Irvine Firm Plans PC-Making Venture in China

Helionetics Inc., a small Irvine defense electronics company, and a Chinese computer maker are expected to sign a joint venture agreement today to manufacture high-powered personal computers known as workstations in China.

The Shenyang Shenlong Computer Systems Co. will be 50% owned by Helionetics and 50% owned by North Computer Applications and Development Corp. in the northeastern Chinese city of Shenyang.

The expected announcement of the new venture comes in the wake of NASDAQ’s decision Friday to suspend trading in Helionetics’ stock because of unusually high volume. The stock rose $1--or 25%--to $5 asked.

A Helionetics subsidiary in Irvine, Definicon International Corp., will provide computer circuit boards for the venture, while NCAD will supply software technology, engineers and manufacturing personnel, said E. Maxwell Malone, president and chief operating officer of Helionetics.

The venture, which must be approved by the U.S. Commerce Department, will be Helionetics’ entry into the computer workstation business, Malone added. It is a manufacturer of power-conversion systems for the military.

Dan Heyler, an analyst at Dataquest Inc., a San Jose market research firm, believes that the deal will mark “the first time that a PC of this power will be manufactured in China.”

Heyler said the Chinese could use high-powered workstations for such purposes as designing products or running factories. He said it would be the first time that “a technology of this level has been requested for Commerce Department approval.”

Helionetics and NCAD each will supply half of the venture’s $1 million in start-up costs. The company hopes to bring its first product to market by early 1991.

In addition to selling the computers in China, it wants to export them to Europe, the United States and elsewhere.

Vincent Williams, Definicon’s founder and chief executive of Helionetics, was named chairman of the joint venture.

“After two years of research for a suitable technology partner, we are very pleased to realize that vision in Definicon,” said Mu Rui-Lin, NCAD’s general manager.

“We expect such a combination will produce a very powerful computer system for the Chinese and world market,” he added.

NCAD, which manufactures less-powerful personal computers, is also a distributor and service representative for U.S. computer makers such as International Business Machines, Digital Equipment Corp. and AT&T.;

Helionetics, which was purchased out of bankruptcy in early 1989 by Bernard Katz, has had a past marked by controversy, management turnover and financial problems. Katz owns or controls a majority interest in Helionetics and is chairman of its Definicon subsidiary.

PCs developed in the venture will be based on Sun Microsystems’ SPARC technology, an advanced chip technology that makes it easier and cheaper to manufacture microprocessors. The computers will be able to run DOS and Unix operating systems, two widely used central software programs.

China has about 400,000 PCs, primarily in government and educational institutions.