OCZ to Stop Making Some DRAM [WSJ]

[Ao1]

I’d say their strategy has been low volume but high profit margin markets and somehow they ended up in a lower margin profit market due to competition.

The enthusiast market for ram was obviously once a high profit margin market that has subsequently deteriorated and become less profitable. SSD is therefore the new ram. When SSD becomes less profitable it will be something else.

That financial statement also states the following:

“Historically, we primarily sold high performance memory modules to individual computing enthusiasts through catalog and online retail channels. However, SSDs have emerged as a strong market alternative to conventional disk drive technology and SSDs are rooted in much of the same basic technological concepts as our legacy memory module business. “

The intent appears to be to move away from the enthusiast niche market to the niche market of enterprise. Again this seems to make really good sense. The value proposition of SSD performance at currently pricing levels for enterprise markets is high. Much less so however for the enthusiast.

I think it is a good move. They are already saying in that report that their top ten customers represented approximately 57% of net revenue.