OCZ buys Indilinx for $32 million

OCZ’s original Vertex solid-state drive can probably be credited for popularizing Indilinx’s controller design. Turns out, OCZ liked the controller so much, it bought the company. Well, maybe that’s not exactly how things went down. The deal is official, though. For a cool $32 million in stock, OCZ gets Indilinx and its “substantial intellectual property,” including some 20 patents and related applications. Interestingly, Indilinx will continue to produce controllers for other SSD makers, and OCZ won’t stop using third-party controller tech:

Following its acquisition by OCZ, Indilinx will continue to produce and supply its line of controller products to SSD manufacturers and OEMs on a global basis. The Indilinx controller business, and its 45 employees, will remain intact under the leadership of Bumsoo Kim, the founder and President of Indilinx, and Hyunmo Chung, Indilinx’s Chief Technology Officer. OCZ will continue its own R&D program to develop new proprietary technologies and products to expand its own solid state drive offerings.

The Indilinx acquisition notwithstanding, OCZ plans to continue utilizing controllers from other manufacturers including long-term partner SandForce, who currently supplies SSD processors for a wide range of the Company’s SSD products including the Vertex 2, Agility 2, RevoDrive, customizable Deneva enterprise drives, and the upcoming Vertex 3 family of SSDs.

This acquisition gives OCZ the resources to do some very interesting things with solid-state storage. I get the feeling that the company is gearing up to throw some of Indilinx’s weight—and brains—into enterprise storage products, perhaps with an eye toward offering more custom solutions like the HSDL interface featured on OCZ’s Ibis drive. The press release also notes that Indilinx tech gives OCZ a gateway to other SSD markets, including consumer electronics devices, smartphones, and tablets.

For PC enthusiasts looking at standard 2.5″ SSDs, the Indilinx acquisition may have little impact in the near term. OCZ is still committed to using SandForce controllers, and Indilinx will continue to sell its silicon to other drive makers. I do wonder what OCZ’s consumer SSD lineup will look like a year from now, though.

Comments closed
    • indeego
    • 9 years ago

    Consumer: Unless you are a psychopath enthusiast that cares only about speed over reliability and support, then OCZ should not be a consideration.

    Enterprise: If their Consumer-level support is any indication, they haven’t a fighting chance in the Enterprise market.

    I agree this is an [i<]absolute steal[/i<], there's very little competition in this marketplace and I'm very surprised that Indilinx didn't shop around much more.

    • HisDivineShadow
    • 9 years ago

    Seems like this is OCZ gearing up to use Indilinx as a budget SSD chipset maker. I don’t think the margins are high enough for an independent SSD chipset maker to go balls to the wall with budget chipsets. Prices would be so low that it’d probably just kill that small company in no time at all. But being bought out by a bigger company with other products, including high end and corporate ones, to help pad the budget… then that small company turned division would be able to focus on making value chipsets without worrying about not getting the lion’s share of the profits.

    This should also enable OCZ to provide some pretty compelling budget SSD solutions without incurring the licensing fee or having to spend more to get premier treatment. This is assuming that Jetstream is never going to show up in a solution superior to what Sandforce’s very newest chipsets are doing. I imagine this is the reason that Indilinx went along with the buyout. They saw what their chipsets were going to be capable of and realized they had no chance as their window of opportunity had run out with SF showing up with much higher performance than they had. This is similar to Intel’s reaction to SF and Marvell, which pushed them to use the latter in their own high end and focus their own latest tech toward the low to mid range. I wouldn’t be surprised to see OCZ attempt to mimic that strategy with their latest acquisition.

    I doubt many SSD makers will want to use Indilinx chipsets when OCZ will have much better pricing due to the fact they’ll control the price of said chipset and can price it so they’re always better. And in the very, very long run I doubt OCZ will want to keep licensing and buying premier terms with Sandforce when they own their own SSD chipset maker internally.

    I’d say within two years, you’ll see OCZ dry up on Sandforce and Indilinx will become OCZ exclusive, save for legacy parts. In the meantime, OCZ needs value line SSD’s and who better than Indilinx to provide them?

