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Business | September 19, 2012

SSD prices to reach Sweet Spot

According to DRAMeXchange, the effects of both the economic environment and the typically slow second quarter has led to an underwhelming 2Q12 SSD market performance.
From the price standpoint, the mainstream MLC NAND Flash prices, for the past two quarters, have dipped by 17% and 18%, respectively. Because of the less than expected revenues, even the transition to the cost effective 20nm processes cannot ameliorate the amount of losses that were incurred. Along with the plummeting NAND Flash prices, SSD prices have been experiencing a steep decline, affecting a large number of manufacturers in the process.

For the retail SSD, a large part of the vendors are promoting the new SATA3 products, using drastic pricing strategies to stimulate market performance. At the same time, various new SSD product bundles – including mixtures of intermediate, advanced, or industrial level SSDs-- are being introduced into different sectors of the market as a means of minimizing and diversifying potential business risk.

It should be noted that with the weakening global economy taking a toll on SSD’s marketing impact, many buyers are considering waiting for the long Chinese holiday season, along with Thanksgiving and Christmas, before making a move. All things considered, 2Q12 SSD retail market can be said to have dropped below manufacturers’ expectations.

Although the second generation ultrabook’s and Intel’s Ivy Bridge platform have already made their way into the market, ultrabook sales have been worse than the PC OEMs originally anticipated. According to TrendForce, the ultrabook’s poor market performance is affected not only by the dwindling NB market, but also by the high margins as well.

With the use of SSDs, ultra slim panels and aluminum casings, the ultrabook retail prices have yet to find their sweet spot. Taking the aforementioned factors into account, TrendForce has lowered the predicted 2012 ultrabook shipment quantity to around 15 million units.

In order to suit proper market needs, major PC OEMs are planning to promote ultrabook models supporting SSDs with lower memory content. According to TrendForce, in 2H12, over 85 to 90% of the new ultrabook may begin using 24GB/32GB SSDs. The ideal plan is to promote for price-friendly ultrabook products that suit consumer needs in the near future.

Even though the general economy has been negatively impacting the market in the short term, compared to the growth in the previous years, SSD has been benefiting from the rising interest and development towards ultrabooks. Other than the 128GB/256GB SSDs, the smaller capacity SSDs are now being more widely used in competitively priced ultrabooks.

While prices of these storage devices have as a result undergone a quick decline during 1H12, the price drops have helped to stimulate consumer demand in the process. Considering how ultrabooks are sure to become a major highlight within the PC industry from 2H12 to 2013, TrendForce believes that the worth of PC-grade SSDs this year can break the $3 billion USD mark.

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