RealTime IT News

Little Disk Drives to Reap Big Chip Sales

Small form factor and mobile PC hard disk drives (HDD) will represent a full quarter of worldwide semiconductor sales through 2009, thanks to snowballing interest in MP3 players, handheld computers and some smartphones.

Research firm IDC said chip revenues in the small form factor HDD arena will balloon at a 39.4 percent compound annual growth rate (CAGR) through 2009.

Shane Rau, program manager at PC and Storage Semiconductors, said the growth in demand is coming from emerging consumer markets, where the up-tick in storing digital music, movies and photographs has skyrocketed in 2005.

However, HDDs face stiff competition from the rising tide of NAND Flash memory, which is being used in products such as the iPod Nano and USB drives.

Rau said that HDD semiconductor suppliers, which include Marvell, Agere and Texas Instruments, must be mindful of making enough chips to accommodate the growth in "volatile consumer markets," where consumers are picking up products that use NAND Flash memory storage as an alternative to HDDs.

NAND Flash is used in certain Apple iPods and USB drives but doesn't store as much data as small form factor HDDs are capable of storing. Even so, Rau said the arrival of the iPod has proven to be a disruption to the dynasty that small form factor HDDs were enjoying.

"The disruption came to a head when the iPod Nano incorporated NAND Flash instead of a small form factor drive," Rau said. The question becomes how much will NAND be able to penetrate into what formerly was small form factor drive's territory. There needs to be some settling as to which one will win."

Rau said IDC believes NAND Flash memory will do well in devices with capacities of up to about 10 gigabytes.

But HDDs will likely rule in devices that require higher storage capacity than NAND can support. The new iPod video player uses a small HDD.

"To the extent that video penetrates portable devices like the iPod Video will probably determine the small form factor drives," Rau said. "The question is: how popular will portable video be?"

Still, a cursory look around the industry shows the level of NAND support and adoption growing.

Just last week, Intel and Micron agreed to form a new company to manufacture NAND Flash memory.

IM Flash Technologies, LLC, will manufacture products for Micron and Intel, two chipmaking giants with enough capital, intellectual property and personnel to snatch a good portion of the NAND market.