Seagate, SanDisk See SSD Sales Soaring Soon
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Seagate Technology and SanDisk are two companies that shouldn't have too much in common, but they do share one area of mutual interest: solid-state drives (SSDs). Both companies discussed their SSD efforts during earnings calls earlier this week and shed some light on where they think the market is headed.
Seagate (NASDAQ: STX) is the world's largest maker of hard disk drives, but has kept things mum on the SSD front beyond saying it would release some drives aimed at servers that would be optimized for endurance, reliability and performance.
On the earnings call with analysts, William Mosley, Seagate's executive vice president of sales, marketing and product line management, discussed the company's efforts briefly.
"Seagate's SSD program is progressing on schedule. We began production and shipped in September and customer response has been very favorable," he said.
"We are actively engaged with our enterprise customers and are developing additional products with the entire spectrum of interfaces and performance options required to fully serve this market. Our product development plan enables us to emphasize endurance, reliability and performance for SSDs at the same level of enterprise expertise customers have come to expect from Seagate," he added.
However, there was no further discussion on the call regarding SSD plans. The current SSD drives have a Serial ATA (SATA) interface, but the company is believed to be working on faster interfaces like Fibre Channel or Serial Attached SCSI (SAS) for its SSD drives.
Bob Merritt, principal analyst with Convergent Semiconductors, said it's good to have a giant like Seagate in the SSD market, and that the firm took a slow, steady approach.
"It's great for Seagate to be getting involved and great for the NAND side to see someone of Seagate's knowledge moving into that area," Merritt told InternetNews.com. "This new interface to the NAND is a heck of a long way from the interfaces in SSDs in the PC. SSD's architecture is being changed to accommodate the particular requirements of NAND. So I would expect to see more of that."
Slow growth, please
Following a great quarter that exceeded expectations, SanDisk (NASDAQ: SNDK)'s chief executive, Eli Harari, told analysts that SSDs would not hit the mass market until 2011 or 2012, and that was a good thing due to short supplies at present.
"If SSD were to take off anytime in the next six months, it would exacerbate the supply situation," he said. "We do believe that SSD is going to be a very important market and we do believe that in around 2011, 2012, the industry will not have sufficient supply to meet the demand from SSD that will be developed by that time."
ASP pricing for memory is pushing out SSD adoption, Harari added, though he said he feels that's just as well because the market is in good balance at the moment. If SSD were to take off anytime in the next six months, Harari said it would exacerbate the supply situation.
He also acknowledged that reliability is hit or miss from one vendor to the next. "You've seen the issues that we've had with our third generation, but frankly I believe that all the major manufacturers of SSD are seeing similar birth pains. But we know what the issues are and we know what needs to be done architecturally, and NAND will be up to the task. I have no doubt about that, that on a monthly basis, we are making progress, improving our performance and our quality and reliability, and so do our competitors," he said.
Merritt said there has been a problem with NAND supply because there hasn't been a new fab brought on line in two years, and it takes two years to three years to build a new plant. That's why Apple can literally wipe out the market for a few weeks when it buys vast amounts of memory for a new product launch.
Between the economic collapse of 2008 and the oversupply of DRAM, memory makers were hardly rolling in money. Thanks to the recent shortage, prices have spiked.
"I think NAND suppliers are trying to tip toe around the fact memory capacity is tightening and memory makers are making progress filling up their bank accounts, but no one wants to make an issue of shortages," Merritt said.
"You hate to see a market start and get shut off because of a lack of parts," he added.