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GLGi: Solid-State DiskTechnologies, Applications & Market
Opportunities, Forecast & Risk
Robert WitkowPresident
Westwood Marketing, LLC
© 2008 Gerson Lehrman Group Inc., All Rights Reserved
Council Member Biography
Robert Witkow is the President at Westwood Marketing LLC, a company providing of business development and market intelligence services to the flash memory industry. He is an expert on flash memory applications for mobile telephones, digital cameras, and other consumer electronic devices. Previously, he served in senior sales and marketing management positions at SMART Modular Technologies, the leading independent memory module manufacturer in the world, at Lexar Media, where he managed OEM and Technology Sales and Marketing, and at M-Systems, where as Director of Sales and Marketing he brought the USB Flash Drive to the North American market.
© 2008 Gerson Lehrman Group Inc., All Rights Reserved
Topics Applications & value proposition Key components & supplier overview Market forecasts & revenue metrics Disruptive & alternative technologies (Violin
Memory, Pliant, Texas Memory, Solid Data System)
© 2008 Gerson Lehrman Group Inc., All Rights Reserved
About GLG Institute
GLG Institute (GLGiSM) is a professional organization focused on educating business and investment professionals through in-person meetings. It is designed to revolutionize the professional education market by putting the power of programming into the hands of the GLG community.
GLGi hosts hundreds of Seminars worldwide each year.
GLGi clients receive two seats to all Seminars in all Practice Areas.
GLGi’s website enables clients to: ► Propose Seminar topics, agenda items and locations ► View and RSVP to scheduled and proposed Seminars ► Receive a daily briefing with new posts on your favorite tickers,
subject areas and from trusted Council Members ► Share Seminar details with colleagues or friends
© 2008 Gerson Lehrman Group Inc., All Rights Reserved
Gerson Lehrman Group Contacts
John AronsohnVice President and TMT Global Research Head, Gerson Lehrman Group850 Third Avenue, 9th FloorNew York, NY [email protected]
Aaron LibermanManaging Director, Sales and MarketingGerson Lehrman Group850 Third Avenue, 9th FloorNew York, NY 10022212-984-3684 [email protected]
Carly PisarriProcess ManagerGerson Lehrman Group850 Third Avenue, 9th FloorNew York, NY [email protected]
© 2008 Gerson Lehrman Group Inc., All Rights Reserved
IMPORTANT GLG INSTITUTE DISCLAIMER – By making contact with this/these Council Members and participating in this event, you specifically acknowledge, understand and agree that you must not seek out material non-public or confidential information from Council Members. You understand and agree that the information and material provided by Council Members is provided for your own insight and educational purposes and may not be redistributed or displayed in any form without the prior written consent of Gerson Lehrman Group. You agree to keep the material provided by Council Members for this event and the business information of Gerson Lehrman Group, including information about Council Members, confidential until such information becomes known to the public generally and except to the extent that disclosure may be required by law, regulation or legal process. You must respect any agreements they may have and understand the Council Members may be constrained by obligations or agreements in their ability to consult on certain topics and answer certain questions. Please note that Council Members do not provide investment advice, nor do they provide professional opinions. Council Members who are lawyers do not provide legal advice and no attorney-client relationship is established from their participation in this project.
