39 Million SSDs Shipped WW in 2012, Up 129% From 2011 – IHS iSuppli …

83 million expected this year, up 113%
This is a Press Release edited by on 2013.01.24

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A new generation of lower-cost and more appealing ultrabooks are expected to help cause global shipments of SSDs to more than double in 2013, according to an IHS iSuppli Storage Space Market Brief from information and analytics provider IHS, Inc.

Worldwide SSD shipments are set to rise to 83 million units this year, up from 39 million in 2012. Shipments are set to continue to rise 239 million units in 2016, amounting to about 40% of the size of the HDD market.

Global SSD Unit Shipment Forecast 

 2013 2014
 2015  2016
 Millions of Units   17    39    83  126   175   239
 Y/Y Growth
  NA  129%  113%  52%   39%   37%

(Source: IHS iSuppli Research, January 2013)

SSD revenue this year is forecast to reach $10.7 billion, up a
resounding 53% from $7.0 billion in 2012. The projected increase
this year follows a near-similar rate of expansion in 2012, when revenue
shot up 52% from $4.6 billion in 2011. The industry will
continue to enjoy double-digit expansion in the next three years, with
revenue amounting to $20.7 billion by 2016.

The steady growth of SSD revenues means that the market will be
equivalent to more than half the size of the HDD industry by 2016.

SSDs can serve as an alternative to HDDs in PCs, storing data by using NAND flash memory semiconductors rather than by employing traditional rotating media.

The SSD data presented here covers traditional SSDs in both the consumer and enterprise segments, as well as cache SSDs that along with an HDD component make up a composite storage solution - such as that found in Intel Corp.'s ultrabooks. Not included is revenue for hybrid HDDs, in which the NAND component lies inside the hard drive.

"The fate of the SSD business is closely tied to the market for ultrabooks and other ultrathin PCs that use cache drives," said Ryan Chien, analyst for memory and storage at IHS. "While SSD shipments rose by 124% last year, growth actually fell short of expectations because ultrabook sales faltered due to poor marketing, high prices and a lack of appealing features. However, if sales of the new generation of ultrabooks take off this year as expected, the SSD market is set for robust growth."

Solid market drivers for SSDs

The newest wave of ultrabooks loaded with Windows 8 has started to generate enthusiasm, with the super thin computers likely to pick up more steam this year. Upcoming ultrabooks based on Intel's Haswell microprocessor architecture also have the potential to catch on with consumers. These factors should boost SSD prospects this year.

Another factor driving growth is that average selling prices for NAND flash memory have come down, in the process establishing new price expectations. The lower prices are attracting deal-seeking consumer enthusiasts, as well as an increasing number of PC manufacturers that are now more willing to install the once-costly drives into computers.

Furthermore, in the enterprise sector, SSD use is growing thanks to product introductions from major vendors and start-ups alike.

As NAND rides out variable cost and scale curves in ever-more efficient manufacturing processes, such things as solid-state PCs, servers and storage arrays become more achievable and attainable. Recent developments around nonvolatile memories like STT-RAM and resistive RAM also hint at sustained performance improvements for SSDs beyond the drives' current use of NAND flash memory.

For SSD manufacturers, their fortunes this year will depend on
how well they align with market trends. The emerging cache SSD space,
for instance, will support smaller companies like Lite-On and Kingston
Technology. Meanwhile, as OEMs for
enterprise storage systems expand and refine in-house flash
technologies, growth will slow for companies like Fusion-io with
proprietary SSD solutions of their own.

Still to be answered as companies reposition their offerings in
the value chain are questions about application segmentation and brand

The jury is out, for instance, on whether SSDs will be able to
continue their rapid price decline, and whether this would be achieved
via cuts in costs, margins, or improvements in manufacturing scale. The
impact on SSD technology of new interfaces, such as NVM Express, SCSI
Express and even mobile-focused UFS, will also have to be assessed. And
in the vast, untapped realm of the enterprise market, the battle will
rage between storage vendors capitalizing on recent acquisitions in a
show of strength and mighty resources, against aggressive startups with
nimbler footing and quick pivoting strategies.

Regardless of the outcome, rapid growth for SSDs is expected
moving forward, especially as ultrabooks and cache SSDs finally start
catching on with consumers, IHS iSuppli predicts.

Our Comments

Now, it's clear that SSDs are going to compete seriously with HDDs. This report from IHS iSuppli even says: "The steady growth of SSD revenues means that the market will be equivalent to more than half the size of the HDD industry by 2016."

But it will take several years for the number of SSDs sold to surpass HDDs. 39 million SSDs have been shipped in 2012. It was 32.6 million and 43.9 million HDDs ... in 1991 and 1992, respectively, or around 20 years ago, according to Disk/Trend.

But the growth rate is today largely in favour of silicon devices. In term of revenue, IHS iSuppli has calculated that it was $7 billion in 2012 for the WW market. As far as we can come back in the history, it was $20.4 billion for the rotating devices ... in 1988, at a time where HDDs were much more expansive, at around $1,000 per unit. Using the IHS iSuppli figures, the average SSD price was $179 for one SSD in 2012. For HDD, it's today around $60.

    WW SSD and HDD Market
          (in million of units)
 2011   624.5    17    2.7%
 2012   673.4    39    5.8%
 2013   769.9    83   10.8%
 2014   881.9   126   14.3%
 2015  1,012.4   175   17.3%
 2016  1,162.0   239   20.6%
* Source: IHS iSuppli, January 2013
** Source: Coughlin Associates, May 2012
Note: real figures for 2011 and 2012 but projections for HDDs in 2012 and for the following years for both devices. In fact, the real number of HDDs shipped in 2012 was below 600 million and the projections of Coughlin Associates are optimistic.