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OCZ Acquires Indilinx SSD Controller Maker

By - Source: Tom's Hardware US | B 23 comments

OCZ does the unthinkable.

In a bit of a twist, OCZ announced today that they've acquired Indilinx, makers of the famed Bigfoot SSD controllers.

Prior to SandForce's arrival, Indilinx was regarded as the leading makers of controllers for solid-state drives. The company gained both consumer and media favoritism when it demonstrated that drives based on its own controllers were competitive with lead drives made by Intel. Indilinx's controllers allowed many SSD manufacturers to bring SSD prices down to a level where a large number of mainstream consumers started to take notice.

Up until Indilinx came along, prices for SSD drives were well out of reach of average buyers. Expensive controllers compounded the price issue by requiring the use of very expensive NAND memory. Both Indilinx and SandForce gained widespread popularity by allowing manufacturers to utilize lower cost memory but actually increasing performance by a wide margin above the benchmark drive at the time: the Intel X25-M SSD.

We're not sure what to think of in terms of the ramifications that this deal will have on OCZ's working relationship with SandForce, but it's safe to assume that SandForce isn't happy about the inked deal. Up until this point, OCZ had been advocating its tight partnership with SandForce.

More to come.

The PR:

SAN JOSE, CA—March 14, 2011—OCZ Technology Group, Inc. (Nasdaq:OCZ),a leading provider of high-performance solid-state drives (SSDs) for computing devices and systems, today announced it has signed a definitive agreement to acquire Indilinx Co., Ltd, a privately held fabless provider of flash controller silicon and software for SSDs.

Indilinx is headquartered in South Korea and currently sells its line of flash controllers to SSD manufacturers and Tier One OEMs for use in a broad array of products addressing multiple markets, including embedded and industrial as well as laptops and PCs. Indilinx controllers have been deployed within OCZ's SSD products since December 2008, and are currently featured in the Z-Drive series of PCIe-based SSDs. Indilinx's technology is expected to enable OCZ to expand its presence into the embedded, hybrid storage, and industrial markets.


OCZ will gain substantial intellectual property from Indilinx including approximately 20 patents and patent applications related exclusively to the business as part of the transaction. For example, the acquisition is expected to 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. Tinkerbell improves the user experience in consumer mobile devices for applications such as internet browsing, gaming, social networking applications, emails, and multimedia play.


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 transaction is an important step in OCZ's strategy and significantly enhances our ability to capitalize on the worldwide demand for Solid State Drives," said Ryan Petersen, CEO of OCZ Technology Group. "This combination brings together two organizations that are committed to advancing solid state drive design, and provides a unique opportunity for OCZ to increase both customer and shareholder value as well as expand our reach into embedded markets."


Under the terms of the agreement, OCZ will acquire Indilinx for approximately $32 million of OCZ common stock. Indilinx shareholders will own approximately 9.5% of the OCZ shares outstanding after issuance of the shares. The transaction has been approved by the board of directors of each company, and is expected to close within 30 days, subject to customary closing conditions, including regulatory approvals. OCZ expects the transaction to become accretive to its earnings per share toward the end of this fiscal year on a non-GAAP basis, excluding acquisition-related expenses, restructuring charges, and amortization of intangibles.


Ryan Petersen, CEO, will be a featured speaker at the Roth Capital 23rd Annual Orange County Growth Stock Conference today at 5:30 pm pacific time. To listen to the presentation and view the accompanying slides, please visit the investor relations events section of OCZ website at www.ocztechnology.com and click on the link provided for the web cast.


Merriman Capital, Inc., a wholly-owned subsidiary of Merriman Holdings, Inc. (Nasdaq:MERR), served as OCZ's exclusive financial advisor for the transaction.

Display 23 Comments.
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  • -1 Hide
    mayne92 , March 14, 2011 10:21 PM
    I knew it was only time...
  • 1 Hide
    scook9 , March 14, 2011 10:56 PM
    It would be interesting to see what Indilinx's latest offerings have in store. They really defined SSDs for the first generation!
  • 1 Hide
    JohnnyLucky , March 14, 2011 11:01 PM
    I remember what happened about 5 years ago when OCZ acquired PC Power & Cooling. PCP&C had some of the best high quality power supplies available until OCZ took over.
  • 2 Hide
    randomizer , March 14, 2011 11:15 PM
    Maybe OCZ will buy Sandforce too. That will make them a formidable force in the SSD industry, as they'll control a huge chunk of the controller market.
  • 0 Hide
    naturalnine , March 14, 2011 11:25 PM
    BIGFOOT? Isn't it BAREFOOT??
  • 2 Hide
    tpi2007 , March 15, 2011 1:10 AM
    Now Western Digital could buy OCZ
  • 1 Hide
    falchard , March 15, 2011 1:53 AM
    PC Power & Cooling before the OCZ acquire produced the best power supplies in the world. 5 years later... PC Power and Cooling produce the best power supplies in the world. Don't see how the OCZ influence really did anything except make the OCZ line of power supplies more appealing.
  • 1 Hide
    Anonymous , March 15, 2011 2:06 AM
    Looks more like they bought them to put competitors at a dis-advantage.
  • 1 Hide
    nikorr , March 15, 2011 6:34 AM
    falchardPC Power & Cooling before the OCZ acquire produced the best power supplies in the world. 5 years later... PC Power and Cooling produce the best power supplies in the world. Don't see how the OCZ influence really did anything except make the OCZ line of power supplies more appealing.

