Tech Hardware Supply Chain - Gazhoo

Bhavin Shah
(852) 2800-8538
bhavin.a.shah@jpmorgan.com
Netbooks are emerging as
another application for NAND
demand, but upside potential for
NAND demand from Netbook will
be capped due to low
penetration rate, in our view.
Despite impressive growth,
NAND for PC will only account
for approximately 13.9% in
2009E due to its low-base effect
50
Asia Pacific Equity Research
20 April 2009
Table 27: SSD v/s HDD features comparison
2.5º SATA 3.0Gbps SSD 2.5º SATA 3.0Gbps HDD
mechanism type Solid NAND Flash-based Magnetic rotating platters
density 64GB 80GB
weight 73g 365g
performance
(SLC) Read: 100MB/s, Write: 80MB/s
(MLC) Read : 90MB/s, Write : 70MB/s
Read: 59MB/s, Write: 60MB/s
active power consumption 0.4W 3.86W
operating vibration 20G (10~2000Hz) 0.5G (22~350Hz)
shock resistance 1,500G for 0.5ms 170G for 0.5ms
operating temperature 0ºC to 70ºC 5ºC to 55ºC
acoustic noise None 0.dB
endurance (SLC) MTBF > 2M hrs.
(MLC) MTBF > 1M hrs.
MTBF < 700k hrs
Source: http://www.samsung.com/global/business/semiconductor/products/flash/ssd/2008/product/chart.jsp.
NAND flash versus HDD
As highlighted in our previous Global Memory Market report, the price gap between
SSD and HDD is one of the key swing factors in determining the timing of the fullfledged
launch for SSD. Due to meaningful pricing gap between HDD and SSD, the
encroachment of SSD would be limited for a while. However, if MLC-based SSD
emerges as mainstream, the speed of narrowing the pricing gap could accelerate,
pulling in the SSD adoption in the PC space, in our view.
Table 28: BOM trend of 64GB SSD (SLC-based)
US$
2007 2008E 2009E 2010E
80GB HDD price trend
80GB HDD (2.5'') price (US$) 53 45 37 33
Y/Y change (%)
64GB SSD price (SLC-based)
-18% -15% -18% -11%
64GB SSD price (US$) 1,125 399 180 90
Y/Y change (%) -65% -55% -50%
64GB SSD ASP/80GB HDD ASP
Source: Company data, J.P. Morgan estimates.
8.9 4.9 2.7
Incremental NAND demand from netbook to be limited
With some netbook models adopting SSD instead of HDD, netbooks are emerging as
another application for NAND demand. We, however, expect the upside potential for
NAND demand from netbooks to be capped due to low penetration rates. As of 3Q08,
it is estimated that roughly 30% of total netbooks adopted SSD instead of HDD.
Despite the substantial advantages of SSDs including lower power consumption,
faster processing speed, and less weight, we believe that netbook makers will not
increasingly adopt the low-density SSD given its limited storage space. We estimate
the penetration rate of SSD in netbooks will likely stay at the current level and, hence,
SSD-adopted netbooks will account for 1.5% of total NAND demand.
We expect solid growth but a meaningful take-off in 2010
In light of the above consideration, we expect that NAND application in PCs will
record robust growth of 361% Y/Y in 2009. Despite this impressive growth, however,
the use of NAND in PCs will only account for approximately 13.9% in 2009E due to
its low-base effect. We thus believe that the meaningful launch of SSD will only
occur in 2010 at the earliest. Toshiba is the most aggressive in promoting the SSD
business. SSD multi-level NAND development has been a multi-team effort,
encompassing not only the semiconductors segment, but also R&D engineers and
technological experts in the PC and HDD segments.