Armed robbers took at least $5 million in computer chips and memory boards in a daring heist at an Irvine electronics distributor, the latest and largest in a series of thefts prompted by the soaring value of high-tech parts.

As many as 13 well-dressed men entered the offices of Centon Electronics Inc. at about 8:30 p.m. Tuesday, holding three employees at gunpoint while loading thousands of computer chips into a van, Irvine police said.

The components were mostly computer memory chips, including chips that had been assembled into modules. The value of the stolen chips could be as high as $12 million, said police, who are awaiting the results of a company inventory.

Even the $5-million estimate is believed to be the largest in U.S. history for an armed theft of computer chips, according to the FBI.


Computer chip theft has become a lucrative racket in recent years. The components’ small size and high value, a general lack of security at the small companies that handle them, and a substantial market for resale is luring well-organized bands of outlaws.

“They’re a lot easier to dispose of than dope, and they’re not traceable,” said Julius Finkelstein, a deputy district attorney in the high-tech-crimes unit of the Santa Clara County district attorney’s office, which handles a large number of such cases.

“It’s state-of-the-art stuff, it doesn’t weigh anything, and it’s easy enough to find a buyer,” Finkelstein said. “You’ve got a short supply and high demand--the math is easy to figure out.”

Until recently, the primary target of chip thieves were microprocessor chips such as the Intel 486, which form the brains of a personal computer. A top-of-the-line microprocessor barely larger then a thumbnail can be worth as much as $1,000.


But in 1993, Intel Corp. began putting serial numbers on its microprocessor chips, making them much more difficult to resell. And large caches of microprocessors are generally handled by large companies with security procedures in place, rather than by small distributors.

Thus recent heists have concentrated on memory chips, which at $10 or $20 apiece are not valuable enough--and sometimes too small--to stamp with individual serial numbers. And memory chips have grown more expensive as demand has soared: Many personal computers are now sold with 8 megabytes of memory, twice as much as was common a year ago.

At the same time, a rising Japanese yen is raising the cost of products made by Japanese producers such as Toshiba Corp. and Hitachi. Worldwide sales of memory chips are expected to hit $51 billion this year, up about 60% from the year before.

Until now, the main victims of chip thieves have been Silicon Valley companies, which have reported 45 thefts since January.


In one robbery in late 1993, gunmen broke into a north San Jose electronics firm, shot a supervisor in the hip and kicked out the teeth of another. Several months later, thieves made off with more than $1.8 million worth of merchandise, including memory chips, from a Fremont warehouse.

Memory chip manufacturers, mainly large multinationals in Japan, South Korea and the United States, generally have long-term contracts to provide a minimum supply to large computer makers such as Compaq and AST Research. But when computer firms run short, they often buy their chips from distributors that purchase the factories’ excess inventory. And small PC manufacturers, repair shops and small retailers are often completely dependent on distributors.

In turn, these distributors often operate on a no-questions-asked basis, observers say.

“You’re talking about an industry where you can carry $100,000 worth of chips in a briefcase and your buyers will meet you on any back street,” said Mel Thomsen, a principal at Pathfinder Research Inc., a market research company in San Jose.


“If a lot of companies are secretive about where they get their parts, one of the reasons is what happened in Irvine,” he said.

Centon had sales of $144 million last year and will probably grow to twice that by the end of this year, industry analysts and competitors said. The privately held company listed 180 employees in a 1994 filing with Dun & Bradstreet Corp.

Centon executives declined to comment Wednesday.

The company is one of several that has made Orange County a distribution and manufacturing center for computer memory products. Other large firms include Viking Components Inc. in Laguna Hills, which makes memory upgrade components for personal computers, and Kingston Technology Corp. in Fountain Valley.