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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Kjella - Thursday, December 5, 2013 - link
Yeah, the important thing here is that HDDs don't scale down, checking with my local price site the cheapest laptop hard drive you can buy is 320GB and for roughly 50% more you can get a 64GB SSD. Per gigabyte that's still 7.5x the HDD, but you can't buy a 100GB HDD for 1/3rd the price. If for example many business workers with Windowsand Office - no Steam, no video, no photos, no music collection just Word, Excel, Powerpoint and some business-specific apps. I remote in to a virtual machine at work, it's just 40GB yet has all the tools I need. In that case I'd prefer a laptop with a 64GB SSD over a 320GB HDD that will stay empty.speculatrix - Monday, December 9, 2013 - link
DanNeely, I agree 100%.When the floods in. Asia caused disk drives to dramatically increase in price, flash drive sales jumped in volume despite still being more expensive than disks because disks were no longer seen as cheap easily available commodities.
One volume manufacturing drops off, disks will inevitably rise in price.
menting - Tuesday, December 3, 2013 - link
the lower the profit margins for SSDs fall, the more likely that non NAND manufacturers will start bowing out. The only possibility of a non NAND manufacturer staying in the SSD business in the long run is if they provide additional services/features that others aren't providing, which is very hard to do.Primum - Tuesday, December 3, 2013 - link
I think you mean "struck while the iron was hot", not "stricken".I've used an OCZ Agility III for the past year and a half without issue, so with any luck Toshiba will just help them make better SSDs. It opens up the chance for hybrid drives amongst other things.
Kristian Vättö - Tuesday, December 3, 2013 - link
Grammatically both are correct because struck and stricken are both past participles of strike. This might be one of those US vs UK English things but I've changed it to struck now because it sounds a bit better.yefi - Tuesday, December 3, 2013 - link
http://public.wsu.edu/~brians/errors/stricken.htmlPrimum - Tuesday, December 3, 2013 - link
Pretty sure Americans say struck, but I'm British.DanNeely - Tuesday, December 3, 2013 - link
American, and I've never seen stricken used like this. I agree fully with yefi's link on the few cases where stricken is appropriate.DanNeely - Tuesday, December 3, 2013 - link
That press release only says that Toshiba is acquiring the SSD businesses, and leaves open the fate of the remainder of the company. The DRAM business is probably not worth much because it's a fungible market where almost no one has any brand loyalty beyond a generic premium brands/cheap brands dichotomy. However in addition to their own branded PSUs, OCZ owned PC Power and Cooling, which has been known for making top quality hardware. I wonder what's happening with them.geniekid - Tuesday, December 3, 2013 - link
I think few people have brand loyalty when it comes to power supplies, and those that do probably prefer one of the OEMs. Both OCZ and PC P&C power supplies are rebranded power supplies made by OEMS, according to http://www.tomshardware.com/reviews/power-supply-o...