Trading Update

RNS Number : 3739L
OCZ Technology Group, Inc.
09 January 2009

9 January 2009
OCZ Technology Group, Inc.

Trading Update

OCZ Technology Group, Inc. ("OCZ" or "the Group", AIM: OCZ), a worldwide leader in innovative, ultra-high performance and
high-reliability computer components, announces an update on Christmas season trading and the impact of recent government initiatives to
provide financial support to the DRAM industry.

Christmas season trading

OCZ experienced strong revenue growth over the Christmas holiday season, with increases in key indicators such as customer sell-through
statistics. This was due to higher than expected consumer demand, particularly with the Group's larger online retail-based customers, which
account for the majority of its sales. Revenues in Europe met the Board's cautious expectations, with a significant increase in demand in
the latter part of the Christmas buying period.

The Group believes that the later timing of holiday-season sales indicates they were primarily driven by discounting in connection with
the broader economic downturn. The Board, therefore, expects to report higher than previously anticipated sales discounts for the period. As
a result, provisions have been increased to recognise potential future redemption of mail-in rebates and other sell-through related
discounts issued during the period, which is likely to adversely affect the Group's operating profits in the short term. At the same time,
the Group is in ongoing discussions with its bankers, who have to date continued to be supportive, regarding the current and future
covenants surrounding its facilities in order that they better match the Group's expected financial performance in the next 12 months.

Impact of financial support from the Taiwanese and German Governments to the DRAM industry

In December, both the German and Taiwanese Governments started to provide financial aid to some of the Group's key suppliers of
approximately EUR325m and approximately $6.1 billion, respectively. However, the exact details have not been made public. In anticipation of
these initiatives and following their announcement, the purchase price of both DRAM and NAND flash components has been increasing
significantly - in some cases in excess of 50 per cent. from previous historical low prices.

The medium-term effects of these price increases, and the stability of component pricing in the near to medium term is at this stage
unclear. However, industry commentary suggests broad stability to a slight upward trend from current DRAM component pricing. DRAM and Flash
Integrated Circuits comprise more than 80 per cent. of the Group's cost of goods for its memory-module and flash-based product lines.

As the Group passes these costs on to consumers, it is expected that its average selling prices ("ASP") for memory-module and
flash-based products will increase and consequently operating costs as a percentage of revenue are expected to decrease, with a beneficial
impact on margins.

Although, as previously outlined, the Group has reduced its exposure to memory-module products, its sales of these products more than
tripled to 900,000 units in the six months ended August 2008. This occurred during ASP decreases in excess of 75 per cent.; a trend which
started in November 2007, making any significant increase in ASPs now particularly important.

Although the Group cannot accurately predict the medium-term market trend of DRAM flash component pricing, if increases in average
selling price persist, the Group expects to produce significantly higher revenue, decreased operating costs and subsequently increased
profit associated with its memory module and flash business.

Outlook

Despite the uncertain economic market conditions worldwide, the Group is optimistic that it will continue to grow in line with previous
expectations and efficiently execute its plans in the medium and long term. However, in the short term, the Group is unable to predict
post-holiday buying trends, the exact effect of holiday season discounting or the magnitude or longevity of the recent increases in ASPs
related to the DRAM support initiatives. In the light of this, the Directors now expect OCZ to make an operating loss in the year to
February 2009.

Enquiries:

OCZ Technology Group, Inc
Ryan Petersen, Chief Executive Officer +1 408 733 8400
John East and Partners Limited
Bidhi Bhoma/John East +44 20 7628 2200
College Hill
Adrian Duffield/Carl Franklin +44 20 7457 2020

Note to editors

OCZ develops, produces, and distributes high-performance computer components including flash memory storage, memory modules, thermal
management solutions and computer power supplies, designed to make computers run faster, more reliably and more efficiently.

With a reputation for innovation and excellence in a demanding and discerning market, OCZ extended its market leadership when it
acquired PC Power & Cooling in May 2007, to become a global force in high-performance power supply and cooling products. In October 2007, it
acquired high performance laptop and desktop computer systems maker Hypersonic PC to further diversify its product offerings.

Based in the heart of Silicon Valley, OCZ employs approximately 275 staff across offices in the USA (Sunnyvale and San Diego), Canada,
Holland and its manufacturing and logistics centre in Taiwan.
www.ocztechnology.com

This information is provided by RNS
The company news service from the London Stock Exchange

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