DRAMeXchange : Weekly Research : 【Exclusive Interview】

【Exclusive Interview】Hwa Ling Technology : A Newcomer in Memory Industry with Its Own Brand

Published 2008-12-08 (GMT+8)

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In the ever-changing global memory market, stories about manufacturers who compete with own-brand products are especially valuable. One good example is Hwa Ling Technology, a Taiwan memory module and flash card maker, and the company’s general manager, Helen Lee, recently shared Hwa Ling’s experience in own-brand management with DRAMeXchange.

A Sweet-And-Bitter Year as Own-Brand Manufacturer

Lee said since Hwa-Ling started as an OEM maker, past experience showed that the company’s operations were always subject to clients’ demands, in terms of both prices and orders. OEM manufacturing not only failed to boost the company’s revenues but also diminished its long-term competitiveness, and that’s exactly why Hwa Ling decided in mid-2007 to transform itself as an own-brand maker, she added.

When asked about Hwa Ling’s marketing strategies for own-brand products, Lee indicated that the company has focused on helping local distributors organize marketing events, which include DRAM/Flash product packaging, shop interior designs and display, etc, and when the marketing channels are thus established, Hwa Ling can charge higher for its products and the distributors will also benefit with simultaneous growth. If certain marketing strategies prove successful in one country, the methods will be duplicated in other countries and areas. With such strategies, Hwa Ling will keep promoting its own brand and find its feet in the global market, said Lee.

On Inventory Management

Lee pointed out that DRAM prices often experience wild fluctuations in very short time, which in turn can cause huge losses for manufacturers. As most competitors adopt the conventional manufacturing procedure of “material preparation, production and inventory,” Hwa Ling has developed a new method for faster delivery. The company would first put the MAGIRAM logo on its own-brand products, she added, so any orders will be delivered in half a day to achieve the zero-inventory goal.

Sticking to Own-Brand Strategy

Lee said even though it is hard for Hwa Ling to develop its own brand, the company will stick to this strategy in the future. Own-brand products now contribute a mere 20% to overall revenues, but prospects for growth look good, as the market share of the company’s own-brand products is expected to see compound annual growth rate of 30%. Hwa Ling is optimistic about such operation model and will stick to the strategy, according to Lee.

As for the year 2009, Lee said even though the DRAM market is being hard-hit by gloomy outlook for global economy, Hwa Ling remains positive towards the market’s prospects. The company will carry on with its operation model of offsetting smaller profit margins by selling in larger quantities, in the hope that this will benefit its clients at the same time, she continued.

A DRAM Alliance Proposed

Lee went on to urge DRAM makers to unite, and set up an industry alliance like the oil industry’s Organization of the Petroleum Exporting Countries (OPEC). Such alliance can help fend off price-cut requests from malicious clients and save members a lot of time for individual price negotiations. On a long-term basis, it will also prevent a vicious circle among DRAM makers and their clients, which eventually will lead to a healthier DRAM market and industry chain, Lee concluded.

About DRAMeXchange

DRAMeXchange is a global primary provider of future intelligences, in-depth analysis reports and advisory services on DRAM and Flash memory industry with coverage including current business, spot trading prices, and market trends, capital spending and wafer capacity trends, the impact of DRAM/flash memory products on the market, and other relevant PC industry information.

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