What does OCZ’s Bankruptcy Tell?
Competition of NAND Flash market is indeed intense. Half a month ago, there was another manufacturer-OCZ filing for bankruptcy. As one of the first companies to produce and aggressively market enthusiast-targeted consumer SSDs, OCZ begin history of being a part of Toshiba. From the bankruptcy of OCZ, NAND Flash industry shows the following structure transformations, according to Trendforce.
First, more mergers and acquisition in the future
Driven by unstable shipments and pricing uncertainties of NAND Flash products, independent SSD makers are suffering increasing difficult financial pressures. Worse, with dominant brands reducing price, the situation facing small SSD manufacturers becomes more serious. Undeniable, there will be more mergers in the future. And OCZ’s bankruptcy is the beginning.
“The SSD market is far from imploding,” said Schulz, founder and senior analyst for the Stillwater, Minn.-based StorageIO Group. “What you are now seeing is the reality of the SSD market. We’re just scratching the surface of where it will be in five, 10, 15, 20 years. We’re just in the infancy of it.”
Second, major brands dominate market
Currently, the NAND Flash market is left with only three major participants, including Samsung with market shares at nearly 37% of the entire output; followed by Toshiba at around 36%, SK Hynix at 11%. Micron and Intel own a combined 16%.
And these companies, with direct control over their own NAND Flash production, are continuing to strengthen the integration between the upper and lower streams of their SSD supply chains, such as establishing strong relationships with major NAND Flash manufacturers (for instance, Kingston, Crucial etc), says market researcher Trendforce.
Third, product mix transformation affect retail vendors
The NAND Flash market is shifting focus from UFDs and memory cards to OEM-SSD, eMMC, and eMCP products; as such, the supplies of the retail market vendors have gradually begun to decline.
To offset the increasing pressure, independent SSD manufacturers should sought to strengthen the effectiveness of their SSD product lines through either self-development or relevant acquisitions on one hand; and enlarge R&D to grasp controller chip technology.