Bookmark and Share


Although NAND flash memory is getting more and more popular among device manufacturers for performance, reliability and low power consumption, it will never completely substitute traditional hard drives, according to Steven Luczo, chief executive of Seagate Technology. NAND flash is too limited when it comes to supply and therefore can be a nice complimentary tech, but not the primary storage technology.

The demand for hard disk drive (HDD) storage was 400 exabytes (exabyte = one million terabytes) in 2011 and that number will increase towards one zettabyte sometime in 2015-2016 timeframe and then to seven zettabytes by 2020. According to Mr. Luczo, there are no capacities to build that volume of NAND flash memory in the world today and there will be no appropriate manufacturing capacities in several years down the road. As a result, the vast majority of data - including that on the cloud services - will still be located on hard disk drives.

"Flash is a complimentary technology, it is not a competitive technology. [...] Our industry shipped 100 exabytes of data five years ago, 400 exabytes in 2011, and we will probably ship a zettabyte sometime between 2015 and 2016. A zettabyte is equal to all the data that has been digitized from 1957 through 2010. [...] We are going to ship that in one year. So whatever the architecture is, pads, phones, notebooks, ultrabooks, real notebooks, PCs, servers, clouds, one year, a zettabyte – that is all going to be on rotating mass storage," said Steven Luczo, in an interview with Forbes web-site.

Since semiconductor manufacturing fabs are much more expensive than magnetic media factories and facilities that produce other HDD components, it is financially easier to increase total storage capacity required by the world using hard drive technology rather than using NAND flash.

"If you are trying to grow exabytes, what’s the capital investment to grow exabytes? For flash, it is $10 billion at a chunk, which is what it takes to build a new chip fab. For drives, it is a fraction of that. If the industry had to grow from 400 to 500 exabytes, we would do that on $1 billion of capital. [...] [To get to a zettabyte, we need] about $1 billion a year for us, and then about $1 billion a year for WD. Versus $50 billion [for NAND flash makers]," stressed chief executive officer of Seagate.

While NAND flash clearly cannot substitute hard disk drives in general, it very well fits into various tablets, notebooks and other mobile devices. Nonetheless, as the demands for storage space are growing at a rapid pace, Seagate believes that hybrid storage systems - which combine performance of NAND flash and capacities of HDDs - will make more sense than pure solid-state drives.

Tags: Seagate, HDD, NAND, Flash, Business


Comments currently: 10
Discussion started: 04/18/12 02:06:15 AM
Latest comment: 04/19/12 06:47:06 AM
Expand all threads | Collapse all threads


They are losing market share from flash drives because 90% of computer users don't really need more that 500GB of hard disk drive space. Not to mention that pads and netbooks/ultrabooks don't use hdds or are better with ssds. So they doubled the prices on hard disk drives and lowered the warranty so they can be sure that in the next 1-2 years they are going to have the profits that they had in the past selling big volumes. The flood was less bad and more good news for them.
3 1 [Posted by: john_gre  | Date: 04/18/12 02:06:15 AM]

@john_gre, the numbers do not show that flash is over taking HDD at all. Not even close. You need to do a little homework or may be you are just doing little trolling of the boards. As storage demand continues to grow, NAND Flash share continues to be less than 4% of the total. Your comments about pricing are also amiss. HDD prices haven't doubled (in terms of avg sales price or ASP). And warranty terms were not arbitrarily lowered. The pricing & warranty today is based on negotiations with OEMs, ODMs, and to a lesser extent, the distribution channels. In other words the markets served by HDD makers. Nothing is done if they do not sign up for it. They are savvy business people. No one is holding a gun to their head because actually, their guns are much bigger. They understand supply and demand. Ditto the warranty terms. They know that if the warranty terms are relaxed the resulting opening up of factory yields would spur the return to former pre flood volumes faster. Finally, the reason that HDD pricing and gross margins will remain higher is due to the consolidation that has occurred and the huge pending demand for investment in new technologies required to meet demand. So good luck with getting by on 500GB, but don't expect to do very much with that. Just remember that there was a time not too long ago that 180GB seemed like a lot. I guess something prompted you to move on and your reference to 500GB is revealing. While 500GB on a laptop has been one of those sweet spots, meaning more shipped in laptops than other capacities, it isn’t going to just sit there. Of course, you may be the one guy reading these pages that does nothing but surf the net and do an email now and then. If so I wonder why you are here. I guess you could get by via adding a cloud account, but that doesn't count towards you statement. That just shifts your storage requirements to another physical location. By any approach, you are going to need more storage.Chances are great that it isn't going to be all NAND flash.
2 3 [Posted by: Simplifried  | Date: 04/18/12 05:15:33 AM]

You are accusing someone for trolling very easily. I am not going to do the some just because you believe that you have done better homework and you are expressing a different opinion.
Have a nice day.
2 2 [Posted by: john_gre  | Date: 04/18/12 06:16:21 AM]
- collapse thread

They say history repeats itself. It looks like this CEO is another example of that. I bet if he ran an abacus company, he'd have an argument why calculators will never become mainstream. Afterall, at one point a pocketable calculator was inconceivably expensive. 100 years ago, an abacus was sufficient to perform basic function for most people counting small number of items. This would be no different than a CEO of a company which manufactures CRTs would have announced 10-12 years ago the LCD/Plasma technology was too expensive to make it a worthwhile investment.

His short-sighted outlook by focusing on costs alone shows that he isn't grasping the future. It's not about short-term costs but long-term potential and profits for being ahead of the curve for consumer trends. Companies which do not adapt to future trends are destined to fail or become relegated to 1/10th-1/20th the size they used to be (see Sony).

