Legit Reviews

Laptop PC Storage Capacity Growth Continues Unabated
One exabyte of storage capacity equals 1 million terabytes, or 1 billion
gigabytes. The total available market (TAM) for laptop PC hard disk
drives worldwide in 2010 was 69 exabytes and is forecast to grow to
95 exabytes in 2011.1 That’s a lot of storage capacity. What’s more, the
average capacity of a notebook hard drive is forecast to grow from nearly
300GB in 2010 to more than 350GB in 2011.1 Laptop users want more
capacity, not less.

NAND flash memory is the storage component of solid state drives.
Conventional wisdom in some circles of the storage marketplace is that
in the coming years solid state drives will begin to replace hard disk drives
in significant numbers in laptop PCs. However, keep in mind that in 2010
the entire NAND flash memory industry had enough installed capacity to
produce just over 11 exabytes of storage. More than 10 exabytes (93%)
of that went to consumer devices such as smartphones, tablets and SD
cards.1 Just 0.86 exabytes (7%) of that NAND was used in solid state
drives.1

NAND flash memory production capacity is forecast to grow to 21
exabytes in 2011, with about 2 exabytes (9%) going to solid state drives
and the rest (91%) to smart phones and other consumer devices.1 The
cost to build a megafab capable of producing 3.75 exabytes of nonvolatile
NAND flash memory is $10 billion.2 What’s more, a megafab—the
minimum commitment for any significant increase in NAND production—
would take two to three years to ramp to full production. Smaller fabs
would contribute little to meeting the enormous demand for laptop
storage.

NAND Flash

Can It Meet the Growing Storage Capacity Demands of the Laptop PC Market?

Assuming all of that additional NAND is used for
solid state drives, that $10 billion2 investment
would produce enough flash memory to serve
just 4% of the 95-exabyte laptop storage market
projected for 2011. Spending $10 billion2 to buy
4% of notebook storage market share, or
$2 billion2 in revenue, is not viable.

To serve the entire laptop PC storage market in
2010, a $170 billion2 investment in NAND flash
memory fabs would have been required. In 2011,
a $250 billion2 fab investment would be needed
to meet projected hard disk drive capacity
demand for all laptops. But $10 billion2 is just for
the cost of the fab. It doesn’t include the NAND,
operations, fab depreciation and other significant
costs.

Worldwide installed fab capacity is expected to
grow from 11.5 exabytes in 2010 to 21 exabytes
in 2011, a staggering 82%.1 But remember, just
9%, or about 2 exabytes, of that NAND will go
to solid state drives. Even at that impressive
80+% growth rate, with the vast majority of the
NAND going to consumer devices, the yawning
gulf between NAND flash memory production
capacity for solid state drives and demand for
laptop storage will continue to widen.
Whatever portion of megafab production capacity
is devoted to NAND flash for SSDs, the return on
investment would be difficult to justify given the
relatively small available market for laptop SSDs.
Any additional capacity would be better justified
to serve the market for smartphones, tablets
and other consumer products for one chief
reason: NAND makers can maintain much higher
yields and lower prices for consumer-grade
NAND because its performance and reliability
specifications are much less stringent than the
requirements for laptop PCs.

The upshot: Hard disk drives will serve the bulk
of the laptop market for many years to come as
makers of solid state drive remain overstretched
to meet ever-growing demand for laptop storage.
While the bulk of worldwide demand for NAND
flash is for consumer products such as MP3
players, cell phones and cameras, Seagate
believes there is ample flash to support the
opportunities Seagate sees for enterprise and
hybrid solid state storage.

1 Gartner, Forecast: NAND Flash Supply and Demand, Worldwide, 1Q09-4Q11, 4Q10
Update, page 2, Table 15-3, December 2010)

2 All figures in USD