Memory Corp continues comeback route

Memory Corporation coined the really neat idea of repairing and selling damaged DRAM chips, but new prices plummeted and the bottom fell out of Memory’s market. The Scottish company could have been history, but it had a makeover and looks to be staging a stylish comeback. CEO David Savage said earlier this year that Memory would post an operating profit for the first time in three years, and while Friday’s third quarter results were written in red, a £710,000 loss versus £1.2 million last year, gross profit was £800,000. Turnover grew from £10.2 million to £11.4 million, higher than the £10.2 million reported for the first six months of 1998, and Savage said the company is seeing significant progress on all fronts. He expects to report a breakeven profit in the fourth quarter, and the outlook for 1999 is encouraging. “We’ve won’t make number forecasts but we are confident of breaking even,” he said, and the one-time DRAM repairer remains committed to an EASDAQ listing this autumn. It’s not so long ago that Memory went to market for fresh working capital, raising £4.5 million through a rather controversial rights issue to fund product development and make the transition to an intellectual property company. Alongside that diversification, and core to its high expectations, is the performance of Dtec Memory Corp, a 51% joint venture formed with Datrontech Plc. The integration of Memory Plus and Datrontech Hong Kong in July is now complete, and the subsidiary is performing well ahead of expectations. “Established in February it’s been in profit ever since,” said Savage. Memory has new licence agreements with Toshiba, Taiwan’s Vincon and Modern Media Memory, and new product developments are picking up speed with release of the V6 Synchronous VCM ASIC and FLASH card controllers. Savage expects DRAM prices to pick up sometime in 1999, and he backs Rambus as the next generation technology that will shape the industry. He said: “We’re committed to it but life will become more difficult for smaller and niche companies because of the high investment and the need for critical mass.” ®