Asia Memory-Bad memories fading

TMT
Memory Devices Technology
8 October 2010
abc
NAND makers generally believe SSDs will take
off next year. Indeed, despite our argument that
absolute pricing of SSDs has now reached the
stage where more widespread adoption in
mainstream computing is possible, we believe
hesitancy in retail channels and per GB
comparisons by consumers has limited SSD
adoption to high-end notebooks, notably from
Sony, Apple, Dell (Adamo), HP (Envy) due to
high SSD prices on a per GB basis compared to
hard disks. SSDs up to 512GB are now available,
using 3xnm NAND, SATA interfaces and fast
data rates by using toggle-mode DDR NAND.
We expect SSD adoption to make faster inroads
starting next year based on falling NAND ASPs
and greater consumer awareness of the advantages
of SSDs, in part driven by soaring awareness of
tablets. We forecast SSDs to account for c16% of
total NAND demand by 2012e. SanDisk expects
SSD adoption to pick up in 2010, reaching c20%
bits shipped by 2012; the vendor expects market
acceleration in 2011e with cost reductions on the
2xnm process, with a ‘tipping point’ achievable
with 1xnm. Gartner forecasts SSD to approach
c20% of bit shipments in 2012.
Indeed, perhaps more than any other NAND
application, due to their very high capacities, SSD
adoption will depend on affordability, which is in
turn driven by technology advances.
Enterprise flash drives – huge upside
risk to NAND revenue forecasts
A major upside risk to our SSD forecasts is the
server storage market, offering disproportionately
high revenues and margins. Hynix sees enterprise
and high-end PCs driving demand for SSDs,
despite its scepticism over prospects for SSDs in
general this year. Key beneficiaries of this market
include Samsung, IMFT and Hynix, to be joined
next year by Toshiba. We admit that we do not
separately model the server NAND market in our
forecasts. But we hope to add value in this
analysis by illustrating the magnitude of the
upside risk to our forecasts.
SSD vendors continue to emphasize that the
enterprise market remains a key demand driver.
We estimate that server storage could account for
the equivalent of 12-17% of our 2012e forecast
global NAND revenue, and the equivalent of 20-
32% our forecast 2013e NAND global revenue.
These estimates assume SSDs account for 5% and
10% respectively of 2011-12e disk storage
systems and are based on SLC.
High-end server SSD storage is very expensive.
Despite this, data centres and corporates use SSD
due to 1) extremely fast data input/output,
especially important for cloud computing, 2)
small form factor (space), 3) low power
consumption. As ASPs fall, we expect SSDs will
replace HDDs as ‘front line’ storage, with HDDs
acting as inexpensive backup.
Server SSDs use SLC as it is generally about
twice as fast as MLC for read applications, and is
considered more reliable due to the fact it has only
one bit per cell. SLC NAND is more expensive at
about 3-3.5x premium compared to equivalent
MLC for 16-32Gb parts. Samsung currently
produces up to 64Gb density SLC.
By the time SLC NAND is incorporated into a
server storage system, prices/GB soar even more.
Server SSDs based on MLC NAND currently cost
about USD3-4/GB. But SLC-based storage
systems (not just simple SSDs) are about 10-25x
more expensive on a per GB basis. The high price
premium is justified by very high cost of using the
best high-density SLC NAND, but also reflects
systems that are optimised for high data transfer
speeds, high reliability and power efficiency, in
addition to close customer service. For example,
Oracle charges systems starting at cUSD46k with
480GB capacity (using 20 x 24GB flash modules)
using SLC, equating to cUSD96/ GB. Texas
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