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What goes up, must go down: the popularity of flash memory in personal computers for storage is projected to decline in 2009 compared to previous years. Netbooks next year will utilize mostly traditional hard drives instead of NAND flash memory for storage, analysts from a memory market research company said on Wednesday.

It is a bit ironic, but when the first ultra low-cost personal computers (ULCPCs) hit the market in 2007, they featured specially-created solid-state drives (SSDs), previously an option for very expensive personal computers, instead of conventional hard disk drives (HDDs) in order to save several dollars. In the course of the previous few months a lot of netbooks got hard drives back and that trend will continue going forward, according to market intelligence company DRAMeXchange.

Asustek Computer’s Asus Eee PC with 7” and 9” displays and NAND flash-based storage played an important role in ULCPC market in the first half of 2008, but now many netbooks feature hard drives instead. Back in the first half of 2008 about 70% of ULCPCs sported SSDs for storage, but already in the second half of the year only 10% to 18% of low-cost personal computers are projected to utilize NAND flash for storage, which leaves 82% to 90% of the market to HDDs. The penetration of hard drives will continue to expand going forward, lowering demand for flash, claims DRAMeXchange.

The demand towards specially-developed SSDs for ULCPCs will slowdown due to the previous Microsoft announcement, which had loosen the limit of HDD capacity on ULCPCs from 80GB to 160GB. Currently the price gap between SSD and HDD is still large in terms of price per gigabyte: for every GB of MLC SSD manufacturers have to pay $4 to $5, which is far higher than $0.5 per GB in case of hard drives.

Therefore, the chances of SSD to enjoy rapid growth on the entry-level or mainstream markets are very small in the short term. Nowadays the SSDs are only adopted on very few high-end notebooks, such as Lenovo ThinkPad X300/X301 or Sony Vaio Z27 priced at $2800.

One of the main reasons for slow adoption of SSDs now is that most PC OEMs have doubts about the SSD in the standard notebook PC market, whether in price, reliability, or durability and under the trend of low price demand, HDD will still be the main stream storage device of laptops in the next two to three years, DRAMeXchange believes.

DRAMeXchange expects shipments for mobile ULCPCs to double to 22.7 million units in 2009.

Tags: SSD, ASUS, Eee

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