Memory manufacturer Kingston Technology reported record sales late last month. But as the memory market evolves, there are signs that new competition could challenge the vendor’s dominance of this market.

Kingston’s total global memory sales for 2007 reached a record $4.5bn (£2.3bn) ­ $800m up on the previous year. The increase was largely accredited to its thriving flash memory business, a division Kingston created in 2003.

Kingston has grown from a startup with a single memory module in 1987, to a global manufacturer with more than 2,000 memory products shipping to over 100 countries and employing more than 4,000 people worldwide.

“When David Sun and I started the company in 1987, we never dreamed that this level of success was possible,” said John Tu, co-founder of Kingston. “Reaching $4.5bn is a remarkable achievement in the history of our company.”

Another source of growth has been its innovation in the PC business, thanks to its ValueRAM industry-standard memory, HyperX memory for gamers and PC enthusiasts and a phenomenal jump in its Branded memory in 2007. In March, it released a family of 800MHz DDR2 fully buffered dual-inline memory modules (FB-DIMMs) designed for systems using Intel’s Seaburg S5400 chipset.

Kingston first reached the $1bn mark in global sales in 1995, surpassing that figure with $2bn in 2004 and again with $3bn in 2005.

However, there are signs that the company might not have everything its own way as the flash memory market is increasingly competitive. As reseller margins on hardware become thinner, partners are looking for vendors that can help them add value, according to some channel partners.

Simms International, Kingston’s top distributor in the UK, is already showing signs of diversification. In March, it signed a distribution agreement with Patriot, a US-based DRam manufacturer offering a full range of memory options, including overclocking, for gamers and professionals who need high-performance PCs.

In the same month it also secured a deal with flash memory application maker IronKey, which over secures USB pen-drive applications.

“There are loads of creative options for adding value to flash memory, such as pre-installed content, applications or playable games,” explained Simon Worsley, product manager for Simms.