SanDisk CEO thinks Flash prices are too low
At the Flash Memory Sumit, SanDisk CEO Eli Harari voiced some concern about current pricing trends for flash memory. If current trends continue, he suggests 250GB flash drives will be available for $100 by the year 2013; but profit margins are eroding so fast that no manufacturer would want to build these. Or rather: he’s afraid that no manufacturer will build the fabs to produce them.
According to Harari, the production costs of flash memory have been falling by about 50% annually for the past four years, but pricing for endusers has gone down even faster. As Computerworld quotes:
“You’re going to have to invest $30 billion in order to generate $20 billion of new revenue,” Harari said. “If the analysts are right, then the industry is basically irrational and suicidal.Things going forward are not going to be the same as things in the past,”
I personally think the rapid price drops will come to an end long before 2013; more and more server vendors and PC makers are offering SSDs as an option, and both consumers and corporate customers are becoming aware of the performance gains Solid State Drives can bring. Which means there’s going to be a larger market for these, even at current pricing. And once the economy picks up, demand will probably outpace supply. That alone might even lead to price increases.
And of course there are a number of technologies on the way that might decrease production costs, such as 3-bit flash memory and 3D read/write. Even Harari agrees that these might cut manufacturing costs enough to make flash drives a viable alternative to traditional spinning drives.