Toshiba Acquires OCZ's Assets for $35 million
by Kristian Vättö on December 3, 2013 4:50 AM EST
Following last week's news of OCZ's bankruptcy filing, it's now official that Toshiba is acquiring OCZ's assets for $35 million cash. The agreement includes all of OCZ's client and consumer SSD business (controller IP, firmware, software and employees) and the acquisition is expected to be completed within the next 60 days. Unfortunately there is no official word on the fate of OCZ's other product groups (such as power supplies and cooling) but I've asked OCZ to clarify that and will update this post once I hear back.
The acquisition agreement includes a condition that Toshiba must provide OCZ with sufficient DIP (Debtor-in-Possession) financing in order for OCZ to keep the business going for the time being. In other words, OCZ's will continue to do business as normally but the press release doesn't reveal anything about what happens when the acquisition is completed. OCZ did tell us that warranties will be honored and their support status will remain unchanged but I'm waiting for OCZ to confirm that this also applies to the post-acquisition period (i.e. Toshiba would take responsibility of OCZ's warranties).
I'm glad that the deal went through because OCZ has a substantial amount of know-how when it comes to SSDs. OCZ had no troubles creating a high performance SSD, which speaks for talented engineering, but reliability was always their stumbling block. OCZ made the mistake rushing products to the market with only little validation but I'm confident that this will change under Toshiba's management. Validation is often the toughest part for smaller OEMs because it's an expensive and time consuming process -- there is simply not enough capital to validate the product for a full year like Intel has done in the past. With Toshiba the capital or manpower for a thorough validation process should no longer be an issue, especially because Toshiba has proven to be reliable in the past.
For someone like Toshiba, $35 million is a drop in the ocean. Compared to OCZ's current market cap ($7.68M), even $35 million is a good deal but bear in mind that back in 2011 OCZ paid $32 million for Indilinx alone. Now Toshiba is getting OCZ along with the former Indilinx and PLX for about the same price. It doesn't help that a little over year ago when OCZ acquisitions rumors were at their hottest, I heard figures of up to $1 billion being offered to OCZ but the company turned down the offers. It's easy to say now but OCZ should have struck while the iron was hot.
Either way, I'm eagerly waiting to see how the acquisition will play out. I doubt we will see the OCZ brand any longer, but it will be interesting to see OCZ's influence on Toshiba's future SSDs.
Source: OCZ Press Release
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JlHADJOE - Tuesday, December 3, 2013 - link
wow that sounds really cheap!Ikefu - Tuesday, December 3, 2013 - link
If Toshiba can put the muscle and fabs behind OCZs innovation to keep them a major player I'm all for it. I really don't want to see the SSD market collapse down to Samsung, Intel, and Micron as the lone players. The more competitors the sooner the 1TB SSDs for under $300 will arrive.Solid State Brain - Tuesday, December 3, 2013 - link
Eventually only the NAND producers will remain on the SSD market:- Intel-Micron
- Sandisk-Toshiba
- Samsung
- Hynix (perhaps they will eventually partner with somebody to better compete in the NAND market)
geniekid - Tuesday, December 3, 2013 - link
I think this comment alludes to the bigger issue that OCZ doesn't really produce much of what it sells. If you look at the products advertised on their website it mostly comes down to SSDs and power supplies. OCZ is neither a manufacturer of NAND or power supplies in the sense that it purchases these things from other OEMS and rebrands/repackages them.Guspaz - Tuesday, December 3, 2013 - link
That speaks volumes for the position that the traditional hard drive vendors like Western Digital or Seagate are in, though, doesn't it? So far, efforts by hard drive companies to break into the SSD market have largely failed, and even if they find some success, they'll always be at a disadvantage having to pay markup on NAND.It's true that they still have relevance today because the cost per gig of NAND is still high enough that it's not practical for bulk storage, but if NAND passes the tipping point (where it's not necessarily cheaper than hard drives, but simply cheap enough), or if something like MRAM takes over and enables lower costs, then that could be the end of them.
JDG1980 - Tuesday, December 3, 2013 - link
Right now, the least expensive SSDs (such as Samsung's 840 Evo) sell for about 50 cents a gigabyte if you buy a large unit - maybe a little lower if you snag a good holiday deal. Mid-range hard drives are about 5 cents a gigabyte - you'll pay about $150 for a decent 3TB (3000GB) HDD, for example.So, in order for SSDs to be competitive with mechanical hard drives for mass storage, they have to come down in price by an order of magnitude. That can happen, but it may take another 5 to 10 years.
DanNeely - Tuesday, December 3, 2013 - link
Cheap enough != as cheap as equivalent HDD capacity. Once NAND is cheap enough that $50-100 will buy enough storage for the average user the consumer HDD market will begin imploding. With current use patterns I'd put the capacity numbers needed at those pricepoints at 120/240gb. Even with users average data usage increasing I suspect we're only 2-4 years away from that point.HDDs will still be around for a while after that for mass low frequency of access data in the enterprise; but as the high volume consumer market goes away those of us who need terabytes of storage for huge steam accounts, photography, home media servers, etc will end up paying something closer to enterprise costs because the volumes that drive costs down won't be around. Just comparing the prices of basic consumer HDDs to prosumer RAID suitable models suggests we could see an effective doubling of the price per TB; probably in the form of several years when price falls are much smaller than historically normal.
stickmansam - Tuesday, December 3, 2013 - link
What is interesting is that Corsair is in pretty much the same situation as OCZ but has been doing pretty good.For SSD's to be viable for mainstream use I think we need 240-256GB drives to hit about $50-75. 120/128 are not enough for regular use since the OS + a few programs/games + few movies/music can fill them up pretty quickly.
emvonline - Wednesday, December 4, 2013 - link
The low price for a 128-256GB ssd is 60c per GB today. Average is about 75c for oow end client drives. So we are pretty far from 25c per GB (3-5 years).Side note ....corsair is not like ocz. ocz died due to fraud and repeated lying about sales. They would have survived and been bought for about 1B if not for that. Oops.
StevoLincolnite - Wednesday, December 4, 2013 - link
Corsair is a little different, it has a stupidly massive loyal following of enthusiasts who aren't afraid to deck out their PC's with Corsair Speakers, Headphones, Ram, Power Supplies, Keyboards, Mice, Coolers, Fans, SSD's, Flash Drives and Cases.They operate on revenue of about 450+ million a year, mostly targeting pretty much only gamers and enthusiasts.
Plus, they didn't have their brand tarnished by reliability issues.
Granted, I'm still happily sitting with an OCZ Vertex 2 64Gb SSD, which has been rock solid for years, but not everyone is so lucky.
And when it finally does die, I'll probably jump over to Samsung, but considering it's age and capacity I wouldn't be to worried about it dying right now.