Toshiba acquires assets of OCZ – considerably strengthens position



We’ve just posted the following news: Toshiba acquires assets of OCZ – considerably strengthens position[newsimage][/newsimage]

OCZ today announced it has signed a purchase agreement with Toshiba.

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$35m for OCZ and Indilix. That’s a bargain. Now Toshiba has controler, flash and f/w in-house. They’re in a pretty good position like Intel and Samsung.


[QUOTE=aiolos;2711784]$35m for OCZ and Indilix. That’s a bargain. Now Toshiba has controler, flash and f/w in-house. They’re in a pretty good position like Intel and Samsung.[/QUOTE]

If that’s a bargain, why did Seagate, Intel, Micron, AMD, Western Digital, SanDisk, and everyone else, stay away from it?

US$35,000,000 can make Toshiba in a position as good as that Intel and Samsung? Annual NAND market is worth about 1,000 times more than that.

Rumor from inside of OCZ once posted on this very place said Seagate was offering US$300,000,000, and most observers seemed to think that was a bargain, too.

This is a semiconductor business of which results cannot be determined through just by posting and reading web media news and reviews. What you need is collect and invest US$10 billion and then US$100 billion. A single company might need to invest US$20 trillion within a generation just in order to stay alive. That’s more than annual US GDP. That’s an immense risk-taking. Toshiba, Sony, Hitachi, NEC, and other Japanese semiconductor players can still decide to invest that much since they still hold enough cash, but certainly this decision to buy some of OCZ’s assets for US$0.000035 trillion has negligible relevance.

In case of Toshiba, there are a lot of things needed to be done before it can compete successfully against Samsung and Intel. Toshiba’s brand name in the global laptop markets is still strong (though market share is not) whereas Samsung admitted there’s not much chance in its US market long ago (which was probably the biggest reason why the MacBook survived.) But that’s about all. Toshiba’s storage business has had some market share in both HDD and ODD, but it has always been behind Seagate in HDD, behind Hitachi-LG in ODD. The company was THE inventor of NAND flash memory, but was conservative in its commercialization and making it as inexpensive and ubiquitous as DRAM and Intel’s x86 microprocessors.

What Toshiba needs is not OCZ, but something like a joint venture with Intel, or the rest of Japanese semiconductor manufacturers. Joint ventures among technology giants especially in the semiconductor business are always risky as they tend to be short-sighted and require large-scale commitment from each of the parties. It’s difficult even for industry leaders such as Micron and AMD to make decisions to build and sell fabrication plants worth US$10 billion in a matter of months and joint ventures make the processes far more complicated.

Lastly, the most profound advantage of Samsung - by which I mean Samsung Electronics of South Korea, which is just one of the hundreds from the various Samsung business groups - is not that it has NAND, controller, and firmware of its own. It is that the company is strictly Confucian, anti-union, elitist, hierarchical, and keeps at least 20 of the best executives the nation provides. In other words, it’s an organization entirely made up of values, principles, and discipline contrary and hostile to everything sacred the Western businesses (such as hyper-hypocritical Google and Apple) promote.