Flash memory is a wonderful thing: It's shock-resistant, it doesn't have moving parts, it uses battery power more efficiently than disk drives do and its price is crashing. Even so, it isn't likely to replace hard drives on mainstream PCs anytime soon.
Financial analysts are watching, among other things, to see how far Apple expands its use of flash memory in lieu of disk drives in iPods. The continuing decline in flash memory prices also is renewing speculation on when PC makers may start producing mainstream laptops and notebooks -- not just niche systems -- that include the technology.
Such systems are beginning to arrive. Last month, Fujitsu Computer Systems announced two laptop models with NAND flash memory instead of traditional hard drives, one supporting 16GB and the other 32GB. Fujitsu touted flash memory's lack of drive heads that could crash and other moving parts that could fail, saying that solid-state drives based on the technology "are noise-free, generate virtually no heat and weigh half as much as traditional notebook hard drives."
What may help push more systems with solid-state storage technology to market is the ongoing decline in flash prices.
The Semiconductor Industry Association (SIA) reported Monday that worldwide sales of semiconductors amounted to just over US$20 billion in February, a 4.2 percent increase from the same month a year ago. But sales declined 6.5 percent from the total in January.
A seasonal decline in semiconductor revenue isn't unusual. With more than half of all the semiconductor products destined for use in consumer devices, the industry sees its biggest sales season in the fall, said John Greenagel, an SIA spokesman. But he added that the industry group thinks intense price competition is affecting revenue. "There is just a very competitive market," he said.
That extends to flash memory. Indeed, Mark DeVoss, an analyst at iSuppli in El Segundo, Calif., said that in 2005, it cost about 5 cents for 1MB of NAND flash memory, which is primarily used in consumer devices. This year, Voss said, iSuppli expects the price of flash memory to fall to seven-tenths of a cent per megabyte.
And the flash market is getting more competitors. For example, Intel last month introduced its first solid-state device, with a storage capacity of up to 8GB. But flash memory is still seen by analysts as being too expensive for use in notebook PCs that have 40GB or larger disk drives.
Robert Semple, an analyst at Credit Suisse Group, said in a report issued last month that he doesn't expect the per-gigabyte price of NAND flash memory and disk drives to intersect "at mainstream capacities in notebooks" until sometime beyond 2012. In his analysis, Semple used estimated costs of $69.99 for an 80GB hard drive versus $40 for 8GB of flash memory.
And the storage-capacity sweet spot for notebook disk drives is a moving target. "We believe the actual sweet spot in 2010 will be closer to 250GB," wrote Semple.
In addition, he voiced some caution in the report about NAND technology's ability to manage data-write demands on PCs. "Simply put, data is more read-orientated within cell phones and MP3 players and less write-intensive, which plays to NAND's strengths," Semple wrote. "Managing data within a PC is inherently more difficult, and to date, NAND has not performed as well in these environments."
In the consumer market, the situation is a little different. Prudential Equity Group LLC, in a report released in February, said that Apple's iPod road map could boost flash revenues, and that Apple may transition to NAND flash memory by late this year in video iPods that now use 1.8-in. hard drives.
Power savings would be a major reason for Apple for use flash technology. According to Prudential's estimates, a 30GB disk drive can store about 40 hours' worth of videos but only supports 3.5 hours of battery life for watching them. Replacing the hard drive with flash would allow for a 60 percent increase in battery life, providing 5.5 hours of video playback, Prudential said.
Flash memory prices declined 60 percent annually over the past two years and fell another 30 percent in this year's first quarter, according to Prudential.
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