GLGi: Solid-State Disk Technologies, Applications & Market Opportunities, Forecast & Risk

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GLGi: Solid
-
State Disk

Technologies, Applications & Market Opportunities,
Forecast & Risk

Robert Witkow

President

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

¾
Key components & supplier overview

¾
Market forecasts & revenue metrics

¾
Disruptive & alternative technologies (Violin Memory,
Pliant, Texas Memory, Solid Data System)




© 2008 Gerson Lehrman Group Inc., All Rights Reserved

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Gerson Lehrman Group

850 Third Avenue, 9th Floor

New York, NY 10022

212
-
984
-
3673

jaronsohn@glgroup.com


Aaron Liberman

Managing Director, Sales and Marketing

Gerson Lehrman Group

850 Third Avenue, 9th Floor

New York, NY 10022

212
-
984
-
3684

aliberman@glgroup.com



Carly Pisarri

Process Manager

Gerson Lehrman Group

850 Third Avenue, 9th Floor

New York, NY 10022

212
-
750
-
1435

cpisarri@glgroup.com


© 2008 Gerson Lehrman Group Inc., All Rights Reserved

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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










Controller


Captive IP Development


Silicon Motion (NASDAQ: SIMO)


Hyperstone (sub. of CML Microsystems, LSE: CML.L)


Phison (TSE: Phison Company 8299)


IP Goal Microelectronics (Private Company


Chengdu, China)

2007
Revenue
2007
Share
2006
Revenue
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

Overview
Price
Seek Time
Latency
Read Transfer
Write Transfer
Shock
Power
Consumption
$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?

A.
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


1
st

tier: EMC, HP Storageworks, IBM, HDS


2
nd

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 Forecast
2007
2008
2009
2010
2011
Notebook SSD Units
1.1
5
15
25
34
Notebook Units
114
125
149
165
170
SSD Penetration Rate
1.0%
4.0%
10.1%
15.2%
20.0%
Desktop SSD Units
0
0
1.5
2
3
Desktop Units
160
153
150
140
120
SSD Penetration Rate
0.0%
0.0%
0.0%
1.4%
2.5%
Enterprise SSD Units
0.01
0.2
0.5
0.7
1
Enterprise Units
9
9
10
11
11
SSD 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 Computing

Price, 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 Systems


1993, 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 Memory


2005, 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?