SSD Makers Will Go Out of Business or Merge, OCZ Says

Market consolidation is inevitable, the company believes

The solid-state drive market is ready to enter the next stage of development, where SSDs actually qualify as mid-range storage devices, but this will bring about an inevitable decrease in the number of companies that make such things, or so OCZ thinks.

OCZ is one of the best-known makers of solid-state drives, which means that its opinion in regard to the likely evolution of the market carries weight.

What OCZ believes is that the SSD industry will be subject to the same phenomenon as the one that transformed the HDD segment over the past several years.

Some may remember that there were dozens of hard drive manufacturers back in the early 2000s.

Now, though, only Western Digital, Seagate and Toshiba are left. The rest either went out of business or merged with one of them.

OCZ foresees a similar string of mergers for SSD makers over the next decade. While independent firms can do a lot on their own, they can't exactly fight the current for long.

The firm itself doesn't intend to be acquired. While it did have some accounting problems and could have done better, financially, over the past few quarters, it is still going strong.

It was also one of the first entrants on the SSD industry, something that gives it an advantage over, say, Seagate, who is doing its best to sign co-development agreements with third-party SSD makers.

By 2015-2016, we might hear that OCZ holds a majority stake, so to speak, in the SSD market.

“I’ve said publicly before, this market is very early in its stage, there definitely will be consolidation and there is power and size [for that]. The two big power players are hard drive [manufacturers] and NAND flash [producers]. I do think that we have a lot of time in front of us as a standalone entity,” said Ralph Schmitt, chief executive of OCZ, at the Stifel Nicolaus technology conference.

“It is about the amount of IP and differentiation we can put in place to make a difference. We will see how that will play out.”

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