by Anton Shilov
07/10/2012 | 11:46 PM
The chief executive officer of OCZ Technology Group, a leading maker of solid-state drives (SSDs), said that as the prices of NAND flash memory dropped in the recent quarters, demand for higher-capacity SSDs increased, which improved the company's revenues. But in order to further reduce pricing of solid-state storage, makers of NAND flash will have to start adopting new process technologies and/or start to use three-bits-per-cell (3bpc, TLC) flash.
"NAND flash prices declined significantly in Q1 [FY 2013 which ended on May, 31] and as a result we have seen a material increase in sales of our higher capacity products. While this is an early trend, we expect that the demand shift to higher capacity drives could produce materially increased revenue in our hard disk drive replacement segment if this trend holds," said Ryan Petersen, chief exec of OCZ, during a conference call with financial analysts.
Demand for OCZ's solid-state drives increased by 54% year-over-year during the quarter. In fact, the company shipped over 100 thousand of Indilinx Everest 2-based products, including Vertex 4 and Agility 4, in the first quarter of its fiscal 2013. With the evident success of its SSDs in hard disk drive form-factors, OCZ now claims that solid-state storage has already become strong competitor for traditional hard drives despite of lower capacities.
"It has always been our belief that SSD prices do not need to match those of hard disk drives on a per gigabyte basis in order to drive large scale adoption of SSDs. As such, it is becoming evident that SSDs are increasingly competing with hard disk drives in cost conscious market segment, a trend that is clearly positive for the SSD industry," stated Mr. Petersen.
OCZ believes that by now the pricing of multi-level cell (MLC or 2bpc) NAND flash memory produced using 25nm/20nm-class process technologies has bottomed. As a result, OCZ claims that in order to further boost capacities of SSDs and/or reduce their pricing, new types of NAND flash memory, such as 2bpc/MLC and/or 3bpc/TLC made using thinner technologies, will need to be used for solid-state storage devices.
"Given that, we believe that pricing on 25nm NAND flash has reached its bottom and in order to drive continued price decreases on a per gigabyte basis, SSD companies need to continue to introduce support for new NAND flash nodes and new technologies, such as the upcoming 20nm and 19nm nodes and TLC," stated Mr. Petersen.
For the first quarter of fiscal 2013 (which ended on 31st of May, 2012), OCZ earned $113.6 million in revenue and lost $6.3 million. During the quarter, SSD-related earnings were $106.49 million, of which $100.3 million came from sales of solid-state drives in hard drive format and PCI Express SSDs accounted for $6.168 million. Earnings for power supply units were $7.131 million.