MILPITAS — A Silicon Valley tech company has encountered robust growth and seeks to hire workers as well as expand its facilities — partly by harvesting profits through the manufacturing of computers in the Bay Area.
SMART Global Holdings expects to hire scores of workers during the next year or so and is adding space at one or more of its Bay Area sites, the company said.
Milpitas-based SMART Global Holdings, or SGH, makes products, software and services for the computer, memory and light-emitting diode, or LED markets.
Some observers might well question the feasibility — or even the sanity — of attempting to make computer products in Silicon Valley, which is dogged by rising costs of doing business, including manufacturing.
SGH, however, is competing in a sector of the computer market that lends itself to low-volume and high-profit manufacturing: the production of high-performance computers that can be custom-tailored to the unique demands of a customer.
“We are not a high-volume shop,” said Mark Adams, chief executive officer and president with SGH. “We focus on specialty computers. We are a low-volume and high-performance shop.”
The company’s approach has helped SGH to harvest profits and generate rising revenue.
“SGH has been in transition over the past year, reorganizing existing businesses and integrating new ones,” according to an analysis by Marketbeat, which provides research into stocks and investment trends.
The traditional approach for SGH typically was to focus on the market for memory computer chips. Lately, though, SGH has marched into new sectors.
“The company has been in a transformation the last few years,” Adams said. “We are diversifying into new markets beyond memory. The results are promising.”
Over the one-year period that ended in May, SGH earned $67.3 million on revenue of $1.85 billion, according to the Yahoo Finance site. During the 2021 fiscal year that ended in August of last year, SGH earned $21.3 million on revenue of $1.5 billion.
SGH is a “well-positioned player in the tech and digital components industry,” the Marketbeat analysis states.
The company’s success in its evolution has enabled it to add employees as well as expand its facilities.
“We are going to be expanding our operations and capacity out of our Fremont facility that manufactures high-performance computers,” Adams said. “Fremont is where our primary expansion of space is going to occur.”
Over the next 12 to 18 months, the company anticipates that it will increase its headcount by 100 to 150 workers, according to Adams.
The company’s Bay Area facilities consist of the SGH headquarters in Milpitas as well as manufacturing centers in Fremont and Newark.
SGH believes that its original expertise in the semiconductor memory business provided a natural bridge to its new endeavors in high-performance computing.
“The relationship between computers and memory chips is interchangeable,” Adams said. “You can’t have computing without memory and you can’t have memory without computing. It was a natural expansion of our business to go into computing.”
The SGH computer products are being provided to an array of sectors, according to Adams.
“There are large companies in the oil and gas industries as well as financial institutions, large companies that have large data centers and cloud facilities that would use our high-performance computing systems,” Adams said. “Each high-performance computer design is uniquely engineered for a specific customer’s environment and needs.”
SGH believes that the boom and bust nature of the low-margin memory chips industry provided a big incentive to seek more promising fields to explore. In this case, it’s the high-performance computing business.
“It’s a long journey to continue to grow and expand this company,” Adams said. “We are two years into this transformation. We are very much thinking of a long-term development plan for this company.”