OCZ Technology To Discontinue Memory Products

Tharic-Nar

Senior Editor
Staff member
Moderator
In a shocking move that comes out of left field for many but showed tell tale signs for some, OCZ Technology has announced that it will no longer release DRAM modules and will phase out all existing product lines by February 28th, 2011. Instead, the San Jose, California firm is switching gears to concentrate on the much more lucritive solid state drive market, which has shown explosive growth at the mobile, dekstop and enterprise levels.

ocz_ddr3_memory_large_news.jpg

You can read the rest of our post and discuss here.
 

Optix

Basket Chassis
Staff member
I know the company isn't going anywhere but OCZ was the first performance memory that I ever bought and since then I have owned two more kits, all of which overclocked well and didn't give me even so much as a hiccup.

Well done guys!
 

Kougar

Techgage Staff
Staff member
That's freaking insane. Unless their core business was just not doing well at all it seems unusual to just drop it because they found a short-term "star" rated market. NAND prices can be about as volatile as DRAM prices, so even that reasoning doesn't make sense to me.

I totally understand the whole lucrative SSD business, but SSD's are going to become a tight market with a great many players using only a core group of controllers. OCZ got ahead by developing their own custom firmware with Indilinx, unless they decide to go this route again with Sandforce or another leading controller technology they are going to have a much tougher time in the future SSD market.


Let's see... controllers so far that are yet to be released but are well known already:

Intel's "G3"
Sandforce's "SF-2000"
Micron's "C400"
Indilinx's "Jet Stream"

Intel's G3 is a good all around controller, but is only a moderate boost over the G2 series. Sandforce and Micron again are going to dominate in regards to performance, although now we will be seeing a greater emphasis on write amplification from Intel and Sandforce whom both have an edge here. Indilinx is a wild card, but I'm going to take a random guess Jet Stream will place between the G3 and the C400 overall...
 

Rob Williams

Editor-in-Chief
Staff member
Moderator
I talked to OCZ about this last week, and I admit... it upset me. OCZ was one of the first memory companies I ever came to get excited about. I loved its products, and loved even more overclocking them. When the XTC design came out, I was stoked... it was a great-looking design and end up being inside all of my friend's PCs as the years went on.

Since I came to know the company, I saw it produce CPU coolers, GPU cards and more, and as time went on, I saw most of these product-lines begin to disappear. I remember making a joke that "at least the memory line is safe", but joke's on me!

It's sad to see this happen, but it's understandable at the same time. In confidence I was given some numbers of how much of OCZ's revenue came from its different product lines, and the memory side of things was just a blip on the radar. The heart of OCZ going forward will be SSDs, and power supplies will of course be there as well. Given these events, it wouldn't surprise me much if I saw OCZ get rid of its PSU line-ups in the future, but it'd be far off as it still accounts for a healthy portion of the company's revenue.

Boy oh boy. Goodbye OCZ RAM :-(
 

Optix

Basket Chassis
Staff member
I read that memory sales accounted for only 22% of their net revenue in the 3rd quarter. You can't help but agree with their decision.
 

Kougar

Techgage Staff
Staff member
As long as they were still turning a profit, I don't see why they should leave their founding business. As a recent Samsung article points out, DDR4 is around the corner and prices are going to jump as they typically do for newer technologies in shorter supply. If they were going to go negative and simply got off the tracks while they still could then that makes some sense.

Still, just because SSD's are a "star" market right now, doesn't mean they will continue to be. NAND prices have fallen faster than anyone really foresaw and are predicted to drop lower as oversupply kicks in this year. If that sounds familiar it's because it happened in the DRAM commodity markets repeatedly...
 

Optix

Basket Chassis
Staff member
The DRAM market is notorious for its first quarter lull. Things naturally slow down after the holiday season. I guess OCZ sees SSD's as such a booming opportunity that they can poor DRAM resources into and the market growth outweighs the drop in NAND prices.
 

Tharic-Nar

Senior Editor
Staff member
Moderator
This action is also largely as a result of OCZ going Public with its shares, so it has a Board to appease. Boards are always after short term gains, and SSDs fill that need - but has a longer term stability. DDR4 doesn't have a market yet, nor will it any time soon since both AMD and Intel shifted the memory controller onto the CPU... so new memory means new CPUs. They could botch something together like AMD did with DDR2 and DDR3, allowing both types to be used but with limited abilities, defeating the point of switching. This was a motherboard manufacturers choice, and those products are so niche it's non-existent. The premiums for DDR4 will be high for a while, but just like all memory before, it'll drop like a stone.

SSDs use NAND, which is traded as a commodity on the markets. SSDs are in greater demand than RAM, since they are used for storage, and people always want more storage. Memory is limited by how much your motherboard and chipset can take, thus more prone to oversupply since it is dependant on system sales. SSDs will always be in demand as long as the people want to store stuff. I'm not saying that storage is without tight margins, but that's because it was speed limited, it's only use is capacity - a single competitive metric. SSDs changed this and put speed back into storage, making it competitive as companies try to make it faster and faster, while also increasing density. Admittedly, this is largely dependant on the controller rather than the NAND itself. The other interesting factor is lifespan, SSDs will die after X number of write cycles, meaning they need replacements... constant replacements. Memory is sold with lifetime warranties and such, not that they all live up to them, but they are a lot more stable than NAND, so limited replacement opportunity.
 

Rob Williams

Editor-in-Chief
Staff member
Moderator
I read that memory sales accounted for only 22% of their net revenue in the 3rd quarter. You can't help but agree with their decision.

22% is HUGE. I'm sure OCZ wishes it was even close to being that high.
 

Optix

Basket Chassis
Staff member
True, 22% of tens of millions is a lot of cash (if it even is that high) but how profitable is the market? We know DRAM prices always sag around this time and are lower in general than even a year ago plus I can only speculate about the number of RMA's when even trained monkies are overclocking their systems dumping foolish amount of voltage into the sticks because they think they know what they are doing.
 
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