Articles
High-tech hero -
By Matt Miller, San Diego Untion Tribune
Daniel Chang is something of a hero among America's more recent Chinese immigrants.
 The Rancho Santa Fe resident's life story has been profiled in various Chinese-language publications --how he arrived in California from southern China 15 years ago with only $300 in his pocket and memories of the devastating Cultural Revolution fresh in his mind.
Chang owns and heads AEM Inc., a Sorrento Mesa-based company that manufactures and sells more than $10 million worth of electronic components and high-tech materials each year.
AEM's client list includes some of the biggest names in electronics and aerospace: TRW, Lockheed Martin, Hewlett-Packard. The privately held company made the Inc. 500 list of fastest-growing American companies in 1994 and 1995. AEM now employs 92 individuals, 40 of whom are engineers.
"Daniel's a very impressive guy," said Thomas Chang, San Diego branch manager for General Bank, a Los Angeles-based Chinese-American financial institution. (The Changs aren't related.)
Daniel Chang's reputation as a successful player in America's technology sweepstakes has filtered back to his homeland. He now advises one of Guangdong province's biggest conglomerates. The Taiwan government is trying to persuade him to start a manufacturing operation there as well.
"We want very much for Mr. Chang to come," said Wayne Wu, director of the Taiwan government's commercial office in Los Angeles, who had journeyed to AEM one morning to sell investment opportunities in his country.
 What makes Chang's accomplishments all the more noteworthy is that the ceramic engineer is only 43 and a child of the Cultural Revolution. This was a generation that lost years of education and endured wholesale displacement in the decade beginning in 1966.
Chang's father - an outspoken journalist - was imprisoned four years, and the rest of the family spread throughout China. Chang believes that tumult helps account for his unrelenting drive to succeed.
"I would like to catch up for the years I lost,' he said.
His saga also illustrates the advantages of a trans-Pacific orientation.
Chang has used his background in China not only to grab business opportunities, but also critically needed personnel in a specialized technologies where American trained experts are in short supply.
X.M. Li, AEM's chief technical officer, was teaching at Hong Kong's Scientific and Technology University. Ken Kuang, one of the company's research engineers, came to San Diego from Beijing's Academy of Sciences.
Employees from 15 countries are on the company's payroll. At AEM's headquarters, conversations take place in English, Cantonese and Mandarin. Chang effortlessly takes part in all three.
Chang was among the early batches of young Chinese scholars to come to the United States after the two countries reestablished diplomatic relations in 1979.
He arrived in Los Angeles in 1981, armed with a master's degree in ceramic engineering and a student visa, but almost no money. He went to work as a busboy in an exclusive Beverly Hills restaurant; he lasted two days. He was a night manager in a motel. He fixed and maintained houses.
"It was a very early experience in American entrepreneurial business," he said, chuckling.
Chang got a second master's degree from USC, but never finished his doctoral studies. In 1984, he joined a Los Angeles-based division. of Philips Electronics as a research engineer.
A year later, he moved to San Diego.
As Chang relates the story, industrial ceramics manufacturer Kyocera Corp. - whose American operations are based in San Diego - had called him daily with job offers. "They made me nervous, so I joined them."
That association lasted for almost three years. But even as Chang gained more responsibility for product development, he grew increasingly frustrated with life at a large corporation.
"Bureaucracy and politics would always get in the way,' he said. Plus: 'I felt I didn't have enough to do."
In early 1988, Chang quit. With $30,000 in savings, he started American Electronic Materials Inc. as a consulting company.
"We needed to do something that was technologically intensive instead of capital intensive," he said, explaining his business strategy for a high-tech start-up.
He had little choice. Money was in short supply. On three separate occasions over the first couple of years, Chang said, he thought his company would fail. At one point, he was down to his last $200.
He was completely dependent on his wife, Caili, for income. (A former sales manager for Kraft Foods, she now occupies the office next to her husband.)
"The worst mistake I made was underestimating the risks before I got into it," he reflected, but then immediately added that it also was the best decision he made. "If I realized I needed to invest half a million dollars, I would have stayed at' Kyocera.
Chang approached more than 100 venture capitalists for funding; all turned him down. That turned out to be a blessing in disguise, he now thinks. His company remains completely self-funded and Chang has rejected several recent offers to buy into the company.
Chang initially focused on formulating some of the raw materials used in electronics manufacturing. His first break came in 1989, when Chang's former colleagues at Philips tapped the young company for a $500,000 order to make precious metal paste, used in the manufacturing of electronic components.
The company still cooks up batches of the formula, which Chang calls "electronic Coca-Cola." But now, it's only one part of an integrated operation.
Next door to the metallurgy department at AEM's Sorrento Mesa headquarters, Bruce Hess is measuring a piece of machinery the company is producing for a China-based client. AEM designs and manufactures more than a dozen varieties of this specialized processing equipment, which can cost as much as $300,000 each.
In the company's nearby Sorrento Valley manufacturing plant, technicians produce rolls and rolls of inductors. These components are used to reduce noise in computers and telecommunications equipment. Each is about the size of one letter on this page.
AEM's edge, Chang thinks, is its technology and automation. The company can produce 600 million chips a year with fewer than 40 technicians, about 4 percent the work force employed by Taiwan competitors.
Chang is investigating a number of new ventures.
"We're just at the beginning of the game,"' he said. Besides, "I'm the kind of person who likes 10 projects going on at the same time."
But he stressed that he's also trying not to micro-manage the company and that the engineers are almost constantly being broken into new development teams to come up with better products and better processes.
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© 2006 AEM, INC. •