High School Chums, Chip Makers Go for Merger : Technology: The two friends decide to combine their surging companies--Advantage Memory and Memory International.
High school chums John Harriman and Dave Reed have been working side by side for seven years, guiding two soaring computer memory chip manufacturers.
In three years, revenue at one of their firms, Advantage Memory Corp., has shot from $600,000 to $27 million. At their neighboring Memory International Inc., revenue surged 15-fold from $1.5 million to $23 million in the same period.
On Friday, the 31-year-old friends and business executives announced that they have merged the two companies, separated only by a glass partition in an Irvine technology park, into one manufacturer with annual revenue of $70 million.
The pair decided the move was a natural because they already agree on everything from business strategy to personal values. “I think we know each other better than our wives know us,” said Reed, chief executive of Advantage Memory. Reed and Harriman own homes in San Clemente and have children in the same preschool. They even were married in the same month.
The entrepreneurs plan to expand the company by November, adding 15 employees to the current work force of 50. The new company will operate under the name Advantage Memory, but keep the Memory International logo. Reed will be chief executive, and Harriman will be president.
It’s been a meteoric rise for the Mission Viejo High School graduates. In 1986, Harriman was opening doors at the Ritz-Carlton Hotel in Laguna Niguel and Reed was delivering parts for an Irvine auto dealer.
Even with the merger, Advantage is still a relatively small player in the rapidly growing computer chip business.
Fountain Valley-based Kingston Technology Corp., for example, posted revenue of $800 million last year and the 400-employee company expects to revenue to surpass $1.3 billion this year, said Kingston spokeswoman, Peggy Kelly. She says the company sells to major corporations, while smaller manufacturers, such as Advantage Memory, tend to sell computer memory chips to retailers.
Retail and corporate memory needs have both surged in the past few years because computer programs have become more complex, Harriman said. Programs such as the hot-selling Windows 95, introduced in August, are creating incredible demand for memory in both the corporate and consumer markets Harriman said.
Advantage Memory Corp. and Memory International Inc. have both recorded 25% growth in revenue in the past three months alone, but their young owners say they are just getting started. The pair’s goal for the merged Advantage Memory is to reach annual sales of $250 million by 1998.