OCZ to Stop Making Some DRAM [WSJ]

[WaterFlex]

sad news, sad

[zsamz_]

good news to me if ever my ram dies theres a chance i wont be offered ddr3-1600 instead of ddr3-2000 lol

[safan80]

LOL let me explain:

to begin with we made nothing but enthusiast parts, 8:1 in favour of high end.

Over the yrs that moved to around 50/50 split value and enthusiast.

The market has become over saturated with low end parts, no money in it any more...so we are going back to our roots...back to the enthusiast.

SSD is the big push as commented here, the gains you see on your system are far higher with the addition of an SSD than the addition of a 2100MHZ ddr3 kit, that said some just have to have the best of everything and we are actively going back after those people.

Just the really low end parts are getting culled though to start.

I hope this means you guys will makes DDR3 for i7 (1366) in 3 stick 24GB form running greater and or equal to 2000 speed. That would be catering to the high end market and not making the same thing as everyone else. I like the idea of low binning parts being turned into value ram. I must be dreaming again....

[zads]

...it seems really odd now to that they managed to capture a large market share by fighting for it agressively, to give it up again... and why would you publicly announce it?

sounds to me like this is meant to make stock holders think they will focus on higher margin products, which means they will have higher profits in the future...

but while 3% sucks, hey if you sell millions of dollars worth of memory each week, those 3% are nice to have and giving them up cause its ONLY 3% doesnt really make sense... its not like there is more money in highend memory... higher margins yes, but with the much lower volume it ends up being a lot less money... and when you want to sell highend memory you need to bin and get rid of the not that great parts, thats why you NEED a mainstream leg to stand on if you seriously want to compete in the highend segment when it comes to binning hardware... weird announcement...

Well, even if you make 3% initial profit in the retail market, you may end up going into the red ink due to warranty returns, repairs, paying for the customer support and shipping, infrastructure, etc,.
Maybe why OCZ is operating at a loss currently...

I'm pretty sure OCZ outsources their DIMM manufacturing to Taiwan.
So any binning and sorting would be done by that contract manufacturer, who has plenty of other commodity DRAM customers to eat up the lower binned chips.
There's also plenty of contract manufacturers to bin chips and then resell them to the module guys.

[zads]

Not according to OCZ’s recent quarterly report:

Today, as part of a diversification strategy which began in fiscal year 2009, our product mix is significantly more weighted toward the sale of SSDs and the SSD product line has become central to our business. As a result, our target customers are increasingly enterprises and original equipment manufacturers (or “ OEMs ”).

http://www.faqs.org/sec-filings/1007...ROUP-INC_10-Q/

Well, both could be true:
Typically OEM sales and Retail sales are separate departments in a company;
The Retail sales side could be refocusing purely on enthusiast parts,
While at the same time the OEM side is growing proportion-wise to be the majority in the company.

[saaya]

It's possible. Their ram generally comes in a plastic container anyone can pop open so no way of telling unless you saw fingerprint smudges or physical damage. But there was the two pairs I RMA'ed that came back bad.

so they have no seal? thats not good...
and the rmas... thats not good at all :S

Define high volume.

www.geizhals.at

available ddr3 products:
OCZ (139)
Kingston (136)
G.Skill (101)
GeIL (95)
Corsair (70)
Patriot (63)
Crucial (40)
Mushkin (37)
A-DATA (35)
No Brand (22)
TeamGroup (17)
Transcend (15)
takeMS (15)
Super Talent (14)
Buffalo (13)
PNY (10)
Samsung (10)
Aeneon (1)
Apacer (2)
Mustang (4)
CompuStocx (3)
Cellshock (1)

available ddr2 products:
Kingston (63)
OCZ (45)
G.Skill (39)
GeIL (35)
Transcend (32)
Corsair (31)
Mushkin (27)
Patriot (26)
A-DATA (26)
Crucial (25)
No Brand (25)
Mustang (22)
Buffalo (20)
PNY (17)
takeMS (14)
TeamGroup (13)
Samsung (8)
Super Talent (7)
Extrememory (7)
CompuStocx (5)
PowerRAM (5)
MDT (4)
Apacer (2)
exceleram (2)

yes, available products doesnt let you directly guess the volume theyre selling, but it gives you a good idea as it costs money to prepare a seperate product and they wouldnt do it if they werent making enough money off of them.

Well, even if you make 3% initial profit in the retail market, you may end up going into the red ink due to warranty returns, repairs, paying for the customer support and shipping, infrastructure, etc,.
Maybe why OCZ is operating at a loss currently...

