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OCZ buys Indilinx

Published on 15th March 2011 by Paul Goodhead

OCZ's new line of Vertex 3 drives are based on the new SandForce controller.

OCZ today surprised the tech industry by announcing it had acquired controller chip manufacturer Indilinx for $32 million.

OCZ paid for the deal with shares in the company, meaning that former Indilinx shareholders now own a substantial 9.5 per cent stake in OCZ Technology Group Inc. The deal also safeguards all facets of the Indilinx business, with its founder and president Bumsoo Kim remaining in charge of the company’s 45 employees.

One motivation for the deal on OCZ’s part seems to be the acquisition of around 20 patents and patent applications, which are currently held by Indilinx.

OCZ also claims that the deal will ‘extend OCZ's capabilities with advanced controller technology including Tinkerbell, a high performance eMMC 4.4 x controller that replaces SSDs in consumer electronic devices such as smartphones, tablet PCs, GPS units and netbooks.’

The move also raises the question of what OCZ has planned for its SSD business. The company has had a long-standing relationship with both Indilinx and SandForce, and both companies have supplied controller chips for various parts of OCZ’s SSD range.

OCZ has attempted to reassure partners such as SandForce via a press statement, which firmly states that it will still continue to use other controller chips, and that Indilinx will still continue to supply chips to other SSD manufacturers. How long this is likely to last is up for debate, though, as OCZ will want to see a tangible benefit from its purchase at some point.

Is this acquisition a good move for OCZ, or is it nuts to buy a company and continue using a competitor’s product? Let us know your thoughts in the forums.

12 Comments

Discuss in the forums Reply

RichCreedy 15th March 2011, 16:18

why buy something your not going to use, other than cause possible problems for other business' in the future?

coolius 15th March 2011, 16:23

Of course the other question is whether other SSD manufacturers will continue to use Indilinx chips, thereby funding their competitor, or whether they will all switch to SandForce and others for their controllers?

Marvin-HHGTTG 15th March 2011, 17:40

I suspect they will develop their own controller to their own specifications, otherwise it's a lost investment as OCZ's competitors won't use the controllers, and if OCZ don't use them, what's the point?

kzinti1 15th March 2011, 18:59

Just $32 million? I wish I'd known they were going to sell out so cheaply! Then again, that was just cash mentioned. Not all the other perks involved. I'm looking at YOU, Steve Jobs! Worry.

maximus09 15th March 2011, 19:42

i'm sure something interesting will come of this, lets hope they design a super fast controller. That would be a big boost to their own SSD business and others if they sell it on.

HourBeforeDawn 15th March 2011, 19:54

Quote:

Originally Posted by RichCreedy
why buy something your not going to use, other than cause possible problems for other business' in the future?

to make more money selling the tech to other SSD and what not companies.

SpAceman 16th March 2011, 05:50

Could see lower SSD prices from OCZ if they are going to be making their own controllers... This could be interesting.

Altron 16th March 2011, 06:59

They've got to be planning their own controller. Makes no sense to outsource it to Sandforce if they can make a comparable one in-house. Indilux isn't exactly the hottest controller on the market, but as the article said, there are several patents OCZ wants. Could be they have something huge up their sleeve that they don't want to pay licensing for. Combined with them cutting off the RAM department, I'd expect something big out of them this year.

Tulatin 16th March 2011, 07:10

Quote:

Originally Posted by Altron
They've got to be planning their own controller. Makes no sense to outsource it to Sandforce if they can make a comparable one in-house. Indilux isn't exactly the hottest controller on the market, but as the article said, there are several patents OCZ wants. Could be they have something huge up their sleeve that they don't want to pay licensing for. Combined with them cutting off the RAM department, I'd expect something big out of them this year.

They might also have a pretty solid enterprise controller in the works, which any boffin knows has the potential to be a much bigger marketplace than selling drives dirt cheap and one at a time to the consumer.

Bindibadgi 16th March 2011, 12:43

This is massive, massive news and Tulatin has hit the nail on the head wrg to the server area. Vertical integration will make sure OCZ has all the components in place and its own schedule to make sure their SSDs work absolutely. It may not be the absolute fastest for enterprise but they need the QUALITY angle to override everything in order to sell.

There's also other factors with Sandforce I shouldn't comment on now. Either way, OCZ is in a prime position in the market - only Intel has a better one because it actually makes the Flash and FABs its own parts too.

impar 16th March 2011, 12:54

Greetings!

Quote:

Originally Posted by Bindibadgi
There's also other factors with Sandforce I shouldn't comment on now.

Good or bad?

sWW 16th March 2011, 15:13

Quote:

Originally Posted by SpAceman
Could see lower SSD prices from OCZ if they are going to be making their own controllers... This could be interesting.

I also think this will be interesting. I've been holding out for a noticeable price drop!