    :) 



  • 2 Hide
    Proximon , March 15, 2011 6:46 AM
    falchardPC Power & Cooling before the OCZ acquire produced the best power supplies in the world. 5 years later... PC Power and Cooling produce the best power supplies in the world. Don't see how the OCZ influence really did anything except make the OCZ line of power supplies more appealing.


    No. They sold some good PSUs that were made by Seasonic. The new PC P&C units are also made by Seasonic, but there are very few reviewed yet.

    OCZ likes to produce high volumes and lower prices... that works fairly well but does drive up failure ratios a little bit.
  • 0 Hide
    dark_lord69 , March 15, 2011 12:35 PM
    YAY! This could be a good thing! Now OCZ won't have to pay royalties to SandForce. They can make their own controller chips and sell drives at a discounted price. The could drive down prices all over the SSD market. OCZ could become the cheapest SSD drives you can buy! On the other hand they may just be greedy and keep thier prices just as high as the other companies to bank the extra cash... Only time will tell...
  • 1 Hide
    oatmeal25 , March 15, 2011 1:00 PM
    Maybe they can start using their own controllers and not let the buying customer about the change or that capacity is lower and the drive is slower?
  • 2 Hide
    banthracis , March 15, 2011 1:05 PM
    falchardPC Power & Cooling before the OCZ acquire produced the best power supplies in the world. 5 years later... PC Power and Cooling produce the best power supplies in the world. Don't see how the OCZ influence really did anything except make the OCZ line of power supplies more appealing.



    Actually, post OCZ acquisition PC P&C stopped using Seasonic made PSU's and switched over to the much inferior Sirta. As a result their entire Silencer II line was pretty much crap. It's only in the last year that they've been going back to seasonic in an attempt to bring back quality.

    Jury is still out on how good current PSU's are. Either way though, with XFX getting into the game with cheap M12D based seasonic units and corsair getting their x series units, there are much better options both at the budget and higher end range than PC P&C now.
  • 0 Hide
    thrasher32 , March 15, 2011 1:52 PM
    Bigfoot LOL.

    This could be a good thing, now OCZ (and the consumer) doesn't have to pay licensing fees for the drive controller, which should drive SSD prices down. They'll need to bring Barefoot up to speed though, so I hope they have some good engineers.
  • 0 Hide
    thrasher32 , March 15, 2011 1:55 PM
    oatmeal25Maybe they can start using their own controllers and not let the buying customer about the change or that capacity is lower and the drive is slower?


    Slower than what? I have an OCZ SSD with the Indilinx controller and it absolutely screams. Sure, it's no Sandforce drive, but it's a bazillion (approximately) times faster than my old mechanical HDD. It's nice when Windows 7 boots from cold start in less that 15 seconds.
  • 0 Hide
    oatmeal25 , March 15, 2011 2:23 PM
    I was referring to how OCZ switched components on customers without letting them know. If you haven't heard it is in this article
    http://www.tomshardware.com/reviews/ocz-vertex-2-25nm-ssd,2867.html

    Thankfully I have a pre-debacle OCZ Vertex 2 but I doubt I'll buy anything from OCZ again.
  • 0 Hide
    matt_b , March 15, 2011 2:51 PM
    dane1230Looks more like they bought them to put competitors at a dis-advantage.

    I second that. I also don't see them lowering their prices much on their own products, but rather pocketing what used to be the licensing fees payed out to themselves. I for one am done with this company, their RAM for me has been questionable lately (funny how they are stopping production of it anyway), their power supplies are not that impressive any longer, and the rebates are HORRIBLE for reliability. Just another money-hungry company trying to make things as cheap as they can with an average price.
  • 0 Hide
    borisof007 , March 15, 2011 3:14 PM
    tpi2007Now Western Digital could buy OCZ

    That's stupid, WD just bought Hitachi, they wouldn't do that. OCZ will remain independent
  • 0 Hide
    rhino13 , March 15, 2011 4:55 PM
    And Dell will buy AMD!
    Or was the rummor HP, I can't remember.
  • 0 Hide
    thrasher32 , March 15, 2011 7:13 PM
    oatmeal25I was referring to how OCZ switched components on customers without letting them know. If you haven't heard it is in this articlehttp://www.tomshardware.com/review [...] ,2867.htmlThankfully I have a pre-debacle OCZ Vertex 2 but I doubt I'll buy anything from OCZ again.


    My bad. I read that article too. Sounds like you and I have similar SSD's: Vertex 2. I have the 120gb model. Love it.
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