I'm pretty sure OCZ outsources their DIMM manufacturing to Taiwan.
So any binning and sorting would be done by that contract manufacturer, who has plenty of other commodity DRAM customers to eat up the lower binned chips.
There's also plenty of contract manufacturers to bin chips and then resell them to the module guys.

right, so once that happens for a given product, you phase it out... but why would you phase out several products at once, and then even make an announcement about it? thats like saying, hey, weve been selling at a loss for a while but now we realized thats not a good idea and will stop selling those products. ^^

[Ao1]

s
thats like saying, hey, weve been selling at a loss for a while but now we realized thats not a good idea and will stop selling those products. ^^

That is exactly what they are doing

What you demonstrate is that there is significant competition for their ram products. The OCZ report states that memory net revenues decreased $2.3 million, so you have a scenario of reduced volume and reduced margin. Not good. What matters is your profit margin and clearly they are losing money on some of their memory products because they are trading at a loss.

If certain products are not profitable enough (or even worse they are losing you money) you need to get rid of them fast to free up cash to invest in more profitable opportunities. If you don’t you go under.

SSD is already close to 50% of their total sales and it’s where they are making money and increasing volume. If it wasn’t for SDD they would probably not be trading now. It makes sense to focus on profitable products and profitable market sectors. Hence they will still sell profitable memory to the enthusiast sector. For SSD they will still sell SSD to the enthusiast sector, but they are clearing trying to focus SSD to the enterprise market to maximise sales growth opportunities. Sales of SSD at the current pricing levels will be limited in the enthusiast sector, which is also now becoming very competitive. Sales of SSD to the enterprise market on the other hand is likely to be a growing market. Even at the current pricing levels they are attractive to the enterprise market when a single SSD can do the work of 10 HDD’s.

The announcement is simply a way of reassuring the markets that they are taking action so they can return to being profitable.

This is good news for everyone. Cutting corners to try and retain margin is never good news.

[Humminn55]

This is good news for everyone. Cutting corners to try and retain margin is never good news.

But that's exactly what OCZ has done with the PC Power and Cooling power supply line. Cut corners to retain/improve margin. What else can you call it when they drop Seasonic as the OEM for Silencers and pick up Sirfa....and then have the "new" Mk II Silencers perform electrically worse than OCZ's own branded Z-series power supplies?

But, this move was not wholly unexpected. The OEM/value ram segment is dominated by a few players, and one of them is not OCZ. When's the last time anyone's opened an OEM built (HP, Compaq, Sony, Dell, et al) computer and found OCZ labeled RAM? Doesn't happen...those companies buy from the source.....Micron, Samsung, Elpidia, etc.

[saaya]

That is exactly what they are doing

What you demonstrate is that there is significant competition for their ram products. The OCZ report states that memory net revenues decreased $2.3 million, so you have a scenario of reduced volume and reduced margin. Not good. What matters is your profit margin and clearly they are losing money on some of their memory products because they are trading at a loss.

If certain products are not profitable enough (or even worse they are losing you money) you need to get rid of them fast to free up cash to invest in more profitable opportunities. If you don’t you go under.

SSD is already close to 50% of their total sales and it’s where they are making money and increasing volume. If it wasn’t for SDD they would probably not be trading now. It makes sense to focus on profitable products and profitable market sectors. Hence they will still sell profitable memory to the enthusiast sector. For SSD they will still sell SSD to the enthusiast sector, but they are clearing trying to focus SSD to the enterprise market to maximise sales growth opportunities. Sales of SSD at the current pricing levels will be limited in the enthusiast sector, which is also now becoming very competitive. Sales of SSD to the enterprise market on the other hand is likely to be a growing market. Even at the current pricing levels they are attractive to the enterprise market when a single SSD can do the work of 10 HDD’s.

The announcement is simply a way of reassuring the markets that they are taking action so they can return to being profitable.

This is good news for everyone. Cutting corners to try and retain margin is never good news.

the reason that mainstream mem isnt profitable, at least in europe, is because ocz has been agressively cutting prices, trying to gain market share... sure, not only them, but back when i worked with dram they were by far the most agressive in cutting prices... almost daily...
to act surprised about low margins now seems really weird... this cant really come as a surprise to them...

and look at the ssd market... they have been pushing prices down there aggressively as well... im not saying its bad, on the contrary, but if they are going to complain about low margins in the ssd retail market next ill fall out of my chair laughing... :P

let me try to see this as positive as possible...
ocz will stop to focus on capturing market share by selling cheap dram en masse, of questionable quality, instead they will focus on ssds, and on enterprise ssds where QUALITY comes first and price comes second...
this means ocz will go back to its roots and focus on high quality products instead of cheap "good enough" products...

good!

[hurleybird]

Great news. The less OCZ crap ram on the market the better.

[amdsempron_xs]

OCZ will not be my brand of choice for memory anymore. I tried 2 Obsidian DDR3-1600 kits. None of them was able to run at rated speed without tons of MemTest errors.
Put them away, got a G.Skill Ripjaws DDR3-1600 CL7 kit which was running at DDR3-2000 @ 1.6V

[QuadDamage]

Great news. The less OCZ crap ram on the market the better.

Agreed. Half of their high end stuff can't even do rated speeds and timings at rated voltage. Screw'em.