OCZ announced it will further optimize its business by discontinuing the production of low-end memory products. In the short term, the decision will hurt the company's fiscal 2011 revenue by $35 million to a range of $165 million to $180 million, but it should lead to higher margins in the future. The company will shift its focus to the production of higher-margin specialty and high-performance memory products, which includes solid state disks.
The company's commodity DRAM module products in the past year and a half accounted for about 70% of DRAM revenue while average gross margins have been less than 3%, OCZ said Tuesday. DRAM is a popular form of memory used in personal computers.
OCZ, which said its solid-state drive business has reached sufficient scale to make the shift from the low-margin DRAM products, expects the transition to be complete by the end of November. The company has posted a string of losses over the past two years.