Seagate can even do a joint venture now with someone and sell SSDs on the side, as complimentary to their mechanical drive business. He won't even do that. In 4-5 years when SSDs become truly mainstream, consumers will know of Crucial, Intel, OCZ, Samsung, and no one is going to care to buy a Seagate or WD SSD unless they bring something revolutionary. That's because the long-run market leaders in that segments with vast experience of making SSD controllers will be ruling the world.

Further, he is only sitting from atop of his pedestal while flash is still expensive. Flash drops in price about 50% every 18 months. In other words, it's like buying 2x the capacity for the same price every 18 months.

At this pace, SSDs will become large enough for most people to not even care about a mechanical drive in 5 years.

What's Seagate going to do then? Scramble to start investing billions in factories to make SSDs?

This CEO is simply fighting future trends and ignores that even if mechanical drives will still be needed, they will become a niche market segment in 10-15 years. Seagate cannot wait forever. And when that inevitably happens, Seagate will not just be able to become competitive overnight with then market leaders in SSDs. Most conspicuously, the CEO has no contingency plan for what would happen if his opinion regarding future trends is incorrect. He is betting his entire company on 1 format.

Or maybe this guy thinks people will actually care to store 10TB of 4-8K HD pr0n with lossless audio on their hard drives....
1 2 [Posted by: BestJinjo  | Date: 04/18/12 10:31:09 AM]
You're looking historically, and then assuming history will repeat itself. It's normally a good indicator, but not anymore.

For one, every time they shrink the lithography, they lower the amount of write cycles you can do before the cells are unusable. So, there's that problem, and so far no solution for it. Performance is also slightly lower as the lithographies shrink. So, you get a lot more for the money, but lose a little too.

The problem there is no solution for is you can't shrink lithography forever. We're approaching the lower limit, and you can't get smaller than atoms. So, shrinking is not an infinite type thing, and patterns of the last 30 years can not continue indefinitely.

Plus, human nature is such that it will always find a way to consume something if it's available. Did you ever think you'd need more than 4 Billion bytes of memory? Remember Bill Gates saying no one would ever need more than 640K? So, I would not bet against the hard disk, or against a CEO who has a lot more information than you do.

I'll make a prediction. Five years from now you'll deny having said no one will care about a mechanical hard disk in five years.
1 1 [Posted by: TA152H  | Date: 04/18/12 08:22:15 PM]

The thing is NAND Flash is not the only one solid state storing technology. In the next 3-5 years one of more advanced technologies will substitute Flash, having a much higher capacity factor per mm2 and speed. HDD is still a strong technology without any rivals at the moment, but I don't think we will see in in the next decade.
2 0 [Posted by: PsiAmp  | Date: 04/18/12 11:06:31 AM]

I believe HDDs will eventually be replaced but not for probably another five years or so for mainstream users.
1 0 [Posted by: beenthere  | Date: 04/18/12 12:02:19 PM]

Pompous rubbish. Spinning drives will definitely be replaced by faster tech. it's just a matter of time.
1 1 [Posted by: beck2448  | Date: 04/19/12 12:21:42 AM]

"Or maybe this guy thinks people will actually care to store 10TB of 4-8K HD pr0n with lossless audio on their hard drives.... "
Ummm.... yeah actually, Wouldn't mind! hahahaha
0 0 [Posted by: ozegamer  | Date: 04/19/12 04:00:14 AM]

So, let me get this straight Mr. Naive CEO. Your only argument to the future of your technology is there is too much demand for the storage you provide and building the factories (fabs) to produce the flash memory is too expensive? Seriously?

I'm not sure what business school you flunked out of, but my meager training suggests where there is a demand and a lack of supply, there is a potential for profit and savvy investors will respond.

At the end of the day, your product is an order of magnitude slower, less reliable, more expensive to operate, and based on technology that is older than most of your consumers.

For you to come out and make this kind of statement only shows your panic. Want to play some poker?

My prediction: Seagate (and WD) are dying the slow death of monolithic companies, and Steven Luzco's job may be at risk if he can't back up his words.

My advice: Find a way to make high density magnetic media more reliable and hope to maintain the 'tape market' you stole with nearline storage. You are becoming tape. How are those companies doing today?
2 0 [Posted by: TechnoButt  | Date: 04/19/12 06:47:06 AM]


Add your Comment

Related news

Latest News

Wednesday, November 5, 2014

10:48 pm | LG’s Unique Ultra-Wide Curved 34” Display Finally Hits the Market. LG 34UC97 Available in the U.S. and the U.K.

Wednesday, October 8, 2014

12:52 pm | Lisa Su Appointed as New CEO of Advanced Micro Devices. Rory Read Steps Down, Lisa Su Becomes New CEO of AMD

Thursday, August 28, 2014

4:22 am | AMD Has No Plans to Reconsider Recommended Prices of Radeon R9 Graphics Cards. AMD Will Not Lower Recommended Prices of Radeon R9 Graphics Solutions

Wednesday, August 27, 2014

1:09 pm | Samsung Begins to Produce 2.13GHz 64GB DDR4 Memory Modules. Samsung Uses TSV DRAMs for 64GB DDR4 RDIMMs

Tuesday, August 26, 2014

10:41 am | AMD Quietly Reveals Third Iteration of GCN Architecture with Tonga GPU. AMD Unleashes Radeon R9 285 Graphics Cards, Tonga GPU, GCN 1.2 Architecture