Market Watch

Big Year for SSDs Expected in 2013


Windows 8 Ultrabooks, lower NAND prices and consumer interest sparking growth

Despite lukewarm PC sales trends, solid state drives (SSDs) remain a bright spot in the storage world in 2013, with revenue forecasted to increase to $10.9 billion and unit shipments to increase to 83 million, according to a new IHS iSuppli SSD & HDD Storage report from information and analytics provider IHS.

Continued NAND average selling price (ASP) erosion has helped establish new consumer price expectations for SSDs, attracting deal-seeking enthusiasts, plus an increasing number of PC OEMs. The newest wave of SSD-equipped Ultrabooks based on the Windows 8 operating system is generating some interest, while the slow SSD burn in the enterprise is picking up steam thanks to product introductions from major vendors and start-ups.

Not only did 2012 finish with a more than a 120 percent increase in shipments and a 50 percent boost in revenues, it marked a year when the industry took its most aggressive steps yet to position itself for success down the road, including several acquisitions and product launches.

As a result, IHS iSuppli expects this rapid growth to continue almost unabated in 2013, as Ultrabooks and cache SSDs finally start to catch on with consumers. With a compound annual growth rate (CAGR) of 34.7 percent predicted between 2011 and 2016, SSDs will continue to grow to reach $21.0 billion by 2016.

Still same potatoes compared to HDDs

Yet, such impressive projections could still undershoot the potential of NAND storage. Even a forecast of 240 million drives in 2016 accounts for just one quarter of all drive shipments.

As NAND rides the cost and scale curves, from 1x and 1y nm lithographies to TLC maturity to 3D structures and 450mm wafers, the attainability of solid-state PCs, servers and storage arrays becomes ever more practical. Recent developments around non-volatile memories like STT-RAM and resistive RAM hint at sustained performance improvements post-NAND.

While Ultrabooks have underperformed to date, in a world where real-time media access and data analysis is getting more crucial, upside risks to the IHS iSuppli forecast are far more numerous.

Inherent in the rush of company positioning are questions about application segmentation and brand differentiation.

What are the prospects and impacts of new interfaces, such as NVM Express, SCSI Express, and even UFS? How are evolving uses and form factors affecting SSD demand from consumers and PC OEMs?

Will SSDs be able to continue their rapid price declines, through cuts in costs or margins or improvements in manufacturing scale? And will storage vendors capitalize on recent acquisitions to outflank startups in the battle for the vast untapped enterprise market?

In terms of pricing, availability, standardization, and compatibility, NAND storage has taken great leaps over the past 12 months and we expect this trend to continue in 2013.

Read More >> Strong Finish to 2012 Propels SSD Industry into 2013