don't want to hear from me," he said. "Just enjoy your lunch."

A few days later, during an interview, Sun explained why.

"I was once chief engineer at a private company that went public," he said, referring to his stint at Alpha Micro Systems in Costa Mesa during the early 1980s. The day that company started selling stock, employees drank champagne while the chief executive delivered a speech.

Standing above the crowd, the executive said, "Well, I finally made it." Other workers applauded, but Sun seethed. "I thought, 'What about me?' " he said.

Sun and John Tu, who co-founded Kingston in 1987 and are still the company's sole owners, have gone to great lengths to make sure their employees, suppliers and customers never have to ask that question.

Sun spent most of the day last Tuesday--the day Kingston passed the sales milestone--strolling around the company's Fountain Valley plant, thanking employees one by one. The company also took out full-page newspaper ads that carried the names of all 450 of its workers, and gave employees bonuses ranging from $200 to $1,600.

Those were just extra goodies on top of the ongoing perks enjoyed by Kingston employees, who are paid wages well above industry average and get to split 5% of the company's profits every quarter. That usually means employees get bonuses of $1,000 or more every three months.

Of course, Sun and Tu haven't done badly either. Just days before their privately held company hit the billion-dollar mark, the founders were listed for the first time among the Forbes 400, the magazine's annual list of the nation's 400 wealthiest people. Their wealth was calculated at about $370 million apiece.

Sun and Tu, who met in Orange County in 1981, seem to complement one another. Tu, 54, born in Shanghai, is soft-spoken, thoughtful and gifted at marketing. Sun, 44, a boisterous and energetic native of Taiwan, handles the engineering.

They founded their first company, also a maker of memory components, in 1983, then sold the venture to AST Research Inc. in 1986 for a reported $6 million. But Tu and Sun lost their small fortunes from that sale in the 1987 stock crash.

They set out to rebuild. With just $4,000 in cash, they launched Kingston as the memory market was ready to explode. Sales soared from $13 million in 1988, their first full year, to $251 million in 1992, earning Kingston the No. 1 position on Inc. magazine's list of the fastest-growing private companies in America.

Sun says Kingston got there by stressing loyalty and flexibility. The company has never canceled an order for the raw materials it uses to make its memory products, and it routinely pays suppliers ahead of schedule.

Tu and Sun eschew fancy offices or job titles, and they encourage their employees to pitch in wherever they're needed, whether it's in sales, manufacturing or shipping. The company has no secretaries, and the two founders sit at desks in the center of the company's bustling sales floor.

"We can walk up to them any time and get an answer," said Rosanne Carrillo, a sales manager and one of the first employees hired by the company. "Sometimes there's a line of six people, but I never have a problem talking to them."

The founders move their desks around the room every so often to spend time next to different employees.


In the past, Sun fretted about whether Kingston could continue to treat workers like family as the company mushroomed in size. Employees once knew each other by name, but these days the company is so large that everybody--including Sun and Tu--wears identity badges, partly to make sure memory chip thieves don't wander in posing as assembly workers.

Sun acknowledges that some things have changed. Employees' roles are more defined. Still, he says he believes "we can grow to 1,000 employees," without losing the company's culture.

And more growth seems inevitable, given the business they're in.

In recent years, computer software has become increasingly complex, keeping in step with advances in computer hardware technology. Programs have grown not just in terms of the functions they perform, but also in sheer girth. And each new version of PC software requires more memory to make it run.

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