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Contents
• SSD Technology• SSD & Key Components Overview• SSD - HDD Characteristics
– Technical Comparison– SSC vs. HDD Issues
• SSD Applications– Enterprise Storage
• Industry Leaders– Portable Computing
• Industry Leaders– Military / Aerospace
• Forecast– Data Points– NAND Demand Forecast– SSD Demand Forecast by Application
• Obstacles to Adoption• Alternative / Disruptive Technologies• Questions & Answers• About the Presenter
SSD Technology
• A Solid-State Disk (SSD) is a data storage device that emulates a hard disk drive (HDD)
• NAND Flash SSD’s are essentially arrays of flash memory devices which include a controller that electrically and mechanically emulate, and are software compatible with magnetic HDD’s
SSD & Key Components Overview
• NAND Flash
• ControllerCaptive IP DevelopmentSilicon Motion (NASDAQ: SIMO)Hyperstone (sub. of CML Microsystems, LSE: CML.L)Phison (TSE: Phison Company 8299)IP Goal Microelectronics (Private Company – Chengdu, China)
2007Revenue
2007Share
2006Revenue
Sequential Growth
Samsung $5.86 42.1% $5.61 4.5%Toshiba $3.88 27.9% $3.22 20.5%Hynix $2.38 17.1% $2.19 8.7%Micron $0.85 6.1% $0.36 136.1%Intel $0.41 3.0% $0.11 272.7%ST $0.31 2.2% $0.21 47.6%Renesas $0.21 1.5% $0.59 64.4%$US Billions
SSD - HDD Technical Comparison
Overv
iew
Price
Seek
Time
Laten
cy
Read T
ransf
er
Writ
e Tra
nsfer
Shock Power
Consum
ption
$199.99 8.9 ms 4.2 ms 85 MB/sec. 85 MB/sec. 65 G 9.9 W
HDD 7200 RPM 750 GB 3.5” SATA
SSD N/A 64 GB 3.5” SATA
$199.99 8.9 ms 4.2 ms 85 MB/sec. 85 MB/sec. 65 G 9.9 W
$1,769.00 0.1 ms 0.0 ms 60 MB/sec. 45 MB/sec. 1500 G 2.1 W
SSD vs. HDD Issues
Q. SSD access times are great, but write speeds are a step back, so why would I want an SSD?
A. Small reads (4k) are 20X faster than similar reads on an HDD.
Q. SSD write performance still leaves much to be desired?
R. This is where SSD manufacturers differentiate their product.
Q. I heard that NAND performance is degrading as a result of die shrinks and increases in bits per cell. Won’t this slow SSD performance gains?
A. Correct. Write performance problems are not going away.
SSD Applications
• Enterprise Storage: Now• Portable Computing: 2010 or 11• Military / Aerospace: Legacy
• Consumer Electronic Media Players are Not Likely Candidates for SSD
Enterprise Storage
• Drivers– Read Performance– Increase Network Capacity– Power Savings
• SSD Manufacturers– STEC, Mtron, SMART Modular
• Buyers / Market Drivers– 1st tier: EMC, HP Storageworks, IBM, HDS– 2nd tier: Dell, NetApp, SGI, Quantum, Sun
SSD - Enterprise Leaders
• Mtron– Privately Held, 2006, Gyeonggi-Do, S. Korea– Claims fastest enterprise class SSD– Very close ties to Seoul National University and Samsung– Distribution deal with Imation who is better known for optical– Controller IP from Indilinx, founded by other SNU graduates
• SMART Modular– NASDAQ: SMOD, 1985, Fremont, CA– 61% of 2007’s $828.4 million revenue was generated by HP & Cisco– SMART recently purchased Adtron– Close ties to Francisco Partners, Silverlake, & Samsung
• STEC– NASDAQ: STEC, 1985, Santa Ana, CA– Zeus IOPS is the highest performing enterprise class SSD– STEC’s differentiator is its in-house controller technology – Margins could be pressured as competitors improve product performance – 23% of 2007’s $188.7 million revenue came from SMART Modular
SSD - Enterprise Leaders
>$100 non-NAND BOM in Enterprise SSD’s.
~$5.00 non-NAND BOM in Notebook SSD’s
<$1.00 non-NAND BOM in eeePC and OLPC
Portable Computing
• Drivers– Power Savings– Quicker Boot– Weight– Reliability
• Apple MacBook Air– $1,799 w/ 80 GB HDD– $3,199 w/ 64 GB SSD
• Lenovo X300– $2,632 w/ 64 GB SSD
• Dell Latitude D430– $1,726 w/ 80 GB HDD– $2,506 w/ 64 GB SSD
• Asus EeePC– $349 w/ 4 GB SSD
SSD – Portable Computing Leaders
Samsung
•Gyeonggi-Do, S. Korea
•42.1% NAND Market Share
•In-house SSD controller development, supplemented with Silicon Motion controllers
•Lowest cost model due to highest yields, not from the most advanced technology
•Investing heavily in PCRAM which shows promise in NVM and SSD applications
SanDisk
•NASDAQ: SNDK
•1988, Milpitas, CA
•2007 Sales of $3.9 billion
•$17 Billion Toshiba JV Fab CapEx through 2011
•2/3 of 2007 Royalties generated by Samsung. Royalty renegotiation is on-going
•All current SSD’s are built with Samsung SLC
•Forecast of Q1 ’08 MLC SSD has been pushed out to Q4 ’08
Toshiba
•Tokyo, Japan
•27.9% NAND Market Share
•Partners with SanDisk on Fab development
•$16.7 Billion SanDisk JV for Fab’s 4 and 5, which will quadruple production capacity
•To date, Toshiba has sold SanDisk designed NAND. Now starting to develop their own NAND designs
Watch List: Hynix and Seagate
Military / Aerospace
• Drivers– Reliability
• Annual Units <20K
• Not Exciting – Characterized by High Margins
Forecast – Data Points
• HDD Revenue: 3.5% CAGR 2006 - 2011• SSD Revenue 2007 - 2012 CAGR: 71%.
