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Flash Price Trends Don’t Favour Rapid Adoption of SSDs

Spot price of an 8Gb chip dropped from $43 in January, 2006, to $10 in December of $2006, according to market tracker DRAMeXchange. Market research firm iSuppli has forecast NAND flash prices to drop approximately 35% to 40% in the Q1 2007 compared to the Q4 2006, which means that 8Gb flash chip could cost as little as about $6 (at press time contract price of one 8Gb multi-level cell [MLC] chip was roughly $6).

32GB solid state drive requires either sixteen 16Gb NAND flash chips or thirty two 8Gb NAND flash devices. Considering the forecasted minimal price of 8Gb NAND flash chip in late Q1, it means that memory alone for a 32GB SSD would cost about $190 (financially, there is no difference between the number of chips, as 16Gb cost approximately two times more compared to 8Gb MLC) and that the final price of an SSD would still be well over $300.

If we take a look at the current NAND flash chips pricing and compare it to the price of SSDs, we will notice that the actual price of NAND flash devices accounts for 50% to 60% of an SSD price.

1.8" solid state drive from Sandisk. Click to enlarge

It is also more than questionable whether it makes sense to install 32GB solid state drive. Microsoft Windows Vista Home Premium requires more than 10GBs to install itself alone and it would be better to save at least 5GBs for the operating system. A modern game also wants 4GB – 5GB of hard disk space and at the end 32GB may not be enough for those enthusiasts who are eager to spend additional money on performance of storage solution.

That said, 64GB SSD is a more likely candidate to appeal to masses, but it requires thirty two 16Gb chips (or sixteen 32Gb chips, but financially there is no difference at least now), each of which is priced at $11.88 at press time, according to DRAMeXchange, which means that memory for a 64GB solid state drive currently costs up to $380.

1.8" solid state drive from Sandisk without cover

If the price drop pattern for 16Gb chips keeps the forecast, e.g. 35% quarter-over-quarter, and the cost of memory devices continues to account for about 55% of an SSD price, then it will take many quarters before 64GB SSDs can reach the masses. In order to cost $250, 64GB SSD should incorporate 16Gb memory devices that cost $4.28, which is going to happen in late Q3, whereas if we want to get a 64GB for $200, then we will have to wait till late Q4. Considering the fact that flash prices recently went up, the aforementioned timeframes may be delayed by a quarter (e.g., 64GB SSD will cost $250 in Q4 and $200 in Q1 2008).

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