The precipitous drop marks the first time NAND flash pricing has fallen to the $1 per GB threshold since the fourth quarter of 2008, when consumer-class NAND pricing averaged 90 cents per GB.
[ Are your storage requirements out of control? Then start by eliminating data redundancy. InfoWorld contributor Keith Schultz lays it all out in our Deep Dive Report on Data Deduplication. ]
Skyrocketing NAND flash prices last year subdued what had been a booming solid state drive (SSD) market. The price of flash memory chips rose to $4.10 per GB in the second quarter of last year.
Pricing for NAND flash memory had been expected to flat-line until next year, when NAND flash chip fabricators will be able to reinvest their profits to ramp up production and begin selling higher-density products, industry experts say.
But in a report released today, iSuppli forecasts that NAND flash pricing for 3-bit-per-cell NAND will average $1.20 per GB for the entire fourth quarter and will then drop to $1 by the end of this year. The $1 per GB level is considered a threshold that will drive adoption of solid state drives, iSuppli stated.
The recent price drop is reflected in the first quarter of 2010, when pricing for 3-bit-per-cell (or triple-level cell) NAND averaged $1.80 per GB and 2-bit per cell flash was at $2.05, iSuppli stated.
"When NAND pricing first fell below the $1 level at the end of 2008, many observers opined that it would sound the starting gun for solid state storage, allowing the technology to be cost competitive with hard disk drives in PCs for the first time," Michael Yang, iSuppli senior analyst for memory and storage, said in a statement. "However, during the following quarters, pricing rose because of strong demand and constrained production capacity, limiting the appeal of SSDs to low-volume servers in data centers and preventing widespread adoption in high-volume business and consumer PCs."
NAND flash memory is produced as either multi-level cell (MLC), which holds more than one bit per cell, and single-level cell (SLC) memory, which holds one bit per cell. MLC flash had traditionally held two bits of data per cell, but recently, companies such as Intel and Micron have announced 3-bit-per-cell MLC, which increases the density of the flash memory but reduces the cost to produce it.
Manufacturers over time have also been able to shrink the geometric size of the circuitry that makes up NAND flash technology from 90 nanometers (nm) a few years ago to 25nm to 34nm today. The process of laying out the circuitry is known as lithography. Most manufacturers are using lithography processes in the 30nm-to-40nm range. Micron, Intel, and Samsung are using 34nm, and Toshiba is using 32nm. Intel recently announced it has begun using a 25nm process.
Yang said that with pricing headed back to the $1 per gigabyte level, the SSD market may be ready to get back on the fast track to adoption.
"With NAND pricing having returned to per-gigabyte pricing levels not seen in two years, there's likely to be a lot of new buzz created for the solid state storage market at the end of 2010," Yang said. "However, traditional HDDs gained a lot of additional ground during the past few years in terms of rising capacity and falling prices. In fact, HDDs have gained so much ground that SSDs now are in danger of never regaining their competitive footing."
Yang believes that in order for SSDs to compete against HDDs, per-GB pricing for NAND flash memory will have to decline to 40 cents by 2012, which would mean a 100GB SSD would cost about $50. At that price, SSD would be appealing in both the consumer and corporate PC marketplaces, he said.
While the second half of 2010 is almost certain to see shortages for 2-bit-per cell MLC NAND, 3-bit-per cell NAND is expected to boom as supply is sufficiently ahead of demand, Yang stated.
Lucas Mearian covers storage, disaster recovery and business continuity, financial services infrastructure and health care IT for Computerworld. Follow Lucas on Twitter at @lucasmearian or subscribe to Lucas's RSS feed. His email address is email@example.com.
Read more about storage in Computerworld's Storage Topic Center.
This story, "NAND flash memory pricing to plummet to $1 per GB" was originally published by Computerworld.