(from $373 million to $5.4 billion)• SSD Average Capacity: 40 - 45% CAGR from 2006 –
2011 (from 32 GB to > 200 GB)• NAND cost erosion will continue unabated:
– 2006 - 79.4% (Benchmark 8 Gb MLC)– 2007 - 57.1% – 2008 YTD - 30%
• SSD and HDD pricing will near parity in Q1 2011• Expect SSD’s to soak up 20% of NAND capacity by Q1
2010
NAND Demand / Forecast
SSD, 1%Handsets, 12%
USB Flash Drives, 13%
Others, 15%
Media Players, 26%
Flash Cards, 33%
NAND Demand Drivers Q1 2008
SSD 1%Handsets 12%USB Flash Drives 13%Others 15%Media Players 26%Flash Cards 33%Total 100%
SSD Demand / Forecast
0
5
10
15
20
25
30
35
40
2007 2008 2009 2010 2011
Notebook SSD Units Desktop SSD Units Enterprise SSD Units
SSD Unit Demand Forecast2007 2008 2009 2010 2011
Notebook SSD Units 1.1 5 15 25 34Notebook Units 114 125 149 165 170SSD Penetration Rate 1.0% 4.0% 10.1% 15.2% 20.0%
Desktop SSD Units 0 0 1.5 2 3Desktop Units 160 153 150 140 120SSD Penetration Rate 0.0% 0.0% 0.0% 1.4% 2.5%
Enterprise SSD Units 0.01 0.2 0.5 0.7 1Enterprise Units 9 9 10 11 11SSD Penetration Rate 0.1% 2.2% 5.0% 6.4% 9.0%
Total SSD Units 1.11 5.2 17 27.7 37.1
Million / units
Obstacles to Adoption
• Enterprise– CIO’s want proof that flash memory will not wear out– Entry point of 10X the cost of magnetic or optical storage is significant– Magnetic Storage Erosion ($1.00/ GB in 2005 to $.25 in 2011)
• Portable ComputingPrice, Price, Price– SanDisk stated in 6/07 that significant adoption would be seen when flash eroded
to 5X magnetic– Seagate is projecting no significant adoption until NAND erodes to 2X magnetic– I recently golfed with #2 IT executive at KPMG. He has a PC/ seat budget, and is
not willing to pay any premium until hard $ savings are proven
• Alternative & Disruptive Technologies
Alternative / Disruptive Technologies
• Solid State Memory Appliance– Violin Memory– Pliant Technology– Texas Memory Systems– Solid Data Systems
• Traditional Magnetic– Hybrid HDD– Technical Breakthroughs / Cost Erosion
Solid-State Memory Appliance
• Established Players:– Texas Memory Systems
1978, Privately Held
HQ in Houston, TX
– Solid Data Systems1993, Privately Held
HQ in Santa Clara, CA
• Emerging Competitors:– Pliant Technology
2006, Privately Held, Founders are Storage Industry Legends, Lightspeed Ventures A-Round in February 2008, HQ in Milpitas, CA
– Violin Memory2005, Privately Held, RationalWave Partners is an Investor, HQ in Iselin, NJ
Questions & Answers
• Which approach is going to win the Enterprise?– SSD– Memory Appliance– Traditional Magnetic
• Which companies are most at risk and why?– STEC– SanDisk– Seagate
• Who has the most to gain?– Seagate– Samsung– Toshiba
• Your questions?