Analysts say we are headed for a flash memory price crash

Cal Jeffrey

Posts: 2,790   +699
Staff member

Jim Handy, a market analyst with Objective Analysis, predicts that the flash memory industry is headed for a “downward pricing correction” in 2019, if not a full-on collapse. If prices crash, we could be looking at NAND prices as low as eight cents per gigabyte. At last week’s Flash Memory Summit, Handy said that even without a full collapse, the downturn will be the biggest price correction in the history of semiconductor products.

The Register reports that currently, NAND flash prices are hovering around $0.30/GB. A 66-percent dip would bring SSDs into a more competitive range to HDDs causing cannibalization leading to a downturn for some manufacturers like Seagate and Western Digital.

Manufacturers could allocate more NAND to producing DRAM, but this, in turn, would result in an oversupply in that sector.

“Some 70 percent of total industry flash is 3D NAND, with the remainder the older 2D or planar NAND. This manufacturing capacity could be migrated to making DRAM instead – this could result in DRAM capacity over-supply in the future.”

Howard Marks, chief scientist with Deep StorageNet, who also spoke at the summit said that a five-times differentiation in the cost per gigabyte between enterprise SSDs and HDDs would be sufficient to cause cannibalization.

“[Currently,] enterprise SSDs stand at ~15-17x $/GB premium relative to nearline/high-cap enterprise HDDs,” Marks pointed out.

If Handy’s predictions pan out, the industry could be in for a 25-percent price reduction in NAND and a 75-percent drop for nearline/high-cap SSDs. This could result in significant stock valuation shifts for some manufacturers.

For instance, Seagate’s revenues come primarily from disk drive and nearline/high-cap sales. Currently, its shares are selling for $51.42. A Goldman Sachs analyst told The Register, cannibalization could cause its stock to dip to around $44/share.

Western Digital derives about half its revenue from flash, so is less susceptible to disk cannibalization. “However, it is more exposed than Seagate to a NAND pricing collapse,” said the analysts.

No matter what it looks like the SSD consumer will be the winner in the end. I, for one, welcome lower SSD prices.

Permalink to story.

 

Hammayon

Posts: 138   +47
I just bought a new 500 GB NVME WD Black with read write of 3,400/2,500 MBps and I paid $0.34/GB.

I just freakin bought it. Gonna install it soon.

Damn it

Oh well, at least I won't have to upgrade for years
 

Capaill

Posts: 1,199   +741
Is there anything useful that can be done with lots of high capacity RAM and high speed SSDs? You know, the SETI program, solve world hunger, torture cheaters on PUBG? What's my goal here, besides "grab it coz it's cheap"? Which is certainly a worthy goal.
 

hood6558

Posts: 353   +110
This will also be great for the cheap laptop market, traditionally plagued by slow spinning drives with high failure rates. That was always the worst thing about laptops - slow to start with, a few hard bumps/drops, and the HDD is toast, or at least slows down even more. SSDs and laptops are made for each other, and only economic factors have prevented universal adoption. With 8¢/GB SSDs, all but the cheapest would finally become much more durable and fast.
 

Tgard

Posts: 99   +37
I just bought and installed a Samsung 970 PRO 512GB - NVMe PCIe M.2 2280 SSD for my rebuild. Wish I could have waited for better prices. But if you try to wait for better parts or prices, it seems there will always be something else to wait for. This is good news in that I may finally be able to replace my bigger disk harddrives with SSDs.
 

Boilerhog146

Posts: 642   +223
They'll think of something to create an artificial shortage, tsunami,earthquake ,fire, . prices will bounce back and forth. can't just let it crash.
 
There's a surplus because the greedy tuncs artificially inflated the prices while skimping on production volume thus reducing demand and leaving them with shiploads of flash in their inventory...

If they hadn't tried to fleece the markets they would have been able to sell more and generate more stable demand.

They only have themselves to blame.