Friday, June 26, 2009
SSDs are everyone's favorite inevitability, but due to rising NAND cost and other factors, SSDs won't achieve deep penetration in the notebook or low-cost markets in 2009 or 2010, NAND vendors expect. In 2010 and 2011, decreasing costs, increasing performance differentials, and Windows 7 will provide the push that makes SSDs a mainstream part of the PC storage portfolio.
NAND costs were driven down by a dramatic oversupply late last and early this year, to record lows of only $1/GB in 32Gbit and 16Gbit modules, pushing every major NAND vendor into the red. This year, in what could be called the Great Flash Resurgence of 2009, prices are back up, to almost $2/GB, driven by widespread shortages due to high and escalating demand.
While this is good for NAND vendors, it's bad for SSDs, which are critically price-constrained and only recently have become attainably-priced. With hard disks now priced at about $.07/GB, SSDs are positioned as a premium upgrade for notebooks, and a minimal baseline for netbooks. With prices on the rise, though, the attractiveness of this sell is diminished. As a result, NAND vendors forecast a mere 1-1.5 percent penetration for SSDs in notebooks, and 10 percent in netbooks.
In 2010 and 2011, less-expensive flash processes, greater production of NAND, and the wide adoption of Windows 7, which includes a number of SSD-specific performance-enhancing features, will drive greater adoption, and it is in one of these two years, NAND vendors now expect, that SSDs will become mainstream.
When this happens, NAND production will have to expand drastically. Currently, worldwide NAND production is on the order of 20 billion gigabytes per year (based on industry-wide sales of $5 Billion in 1Q 09, when NAND was $1/GB), while global production of hard disks is on the order of a hundred billion gigabytes per year (based on industry-wide sales of 137 million units in 1Q 08, while average drive size was at least 200GB). NAND production has more than doubled in each of the last few years, while hard disk unit production usually rises about 10-15 percent, with capacity doubling every year or so. For NAND to meet even a moderate fraction of storage demand, the rate of increase in production will have to rise.
The uptake of SSDs has been slower than expectations in years past, and it's clear that a wholesale replacement isn't happening any time soon. Nevertheless, the overall trends which make the SSD transition desirable and likely are still in place, and, at whatever pace, SSD penetration will continue to rise.
By: DocMemory
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