SanDisk Sees 2012 as Inflection Point for Solid-State Drives

SanDisk Considers Its Consumer, Enterprise SSD Businesses Successful

by Anton Shilov
01/25/2012 | 10:07 PM

SanDisk Corp., a leading supplier of NAND flash-based products, believes that this year the demand for solid-state drives (SSDs) will start to grow rapidly as a result of lowering prices, better user experienced and maturity of technology. Even now SanDisk considers its consumer and enterprise SSD businesses a success, going forward the company expects further growth.


"We expect 2012 to mark the inflection point of SSD growth for SanDisk, with both the enterprise in client markets becoming strong contributors to our revenue growth in 2012 and beyond," said Sanjay Mehrota, chief executive officer and president of SanDisk, during the latest conference call with financial analysts.

Manufacturers of conventional hard disk drives, such as Seagate Technology and Western Digital, always blame SSDs of being overpriced and claim that demand from the end-users is low for them. Companies like SanDisk, OCZ, Corsair and others, however, report about growing demand for SSDs across the board and enjoy rather high margins.

"For the client SSD markets, the combination of the increasingly attractive price point and the significantly improved user experience is fueling consumers' transition to SSDs from hard disk drives. We have been successful with our small form-factor client SSD. [...] We have also began sampling our high-performance client SSDs at PC OEMs," added Mr. Mehrota.

SanDisk at present sells various types of solid-state drives, including relatively inexpensive SSDs for upgrades of netbooks or notebooks, higher-end consumer solid-state drives as well as enterprise-class SSDs that the company got with the acquisition of Pliant company back in 2011. So far SanDisk has not been a big supplier of SSDs in general, but the company seems to be ready for a fight this year.

SanDisk on Wednesday announced results for the fourth quarter and fiscal year ended January 1, 2012. Total fourth quarter revenue of $1.58 billion increased 19% on a year-over-year basis and increased 11% on a sequential basis. Total revenue for fiscal 2011 of $5.66 billion increased 17% from $4.83 billion in fiscal 2010.

SSDs accounted for "very small percentage of revenue" in 2011, but in the fourth quarter along 5% of the firms earnings came from the solid-state drive businesses (consumer and enterprise). The firm expects SSDs to account for around 10% of its revenue in fiscal 2013.