CEO of OCZ Technology Group Says NAND Memory Supply Shortage Will Hurt Sales

Posted by at 3:30 pm on September 10, 2012

The CEO of OCZ Technology Group, a solid state drive manufacturer, announced last week that the company would not be able to produce enough of its products to meet industry demand. As EE Times reports, the shortage in NAND components — the chips that allow for smartphones and mobile devices to have high-density, low-power internal memory — is said to be industry-wide and an outgrowth of the increasing demand for NAND supplies. The company believes that the supply situation will resolve itself, but it is moving to reorganize its production processes to account for supply considerations.

The announcement came in the midst of OCZ’s most recent financial results reporting. OCZ experienced a significant shortage in the month of August, and the company was unable to acquire sufficient amounts of the 2X-nm MLC NAND featured in its Vertex and Agility line of products. OCZ is currently developing new process nodes with an eye toward strengthening its production infrastructure.

OCZ has, since last year, narrowed its focus to SSDs and abandoned production of RAM modules, as SSD production yields much higher revenues for the company.

As a result of the NAND shortage, the company warned that its fiscal Q2 revenues would be lower than expected. Shares in the SSD manufacturer dropped $1.07, or nearly 20 percent, to $4.29. As of today, they have recovered somewhat, though the stock still closed down 1.06 percent at $4.68.

As the company’s announcement stated, OCZ is not alone in its struggle to meet industry demand for flash-based products. In April, Toshiba announced that it was building a new NAND flash plant in order to cope with demand. Construction on that plant began this summer, but it is not expected to be completed until 2013.

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