    • Pan Skrzetuski
    • 9 years ago

    This seems a huge steal to me. OCZ acquires a major supplier for the core of its primary product offering for a mere 16% of its annual revenue (~$189mil).

    This would be like Dell purchasing Microsoft for $11 billion (the same portion of Dell’s revenue). Microsoft’s stock value is about $230 billion btw.

    I know these are sort of apples and oranges. Does anyone have a superior analogy to propose?

    • potatochobit
    • 9 years ago

    Is this good news or bad news?
    I hope they dont get carried away and splurge with their latest profits

      • Meadows
      • 9 years ago

      As long as it’s not like nVidia’s AGEIA acquisition (or heck, any acquisition nVidia’s ever made), it should go fairly fine. At least for a while, surely.

    • Johnny5
    • 9 years ago

    45 employees? You can seriously be a minor (or even fairly major) player in this business with only 45 employees?

    Edit: Major player then. That makes it even more impressive. How do you do a strikethrough, by the way.

      • kuraegomon
      • 9 years ago

      Er, did you not mean _major_ player? I think they’re probably number 3 (possibly even #2) in controllers shipped. Actually, the more I think I about it, they might even be #1. I would have figured Intel or SandForce, but maybe the “budget SSD” (an oxymoron if ever there was one) market is bigger than I thought.

      • potatochobit
      • 9 years ago

      when all these dudes are your customers, yes

      Corsair Memory Extreme
      Corsair Memory Nova
      Crucial Technology M225
      G.Skill Falcon*
      A-RAM Pro series (32-256G)
      OCZ Vertex, Vertex Turbo, Agility, and Solid II
      Patriot Memory Torqx
      Patriot Memory Koi
      RunCore IV
      SuperTalent UltraDrive ME, GX
      Asax Leopard Hunt II T2
      Solidata PACER [2]
      Mushkin Io SSD [3]

      @wikipedia

        • Meadows
        • 9 years ago

        Those are products, not ‘dudes’.

          • derFunkenstein
          • 9 years ago

          They’re also not customers. 😆

        • Dashak
        • 9 years ago

        Upvote for ‘dudes’

      • Anomymous Gerbil
      • 9 years ago

      Think of design being separate from manufacturing etc.

        • Chrispy_
        • 9 years ago

        Yeah, I work for one of the worlds top-10 skyscraper architects. Economic depression means we have only around 100 employees at the moment, but the workforce involved in actually manufacturing the skyscrapers is enormous in comparison to us (the design team).

      • Firestarter
      • 9 years ago

      If you have 20 (guesstimate) very smart engineers dedicated to working on a profitable niche, with all boring stuffs such as the actual manufacturing and sales handled by others, then yeah you can be a major player with 45 employees.

      • ShadowTiger
      • 9 years ago

      Does that number include contractors? Many companies use contractors which are not considered employees because they can be fired & hired whenever it suits the company (and its financial reports)

        • UberGerbil
        • 9 years ago

        And in the US at least, tax law [i<]requires[/i<] you to do that periodically -- if you don't, and you keep them employed for too long (even if they're at arms-length with a contracting agency as their employer of record) they get considered to be "common law" employees and you get dinged for not treating them as such.

    • UberGerbil
    • 9 years ago

    Interesting.

      • bdwilcox
      • 9 years ago

      maximum verbosity /off

      • kuraegomon
      • 9 years ago

      Interesting is right – but I honestly can’t quite see what the thought process is yet. There’s no denying that Indilinx make decent controllers, though SandForce is definitely the market leader now.

      Still, I can’t quite figure out the plan here. It almost feels like the price was right, so OCZ said “why not?”.

      Now, if only this could somehow positively impact OCZ’s quality control … then we’d be cooking with gas 😛

        • stdRaichu
        • 9 years ago

        Sandforce may be the market leader, but they also sell to all of OCZ’s competitors; there’s not really an awful lot to differentiate between an OCZ and a Corsair drive using the sandforce controller, for example.

        In-house controller designers and firmware engineers could create a controller that no-one else has.

      • ssidbroadcast
      • 9 years ago

      32M seems light.

Pin It on Pinterest

Share This