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Legend more than just a distant memory

Legend more than just a distant memory

Australian memory manufacturer Legend Performance Technology has big plans, despite operating in an internationally competitive industry on the brink of crisis and requiring constant investment.

As one of Australia's only IT memory engineering companies, Legend has weathered the memory storm that has seen many of its competitors go under, sustaining 18 per cent growth since its move from software development in 1993.

In fact the manufacturer, with offices already in Auckland, Johannesburg, two in Slovakia, one in Poland and one in Vienna, will set up another office in South Africa "imminently", with discussions also underway with venture partners in Europe, according to Bradley Dowe, senior manager for Legend Australasia.

With this infrastructure in place, Dowe expects Legend to increase its exports from current figures of 16 to about 25 per cent next year.

Plans are also being developed for another manufacturing plant to be built offshore, complementing the existing plant in Adelaide.

"There's no point building another plant in Australia. The Adelaide plant can produce $62 million worth of product a year so we have more capacity than we can sell," Dowe said.

Legend's boosted capabilities will be used to execute its existing preferred supplier contracts with Acer and NEC, as well as three other companies Dowe was not willing to name.

"We're negotiating with three other majors for preferred supplier contracts," he said.

These successes come despite Dowe's assertion that memory shortages have only just begun. "In the medium future there will not be enough memory to go around," claimed Dowe, who believes the culprits for the situation are the small group of memory manufacturers who "want to see the price rise".

Naming Micron, Hyundai, Samsung and Siemens as the controlling group, Dowe is quick to point out that Legend is "the only company we know that has direct-selling relationships with all four manufacturers".

However, Legend will not be able to entirely escape the ramifications of worldwide memory shortages, with Dowe claiming it is in such times of crisis that piracy runs most rampant.

"When a snap shortage occurs all the re-marked brands pop out. Suddenly your getting Hyundai products spelt with a Q and LG chips, even though LG hasn't made chips for ages."

The solution is simple - invest in certification and accreditation. "We spent a great deal of money and took a lot of risk to enter the memory market. So we need to maintain that investment," explained Dowe, who believes the ongoing accreditation process counters one of the more serious problems the Australian memory market faces - "pre-packaged memory of dubious origins".

The shortage of memory will also have the effect of consolidating some of the markets Legend operates in, most noticeably the small and medium business sectors, which are also subject to GST pressures.

Alternatively, what Dowe coins the multinational corporation segment will win more market share and Legend's "Big Aussie" classification will grow in size. "There will be a general move towards established players in the marketplace. That will make for a slightly smaller customer list, but they will generate more volume."

The future also holds the spectre of e-commerce and the changes this will bring to the memory market. According to Dowe, manufacturers will have to operate in an environment characterised by decreasing infrastructure costs and aggressively priced products with all new Internet features.

The combination of price and performance, which might seem like an obvious one, is actually a differentiating factor, according to Dowe. "At one end of the scale companies focus on price points. At the other end, companies like Kingston focus on quality without worrying about price. We take both into account."

Dowe believes Legend's current position in the memory market will be a foothold into the future, with the company finally recognising the value of marketing combined with good product and services.

"We have been in the closet for too long. This is actually the first year we've spent any money on advertising. So we're going to introduce ourselves to the market through things like incen-tive programs and the hiring of new marketing staff."www.legend.com.auFast factsLegend Performance TechnologyWholly Australian-owned designer, manufacturer and exporter of memoryEstablished in 1989 as a software and PC assemblerMoved into memory manufacturing in 1993Head office in AdelaideAdditional local offices in Perth, Melbourne and BrisbaneHas 46 Australian staffAlso manufactures video accelerators and system mainboards


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