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PRS Guitars (also known as Paul Reed Smith Guitars) is an American guitar manufacturer headquartered in Stevensville, Maryland, founded by guitarist and master luthier Paul Reed Smith in 1985. PRS has a reputation as a manufacturer of high end electric guitars made in the US, and known for their custom shop instruments. However since the 1990s they have expanded production to Asia, where they manufacture the more affordable 'SE' line of instruments. As of 2013 they have begun making more affordable guitars in the US with their 'S2' line. PRS Guitars also manufactures guitar amplifiers. Two of PRS's most notable endorsers are Carlos Santana and Gustavo Cerati. In addition to this, many other artists endorse the company, including Mike Oldfield, who has used a PRS Artist Custom 24 for studio recordings and live shows since the late 1980s; Clint Lowery; Mikael Åkerfeldt; Dave Navarro; Ted Nugent; Al Di Meola; Mark Tremonti and Orianthi.
Paul Reed Smith was a guitar player who began building guitars while he was in college in the mid-1970s. Early guitar players to use his hand-built guitars were Stanley Whitaker (of Happy The Man), Derek St. Holmes (of Ted Nugent's band) and Howard Leese (then with Heart), but Smith's big break came when Carlos Santana began playing the still hand-built guitars, which at the time looked like a Gibson Les Paul with a double cut-away and were made of expensive woods like curly maple. He used the custom as a prototype to raise orders on the road worth nearly $300,000. Smith set up a limited partnership with his wife Barbara and business man Warren Esanu, and set up a factory in Virginia Avenue, Annapolis. Smith produced 20 guitars for the 1985 NAMM Show (those guitars are now known as the "NAMM 20"), and managed to find a niche in the guitar market: the mid-1980s was the time of the Superstrat, and there was little competition for the higher-quality, upscale guitars PRS was building, guitars with "an elegant, modern, vintage-inspired design--the kind of guitar one might have expected Fenders and Gibsons to evolve into".
At first there were eight workers taking up one third of the building which they shared with a furniture-stripping shop. After three years PRS had taken over most of the building, with 45 people producing 15 guitars every day, and as time progressed a separate woodshop was added. By 1995 the factory was making 25-30 guitars daily and employed 80 people. In 1996 production moved to a new factory in Stevensville on Kent Island, just across a bridge from Annapolis. By the end of 1998 Prs was producing 700 guitars a month with a staff of 110 people.