by Debra Vogler, Senior Technical Editor, Solid State Technology
NAND flash memory manufacturers have made no secret about their rosy outlook for solid-state drives (SSDs) — prospects appear bright, driven by growth in consumer applications and notebook computers, along with decreasing cost/GB and increasing densities. [See related article: “Samsung makes an enterprise play with SSDs”.] However, such elation may be premature, as evidenced by remarks at a recent “breakfast with the analysts” event hosted by the International Disk Drive Equipment and Materials Association (IDEMA, Nov. 7, Santa Clara, CA), suggesting that there are serious obstacles still in the path of SSD adoption before the technology can make greater inroads into the computer sector.
Some of the hurdles that SSD makers will have to overcome as they make their moves into notebooks and PCs include cost (i.e., are advantages worth the premium pricing), low capacity, questionable specifications, and OEM relationships. “Will PC OEMs accept price increases when flash supply is tight?” posed TrendFOCUS president Mark Geenen. “There is zero precedent for that with HDDs [hard disk drives].”
“Until this year, it was nearly unprecedented that HDD companies could raise prices to PC OEMs, even when there were allocation conditions,” Geenen told WaferNEWS in a conversation after his talk. “Conversely, memory and flash makers readily raise or lower prices in a purer economic model. The question of whether flash/SSD suppliers will be able to maintain the same pricing tactics comes to the fore when facing HDD suppliers — battle-scarred veterans who know how to compete, how to manufacture, and how to hold customer interest in very high volume markets.”
Summarizing his thoughts on the legitimacy of the threat SDDs pose to HDDs, Geenen said that the short-term impact to HDDs is not significant, but longer term, the threat grows for the smaller HDDs. “Today’s winner is HDD; SSDs aren’t competitive today,” he stated. “For SSDs to displace HDDs in meaningful volumes, the cost/capacity model must change dramatically.” Currently, he explained, SSDs in notebook PCs are generally 32GB (or sometimes 64GB), roughly 1/2 to 1/4 of the capacity offered by mainstream (not leading-edge) HDDs, and the prices range from 5x-10x higher. “PC demand is highly price elastic, so passing on the cost of SSDs to consumers vastly reduced the available market.” He acknowledged that “an exceedingly small number of people might buy a higher priced SSD-enabled PC, but not enough to negatively impact HDDs.” Looking ahead, Geenen observes that as flash capacities continue to increase and prices fall, “probably faster than like rates in HDDs,” the cost/capacity gap will close, and therefore attract a wider available market.
Making the case for HDD growth in the computing market (Fig. 1a), Geenen observed that a mobile society still needs some kind of PC — i.e., a screen you can see and a keyboard, “not a small hybrid device. Desktops are not dead.” He also noted that the traditional PC market is still growing, although seasonality is “here to stay.” Geenen offered what he called a “conservative” projection of ~4-5% unit growth in 4Q07 (Fig. 1b), adding that “only once in the last 10 years has there been double-digit growth in 3Q and 4Q.”
Geenen also projected a 20%-30% unit growth for each of the next five years in the external storage market, in part because of the growing need for back-up content storage. External 2.5″ HDD storage is also gaining ground as it is used in both computing and consumer electronics. The exponential growth of video and music content each year is another driver for external HDD capacity, he noted, because a much higher capacity is required for it than for embedded HDDs.
As the holiday shopping season swings into high gear, Geenen did not offer the most cheery observation with respect to the consumer electronics sector. “Game consoles and HDDs have hit a speed bump, and while DVR/PVRs are solid in the US and Japan, their penetration is slower elsewhere,” he observed. Consumer electronics became the future of HDDs, but at the end of 2006 the numbers didn’t stack up and were disappointing, Geenen told attendees. Apple’s iPod put the HDD on the PMP (personal media player) map a few years ago, but “at that time, the majority of PMP/MP3 players in western countries were HDD-enabled,” Geenen said. “Now, as flash capacities grow while pricing remains a paramount concern to device buyers, HDDs cannot compete in low-capacity, low-priced designs. Moreover, battery life and durability of the unit is enhanced when employing flash.”
With the above comments in mind, Geenen observed that the PMP market (e.g., iPod, other MP3 players) is rapidly fading for HDDs, and unless there’s a quick turnaround, this is a market owned by flash memory. “Computing still drives the HDD market, not consumer electronics,” he said. The TrendFOCUS forecast shows that in 2007, <20% of all HDDs shipped will be used in consumer applications, and in 2011 this number will increase to about 24% of the total. — D.V.