History (1991: Archive Closes Optimem

At the end of April, Archive Corp. (Costa Mesa, CA) has definitely and quietly closed its subsidiary Optimem Corp. (Mountain View, CA), a supplier of its own 12-inch WORM drives and 5.25-inch optical disk subsystems from Pioneer and Sharp.

The company has sales offices in California, New York, Washington DC and in UK.

Its activity has never been profitable and Archive has not found a buyer to take it over.

It was founded by Xerox Corp. in 1980 as a product development organization to bring to market optical disk drive technology that had been developed by the Xerox Palo Alto Research Center (PARC) and Thomson (France) and bought back in 1986 by Cipher for $10 million who sold a portion to 3M then entered in the Archive group last year, Xerox maintaining a minority interest.

Optimem suffered from the 12-inch WORM disk market that never took off and unsuccessfully tried a diversification in 5.25-inch optical disks by distributing Japanese products.

The Archive group hardly hid the fact it had bought over Cipher’s subsidiary with no big enthusiasm, Optimem’s yearly sales peaking at $10 million.

The business of another subsidiary of Archive, Irwin Magnetics Systems (Ann Arbor, MI), maker of 3.5-inch tape drives is not doing so well either and 58 of its US workers were laid off a few weeks ago which brings Irwin staff down t0300 workers.

This year, Cipher’s sales of half-inch tape drives should drop, anticipates Archive, from $70 million in its FY ended September 30 to $50 million this year.

Archive, on account of not sufficient profits, is having a hard time paying back the debt it contracted with Cipher’s acquisition. In its 3091, closing at the end of June, it expects an operating loss and a 15 to 20% drop in revenues compared to the previous quarter where $93.4 sales had been reported for a $1.1 million net income.

This article is an abstract of news published on the former paper version of Computer storage Newsletter on issue ≠42, published on July 1991.

Note: Archive Corporation was acquired by Conner Peripherals in 1992 for $210.4 million in cash.