Insufficient Supply of NAND Flash Memory Lower OCZ Sales

OCZ to Miss Revenue Guidance Because of Insufficient NAND Flash Supply

by Anton Shilov
09/05/2012 | 09:11 PM

OCZ Technology Group, a leading maker of high-performance solid-state drives (SSDs), on Wednesday announced its preliminary revenue for the second quarter of fiscal year 2013, which ended on August 31, 2012. The company's revenue will be lower than expected due to insufficient supply of NAND flash memory used to manufacture consumer-class Agility- and Vertex-series SSDs.


"Despite achieving bookings in excess of our expectations for our second fiscal quarter, we were not able to meet our previously stated revenue guidance due primarily to constraints in NAND flash supply. During the month of August we experienced a significant shortage on certain NAND flash components, based on industry wide tightening of supply, leaving OCZ with an undersupply of the 20nm-class MLC NAND used in our Vertex and Agility Line of products," said Ryan Petersen, chief executive officer of OCZ Technology. 


OCZ expects preliminary revenue for the second fiscal quarter of 2013 to be approximately $110 to 120 million compared to the previously guided revenue range of $130 to $140 million. This preliminary revenue range compares to $113.6 million for the first fiscal quarter of 2013 and $78.5 million for the second fiscal quarter of 2012.

"While we believe that the situation will resolve itself, subject to market conditions, we plan to hasten our transition to new process nodes in order to help ease these supply constraints," added Mr. Petersen.

Earlier in the third calendar quarter 2012 several large makers of NAND flash memory, particularly Toshiba Corp., started to cut-down shipments of multi-level cell (MLC) NAND to maintain pricing on comfortable levels for manufacturers. OCZ will hardly be the only producer of solid-state drives, who will be financially impacted by the decision.