OCZ Technology, once the legendary name among the suppliers of high-speed memory modules, plans to completely withdraw from the dynamic random access memory market. As a result, the company will concentrate its efforts on solid-state drives (SSDs), flash media and power supply units (PSUs).
In August 2010, OCZ announced a strategic optimization of its memory products whereby it discontinued certain unprofitable commodity memory module products with the intent to continue only with certain high-performance memory products. However, this did not help the company much and its DRAM-related losses only widened. As result, OCZ decided to can all of its DRAM product lines going forward.
"The board has determined that it is in the best interests of the stockholders to accelerate plans to discontinue its remaining DRAM module products by the end of its current fiscal year of February 28, 2011. Accordingly, our DRAM products are now expected to have minimal, if any, sales in the next fiscal year and beyond," an official statement from OCZ teads.
Given the fact that solid-state drives (SSDs) accounted for about 78% of the company's revenue, whereas memory, flash media and PSUs accounted for 22% of the company's earnings, the decision barely was a hard one to make.
Even though OCZ will continue to ship products for enthusiasts, such as SSDs or PSUs, with the lack of OCZ-branded memory modules one of the legends of the high-end PC industry will be essentially gone.
"We will have some limited memory items moving forward especially during the ramp down period but our focus is definitely on our fast growing SSD business both on the client and enterprise side. We have a lot of resources placed on the development, manufacturing and deployment of our solid state drives and are able to innovate and add value in this product category. Moving forward flash media and PSUs are absolutely part of the plan and have and continue to sell well and are strategic areas for us as we can also add value for consumers and our industrial/OEM clients," said Alex Mei, chief marketing officer at OCZ.
OCZ will continue to fully support its memory modules and will even launch a number of new memory modules that have been in the short-term plans. However, no new memory products are in development.
"In general no new modules are incoming, but we are already committed to some launches for example the Fatal1ty launch alongside partners for the new Fatal1ty branded Sandy Bridge motherboard platform from Asrock and some XMP parts with Intel. Though we are exiting the market we are not leaving any customers or partners hanging," stressed Mr. Mei.
OCZ reported this week its third quarter fiscal 2011 results (Q3 FY2011), which ended on November 30, 2010. Net revenues in Q3 FY2011 were a record $53.2 million, and increased 40% both on a year-over-year and sequential basis, from $38.0 million reported in Q3 FY2010 and in Q2 FY2011. SSD revenues reached a record $41.5 million in Q3, an increase of 325% over Q3 FY2010 SSD revenues of $9.8 million, and a 105% increase sequentially over Q2 FY2011 SSD revenues of $20.2 million. GAAP net loss for Q3 FY2011 was $8.3 million, or $0.29 loss per diluted share. This compares to GAAP net loss of $1.0 million, or $0.05 loss per share in Q3 FY2010.