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Electronics Production | October 09, 2009

Enterprise sales take up Notebook Slack in the Solid-State Drive Business

Although sales of Solid-State Drives (SSDs) for notebook PCs suffered a major setback in 2009 because of soaring memory prices, the enterprise market is more than compensating for the lack of growth, causing overall SSD market revenue to rise by a factor of seven this year, according to iSuppli.
“The dramatic rise in the cost of NAND flash memory in the second quarter caused prices for SSDs to jump, making them uncompetitive with Hard Disk Drives (HDD) and derailing their acceptance in notebook PCs,” said Michael Yang, senior analyst for storage and mobile memory at iSuppli. “NAND flash is the critical component of an SSD, accounting for about 90 percent of its value. However, for enterprise data centers seeking to expand their capabilities while lowering their overall power consumption, SSDs remain an attractive option.”

On the strength of rising demand from the enterprise segment, total SSD revenue in 2009 will soar to $883 million, up from $127 million in 2008. Unit shipments will increase to 5.8 million units, up from 1.4 million in 2008.

While this is a robust year-over-year upsurge, SSD vendors are anticipating that 2010 and 2011 will be exceptionally strong growth years as data centers and IT computing infrastructures ramp up their adoption. Furthermore, corporate adoption should pave the way for an eventual resurgence in the acceptance of notebook PCs by driving down overall system prices.

iSuppli forecasts the total market for SSDs will climb to $10.8 billion by the year 2013, rising at a whopping Compound Annual Growth Rate (CAGR) of 142.8 percent from $127 million in 2008. The unit forecast is equally as impressive, showing SSD shipments reaching 65.2 million by 2013, with the CAGR rising by115.6 percent from 1.4 million units in 2008.

The attached figure presents iSuppli’s forecast for global SSD unit shipments and revenue for the period of 2008 through 2013.



SSDs make their case
The success of SSDs in the enterprise segment has bolstered the position of suppliers that tout the benefits of the technology compared to traditional HDDs. These advantages include increased Input/Output Operations Per Second (IOPS), power usage reduction and smaller footprint. All these factors lead to significant cost savings.

These benefits are so great that more than a dozen startups have burst onto the scene, seeking to take advantage of the potential of the technology. Each of these companies offers SSDs with enhanced capabilities via different architectural solutions.

However, while the accelerated ramp-up of the enterprise sector is important to SSD vendors, further development in features, benefits and marketing campaigns are needed in order for the PC segment to see increased SSD adoption. PC acceptance will also support the efforts of the SSD vendors, kick-starting technology development in the area. Then, as SSDs improve, they will become a more compelling replacement for the less expensive HDDs.

The improvement of SSDs may help vendors answer some of the most difficult questions facing the technology. Would consumers pay a cost premium to cut boot-up time from five minutes to two minutes? Would they also be willing to pay more in order to get faster access to programs, games, videos and other content?

“What’s needed is an SSD company that understands how to relate to the PC consumer, and one that can put together a campaign attractive to users beyond just the price tag,” Yang said. “When that happens, this market will surge upward.”

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