OCZ, one of the pioneers in the development of the solid-state drive industry, said Wednesday it will either sell its assets to Toshiba or file for bankruptcy and liquidate.
OCZ said Toshiba has offered to buy its assets in a bankruptcy proceeding. OSZ has agreed to the terms of that offer, but plans to file a petition for bankruptcy first.
In a report filed earlier this week with the Securities and Exchange Commission, OCZ said Hercules Technology Growth Capital, one of its lenders, had taken over its cash holdings on the grounds that it had violated its loan agreement.
OCZ did not respond to a request for comment.
System builders who work with SSD suppliers were not surprised to hear about the demise of OCZ.
OCZ has not been known as a reliable SSD supplier, Andy Kretzer, director of marketing and sales at Bold Data Technology, a Fremont, Calif.-based system builder, said in an email.
"We stopped buying SSDs from them about a year and a half ago as we couldn’t reliably get allocation of parts. They never seemed to be competitive and their brand stopped warranting any sort of premium," Kretzer said.
Todd Swank, senior director of product marketing at Equus Computer Systems, a Minneapolis-based system builder, said there are too many SSD manufacturers in the market.
"How do you make it as a stand-alone company with only one product line with competitors like Intel and Samsung?" Swank said. "OCZ was one of the original innovators in the SSD market. But when you're not a true manufacturer of the main component in SSDs, the NAND memory, it's difficult to survive."
Toshiba is one of the few remaining hard drive vendors in an industry that has seen heavy consolidation in recent years.
If the OCZ deal goes through, Toshiba wouldn't be the first hard drive vendor to expand into the SSD market via acquisition. Western Digital earlier this year acquired sTec, the company chosen in 2008 by EMC as its first supplier of SSDs for enterprise-class primary story arrays.
Western Digital first got into the SDD space by acquiring Hitachi GST in 2011.