Early this morning, OCZ issued a press release that Toshiba had successfully purchased OCZ under a Chapter 11 Bankruptcy agreement for 35 millions dollars. This is great news for the millions of present OCZ customers who have been holding their breath as we will now see OCZ opens its doors once again, and serve existing and future OCZ customers during the transition process. This agreement strikes at the heart of OCZ’s operational difficulties which has been as much a lack of available NAND flash memory as it has been working capital. In return, Toshiba has unrestricted access to OCZ proprietary controllers, firmware and software which now affords them the opportunity to do what only Samsung has really done to date, which is to manufacturer their own completely proprietary SSD.
This means we will potentially soon be seeing a Toshiba SSD that contains its own controller, memory and DRAM Cache, the controller of course being the Indilinx Barefoot 3. Examining the present landscape, Marvell enjoys the success of providing controllers to Micron, Toshiba and SanDisk while Intel relies heavily on LSI SandForce. Only Samsung and SK Hynix have the ‘complete solution’ since the Hynix purchase of LAMD and their controller, however, we have yet to see their complete SSD solution materialize as of yet. This agreement now provides Toshiba with its own controller IP and unlimited NAND flash as well.
All in all this is great news for both OCZ and Toshiba and could provide some genuine competition to Samsung, who has long enjoyed the success of their client and enterprise SSD families. For those who know and understand SSD controllers, the Indilinx Barefoot has long been seen as a world-class controller and having it in the hands of Toshiba engineering expertise might be a wonderful thing. Understanding Toshiba’s business success on providing the consumer with value oriented SSD solutions, this guarantees some great competition and SSD price wars in the future.
“Over the past year, OCZ has dealt with numerous issues which have stressed the company’s capital structure and operating model, posing a challenge to achieving near term profitability. The combination of NAND flash supply constraints and credit issues have impacted our ability to satisfy the demands of our customers; this combined with increased pricing pressure in our industry have contributed to our on-going operating losses. On an operational basis, we completed a complex investigation, several restructurings and a multi-year restatement that added significantly to our working capital requirements,” stated Ralph Schmitt, CEO of OCZ. “We have been working diligently on this partnership with Toshiba and we believe that this is the best outcome under our current corporate conditions.”
“We are excited to participate in this opportunity. If our bid is successful, the combination of our leading NAND technology with OCZ’s SSD expertise will allow us to further strengthen Toshiba’s SSD business,” said Mr. Seiichi Mori, Vice President of Toshiba’s Semiconductor and Storage Company and Corporate Vice President of Toshiba. “We value OCZ’s SSD business and technology in both the consumer and enterprise markets, and we are confident that it will reinforce our capabilities and help us to secure leadership in the SSD market.”
This transaction has been approved by the Board of Directors of OCZ, and it is expected that the sale will close within approximately 60 days.