Over the past few years, prices for DRAM memory chips have steadily been on the rise. Unfortunately for module manufacturers, the amount that consumers are willing to pay has not. The resulting dwindle in profit margins in the computer memory market has caused one player to say enough.
OCZ has given word that they will begin to discontinue production of some of their lower-end, consumer DRAM modules. While these "commodity" level products had accounted for 70% of their DRAM revenue in the past year and a half, this only amounts to less than 3% of their gross margins. This has caused OCZ to post negative numbers several times over two years.
With the reduction of these lower-level DRAM modules, OCZ will be able to focus on their high-end enthusiast products, namely solid state drives. They feel their position in this particular market has solidified enough such that they will be able to make the focus transition from commodity DRAM modules to SSDs by November.
One of the driving forces behind the decision may have been recent reports from iSuppli of falling NAND flash chip prices. Prices are expected to reach $1/GB by the end of this year, a point set previously to be a key threshold for SSD adoption. While iSuppli feels prices will need to drop a further 40 cents per gigabyte by 2012 to make up lost ground against traditional platter hard drives, OCZ certainly appears to feel the drops have been enough to garner the majority of their attention.
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