Samsung expects solid-state drives to reach price parity with hard-disk drives within the next few years amid steep annual price declines in flash memory chips.
Solid-state drives, which use flash memory chips as the storage medium, typically offer much better performance than hard-disk drives. But they cost more. Currently, opting for an SSD instead of a hard-disk drive will add anywhere between $100 and $600 to the cost of a laptop, depending on the capacity of the SSD.
In a phone interview, Brian Beard, flash marketing manager for Samsung Semiconductor, said reaching price parity with hard-disk drives is just a matter of time. "Flash memory in the last five years has come down 40, 50, 60 percent per year," he said. "Flash on a dollar-per-gigabyte basis will reach price parity, at some point, with hard disk drives in the next few years." Samsung makes both SSDs and HDDs.
Beard explained why a cost gap persists between solid-state drives and hard-disk drives. "The difference in cost is fundamentally very different. A hard drive has a fixed cost of $40 or $50 for the spindle, the motors, the PCB (printed circuit board), the cables," he said. "To make the hard drive spin faster (increase speed) or to add capacity doesn't really add a lot of incremental cost to the drive." (The price for most laptop-class hard-disk drives on the market is between $60 and $100 at retail, Beard said.)
"When you contrast this with SSDs, they also have a fixed cost for the PCB and the case and the controller, which is lower than the fixed cost of a hard drive," according to Beard. "But as you scale the capacity of the SSD up, the cost scales linearly. For example, if the spot price of the flash chip itself is $2, a 64GB drive is going to cost $128 just for the flash and then you would add the fixed cost of the PCB and the case, he said. So, the cost will double as you double the capacity, according to Beard.
This argument, however, works in favor of lower solid-state drive pricing too--as flash memory prices drop and densities and capacities increase. And Beard added that "there's a lot of pressure for OEMs (PC makers) to match the price to the traditional pricing in the hard-drive industry." Samsung is also a PC maker and faces the same pressures.
And what will happen to the price of SSDs this year? "The rest of the year is quite unpredictable. Because the SSD price is directly tied to the price of flash, no one knows. Everyone is just giving their best guess as to what will happen in the flash market," he said. To date, flash memory prices have dropped so much that chipmakers can't make money.
"Every major flash manufacturer posted major losses in Q4. So flash and SSD manufacturers are under a lot of pressure to make a profit," Beard said.
Where is the price-per-gigabyte sweet spot for solid-state drives going to be later this year? "On the business side, the sweet spot is 64(GB) moving to 128. On the consumer side it's definitely 128 moving to 256," he said.
Samsung SSDs with a capacity of 256GB have been shipping since January. Dell offers these drives in some laptop models already. 256GB drives are just now "rolling out into mass production," Beard said. "We'll start shipping it to some of our smaller customers about right now."