Hot Flash: Flashtops Take On the Memory Market

SAN JOSE, Calif.—Flash memory continues to evolve quickly and grow more usable. The solid-state, rewritable silicon memory chips, which hold content without requiring power, are mostly known as gadgets the size of packs of gum that plug into computers USB ports to add extra storage. But thanks to recent fabrication breakthroughs, they have become much more versatile in a relatively short period of time.

Portable flash thumb drives that can hold up to 4GB of data are now readily available, and 8GB and 16GB versions aren't far behind, industry insiders said at the recent Flash Memory Summit at the Wyndham Hotel here.

Consumers also can expect to see the first 32GB, three-quarter-inch-thick flash-based laptops in the Western and European markets within a year. Samsung previewed its first flash-driven laptop at the CeBIT conference in Hanover, Germany, in March 2006, and launched the first batch of consumer units—dubbed "Origami"—in May in Japan and Korea.

These first "flashtops" feature a 32GB, 1.8-inch solid-state drive created by Samsung engineers. At the time, however, flash memory was selling for about $30 per gigabyte, so the 32-GB drive would have cost $960 just for the memory itself. The flashtops' initial retail price was about $3,700.

Prices have come down slightly since spring, and they are expected to continue to decline as fabrication factories come up with more efficient ways to manufacture the silicon wafers. But flashtops will remain relatively expensive for the next few years, industry insiders said.

These new laptops undoubtedly will appeal to only a certain slice of the overall market—those not planning to use their notebooks to store a lot of music, video, photos or other space-hogging content. People who will use flashtops will be those who simply want to utilize basic functions: to cruise the Internet, use e-mail, and write and store word processor or spreadsheet documents.

But the faster performance of flash-based laptops (at 53MB per second, NAND flash reads data about 300 percent faster and writes 150 percent faster than a conventional laptop hard drive), silent operation (no cooling fans needed), lightweight form factor and much-improved battery life are hard factors to ignore.

Intel also said it will begin adding flash chips to its standard laptop innards in 2007, mainly to speed up startup times, run BIOSes and lower power consumption by conserving hard drive operation.

Business wasn't flashy until recently

Flash memory was a successful but unspectacular sector of the IT market until about four years ago; now it is big business, pushed into the limelight by fast-selling MP3 players and rapidly improving fabrication methods. The NAND—a newer, higher-end version named after the mathematical term "not-AND"—flash markets total revenues in 2005 were $10.8 billion, up a whopping 63 percent from 2004.

Analytics firm iSuppli, in El Segundo, Calif. estimates that the market will grow to $16.8 billion in 2006 and $26.2 billion in 2009; Gartner, in Stamford, Conn., and IDC, in Framingham, Mass., are pretty much in agreement.

NAND flash bit shipments grew at a 179.6 percent compound annual rate in the six-year span from 2000 to 2005, or at least three times the 51.2 percent CAGR for DRAM (dynamic RAM) processors, Denali Software's Lane Mason has reported.

Flash chips are becoming a big side business for the greater Intel community; Intel's 2005 partnership with Micron Technology to produce NAND chips resulted in an immediate $500 million order from Apple Computer for its flash iPod Nanos.

"Flash memory is growing faster than any major market product in the history of semiconductors," said Jim Handy, director of non-volatile memory services at Semico, in Phoenix.

"In essence, NAND went from its first $100 million year [2000] to over $10 billion [in 2005] faster than any prior technology. DRAM took about 17 years to do that," Handy told eWEEK.

The demand for flash memory is growing "like crazy" and is poised for more growth as NAND chomps away at the markets for all other sorts of media, Handy said.

"Soon CD-R and CD-RW [disks] will go the way of the floppy, and camcorders will convert from disc or tape to NAND," Handy said. "SanDisk has trials going on to replace textbooks with NAND, so even paper is threatened."

However, it's still early in the game for NAND, Handy said.

"NAND revenues will outstrip DRAM revenues in 2008, and NAND already ships more gigabytes per month than DRAM," he said. "DVDs are next."

Joe Unsworth, who's been analyzing the NAND flash memory market for Gartner for eight years, offered a report at the Flash Memory Summit that indicated a 4 percent shortage of chips in Q4 2006 due to the overwhelming demand from device manufacturers.

"2007 really depends upon Apple," Unsworth said. "They've been talking about 10, 12, 16GB flash drives in their iPods. I think they have to come out with those."

What the hard drive people have to say

Flash is getting so big so fast, said former Apple and IBM executive Jay Elliot, founder and president of Migo Software, in Redwood City, Calif., that "the hard drive manufacturers ought to be getting worried."

Well, they might at some point, but that point isn't now.

One speaker at the summit said he'd done some research and figured that, as a result, a memory cache of 48GB should be "more than enough" capacity to store all a businessperson's important documents, plus e-mail and a modest amount of music and video. That kind of capacity is well within range of NAND flash.

At least one major disk drive company didn't think much of that assessment.

"Seagate said that the idea [that] 48GB of storage was enough for the average person's personal needs was news to them," Flash Memory Summit coordinator and producer Jay Kramer told eWEEK. "Of course, they believe there's an insatiable appetite for storage everywhere, and that may be true. That's certainly what they want to see."

Andrew Lim, director of market development at Seagate Technology—which happens to be the world's top producer of computer disk drives—told eWEEK that he believes the market is so wide open for IT-based applications that there will be plenty of room for both flash-based and spinning-disk storage products for years to come.

"It all depends on what you're using the capacity for," Lim said. "If you're using it for video games, high-definition movies, a 3-D geopositioning system in your car or lots of music, then you are definitely going to need a disk drive. Flash simply doesn't have the [capacity] for those kinds of uses."

Next Page: New uses for flash.