Analysis

posted on 21 May 2008 22:06

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SanDisk CEO and chairman, Eli Harari, said SanDisk is behind its competitors in developing multi-level cell (MLC) flash solid state drive (SSD) technology.

A single level flash cell (SLC) has one bit whereas an MLC one  has more than one bit raising the flash chip's capacity and helping to bring the cost per bit down. This will help to make flash SSDs more affordable compared to hard disk drives (HDD).

Harari was speaking on Monday at a JP Morgan Technology Conference in Boston, Mass. He said the flash memory market was in the depth of a long down cycle. There is a glut of capacity which will take some months before it goes away. Spot market prices for flash are improving. But US flash product sales are being hit by reduced consumer spending due to factors such as higher oil and gas prices.

Flash manufacturers are increasing capacity, Hariri said, 120 - 140 percent this year but SanDisk is going further and increasing its flash manufacturing capacity by 150 - 170 percent in 2008.

Sandisk is developing 3-bit MLC chips and moving its manufacturing to 43nm technology in its Fab 3 and Fab 4 plants, meaning more flash chips per wafer, again lowering the cost. Altogether SanDisk expects to lower its flash costs by 55 percent this year, exactly matching the expected industry-wide decline in flash prices of 55 percent in 2008.

Harari said SanDisk is actively going for three markets: consumer electronics which is the most well-developed, the less developed mobile phone market; and the SSD market which hasn't really started yet. He thinks flash SSDs can fully replace CD and DVD optical media. Eventually it will replace Blu-ray as well, if there is still a need for storage media then, with mobile phones having 32GB or 64GB flash chips, in micro-SD format, to store movies

Hariri is bullish about data center use of flash SSDs asserting it will take off faster than many people imagine.

<sup>[This article is based upon a Barron's blog entry http://blogs.barrons.com/techtraderdaily/2008/05/19/jp-morgan-tech-show-sandisk-sees-depths-of-a-long-downturn/?mod=BOLBlog/.]

[B&F staff.]</sup>