SMART opens plant in Puerto Rico, plans move to larger facilities in U.S., completes merger with Apex Data.

growth rate of the electronics industry, SMART Modular Technologies Inc. has expanded its manufacturing facilities with a new plant in Puerto Rico to supplement U.S. production, drawn up plans to move to larger headquarters facilities in January, and completed its merger with Apex Data Inc., a leader in PC card solutions.

The company has also established a new subsidiary in Australia.

This burst of expansion activity comes in response to a dramatic increase in demand for the company's products, largely as the result of qualifying its production facilities to supply modules and PC cards to several Fortune 100-size companies.

The new production capabilities in Puerto Rico will increase efficiency and allow SMART Modular Technologies to meet the needs of its new customers while developing and manufacturing a number of products that will open up new business opportunities in the United States and abroad, according to Ajay Shah, president. Company-wide employment is expected to increase by 20 percent by the end of 1995.

The company is a well-established major source of memory modules for OEMs and credit-card-size PC peripheral devices, such as fax-modems and memory expansion cards.

PC cards are used in virtually every laptop, notebook and pen-based computing system on the market today, and future systems will use multiple cards to empower them with the versatility and capabilities of larger systems.

There is also a fast-growing demand for PC cards tailored to hand-held data collection units, like those used by readers of gas and electric utility meters.

Puerto Rico Facility Up & Running with SIMMs, DIMMs

Production is now underway in the first phase of SMART's expansion into Puerto Rico. The initial facility is located in a 22,000 square-foot building, part of an industrial complex sponsored by the Puerto Rican government in Arecibo on the north coast of the island, midway between the capital of San Juan and Aguadilla. The company plans to quadruple the operation within 60 days.

Currently in production are 72-pin single in-line memory modules (SIMMs) and dual in-line memory modules (DIMMs). The facility produces 220,000 units per month. The company expects that this facility will have a capacity to manufacture one million units per month by the end of 1996.

Operation of the new facility is coordinated by Dominique Nguyen, director of manufacturing engineering for SMART Modular Technologies, from company headquarters in Fremont.

Explaining the company's reasons for opening a plant in Puerto Rico, Nguyen said that "with the new plant, it will be easier for SMART to service customers on the East Coast of the United States and address the company's rapidly expanding business in Europe.

"Access to transportation facilities is excellent, and shipping costs are lower. We are also better able to service the large electronic OEM companies already operating there," he said.

"The level of support from the government of Puerto Rico is excellent, as it is from non-governmental people involved in the electronics industry there," he said. "The technical competence of the labor pool is very high, and the people have an outstanding work ethic, but they resist commuting to work.

"They insist on working locally, near their homes. That is one reason we chose to locate in Arecibo. It is convenient for employees and near major transportation routes for shipping."

Merger with Apex Data Inc.

SMART Modular Technologies and Apex Data Inc. are now in the process of merging and integrating operations, sales and marketing. Apex Data will continue to operate in Pleasanton, Calif., under existing management.

The reason for the merger, according to Ajay Shah, is not just to improve the efficiency of both companies but mainly to take advantage of their complementary strengths.

SMART Modular Technologies is a recognized leader in module and PC card technology and production, and Apex Data is a leader in PC card sales and service through corporate and distribution channels.

SMART Modular Technologies and the TPSM Industry

"The entire TPSM industry was engendered by the PC market boom, which created an almost insatiable demand for memory modules," said Bill Johnston, director of OEM product marketing, commenting on the TPSM industry.

"That burst of growth never subsided for us, and with the advent of Windows 95, faster Pentium-class processors, higher-performing multimedia systems and sophisticated games, demand for memory modules is going through the roof," he said.

Greater operating system demands, more sophisticated applications and graphics are among the factors spurring increases in memory requirements.

Growth in the module market is also accelerated by rapid growth in demand for hardware, especially for desktop computers, mobile systems and embedded systems with PC architecture.

Memory modules continue to evolve to fulfill the memory requirements of both desktop and mobile computers. A new standard for small-outline 72-pin DIMMs addresses the memory requirements of mobile computers while accommodating space constraints.

Another new standard for 168-pin, 8-byte-wide DIMMs is especially suited for the growing base of 64-bit processors.

SMART Modular Technologies is one of the very few "Third-Party SIMM Manufacturers" (TPSMs) dedicated to serving the highly demanding needs of "Original Equipment Manufacturers" (OEMs).

From the company's very beginning, SMART has recognized that quality, reliability and testing to full data sheet specifications are critically important to major OEMs who need memory modules.

To meet the needs of OEMs, SMART supplies modules with extraordinarily high quality levels measured in parts per million (PPM). By comparison, most TPSMs servicing the PC aftermarket do very little testing and merely give a 24-hour replacement guarantee.

Failure rates could be 10 to 15 percent, and although end users would never know and not be adversely affected, Fortune 100 companies would not be able to tolerate such a low level of quality.

"Our main competitive weapon is our rapid responsiveness to changes in the market environment," Johnston said. "SMART Modular Technologies focuses closely on the needs of OEMs, providing them with engineering design services, custom and subcontract manufacturing and even support for obsolete part types.

"We test 100 percent of our products to full datasheet specifications before shipping, making SMART Modular Technologies one of the very few TPSMs in the world qualified to meet the needs of Fortune 100 OEMs," he said.

SMART Modular Technologies Turns "Green"

"SMART Modular Technologies has eliminated harmful chemicals from all manufacturing processes and has developed `green' products that reduce the consumption of electrical power," Shah said.

"Conservation of power is vital in computers, and we are doing our part by making modules as miserly with power as the art of technology will allow," he said.

Concerned about the effects of chemicals on the environment, the company eliminated all environmentally harmful chlorofluorocarbons (CFCs) from its manufacturing processes three years before the industry was required to do so.

The company installed a new, advanced aqueous-based system to clean all of the products it manufactures.

Semiconductor manufacturers and makers of printed circuit boards historically have relied on Freon and other CFCs to clean many types of components.

"Our company has installed a deionized water system that works just as well as Freon-based equipment and it has no negative impact on the environment, " Shah said.

The Company

SMART Modular Technologies designs and manufactures an extensive line of DRAM single in-line memory modules (SIMMs) and dual in-line memory modules (DIMMs), Flash SIMMs and Level-2 Cache Memory Modules as well as DRAM, Flash and Fax Modem PC cards.

One of the computer industry's largest producers of memory modules and PC cards, SMART designs and manufactures all of its products in company-owned facilities in Fremont, and Arecibo. Total monthly output of more than 300 types of memory modules and cards exceeds 700,000 units.

For more information about the company and its products, contact Bill Johnston, director of marketing, SMART Modular Technologies, 45531 Northport Loop West, Fremont, Calif. 94538; telephone: [phone], ext. 104; fax: [phone]. -0-

NOTE TO EDITORS: Editors may also contact Roy Twitty, Twitty-Connelly Communications at 415/591-7878, or by e-mail via Internet: [e-mail].

CONTACT: SMART Technologies Inc.

Bill Johnston, 510/623-1231, ext. 104

email: [e-mail]

or

Twitty-Connelly Communications

Roy Twitty, 415/591-7878

Internet: [e-mail].