Solid State Disks (SSDs) have been available for many years, but it was not until the pricing of NAND flash chips came down enough in recent years to make them somewhat affordable to PC enthusiasts. Between 2007 and 2008, NAND pricing fell by up to 60% year after year.
Unfortunately for the NAND makers, sluggish sales resulted in a significant oversupply and fabricators were in turn losing money on their sales. SSD pricing finally levelled off after the first quarter of 2009, but with the tight economy, the NAND manufacturers were unable to invest in new equipment, resulting in demand outstripping supply.
With the growing SSD market and tight supply, flash pricing climbed significantly in the second quarter of 2009. This pricing is expected to remain flat until next year, by which time the NAND manufacturers will be able to reinvest their profits in new equipment to boost production and produce higher density products.
At present, online retail sales account for 40% of all SSD purchases, with equipment and computer makers accounting for the rest. Even still, SSD accounts for only a tiny percentage of computer sales. Analyst Gartner predicts that 3.6 million SSDs will be sold in the laptop market, 6.4 million in the desktop market and 0.8 million in the server market this year. SSD sales are predicted to reach $2.9 billion this year, compared to $1.3 billion in 2009, with most of the revenue coming in the enterprise market.
To help get around high NAND flash pricing, some vendors such as Intel, Kingston and OCZ have released low capacity SSDs targeted at enthusiasts to use them as boot drives, with bulker data such as photos, music, video content and documents stored on a high capacity hard disk. For most users, this configuration will result in a large increase in performance, as it’s mainly the applications and OS that get the main benefit from an SSD.
For prices to fall manufacturers need to drop their prices and only an increase in production will help cut SSD prices. This is not expected to happen until 2011, by which time manufacturers will be using fabrication processes of under 30nm and invested in additional manufacturing equipment.
An in depth article explaining the SSD pricing situation can be read on PC World.