History 2004: WW Enterprise Storage Semiconductor Market to Pass the $1 Billion Mark in 2005

The enterprise storage semiconductor market will pass the $1 billion mark in 2005, an 18.5% jump from 2004 when the market will rise to $857 million.

Steady growth in the longer term will allow this segment to reach $1.2 billion in 2008, representing an 11% CAGR for 2003-2008, reveals a new IDC study, Worldwide Enterprise Storage Semiconductor Market 2004-2008 Forecast and Analysis.

“The market for semiconductors within enterprise storage equipment continues to evolve as the demands for networked storage grows,” said Sean Lavey, program manager for semiconductor research at IDC. “New storage technologies such SATA and SAS coupled with the emerging IP-based iSCSI protocol will have a major impact on driving further adoption of networked storage into the SMB masses. Meanwhile, FC, which has been used heavily in large enterprise and datacenter environments, is also shifting its focus towards attracting higher volume shipments within smaller-sized businesses due to lower costs.”

Competition from chip vendors is growing as networking and datacom chip players have made acquisitions and are allocating larger amounts of R&D spending to become bigger players in the enterprise storage market. Adoption of serial SATA and SAS continues as SATA finds a fit in low-end enterprise storage segments, while SAS is poised to eat away at the larger parallel SCSI installed base. ASICs continue to migrate to programmable logic devices and some merchant application specific semiconductor products. Higher upfront non-recurring engineering charges for cell-based ASICs will likely encourage more OEMs to look to migrate their designs away from custom silicon. FC HBAs and switches will migrate to 4Gb/s in 2005. Backward compatibility along with similar pricing to 1 and 2Gb/s will allow faster 4Gb/s to become the next migration in FC.

This article is an abstract of news published on issue 202 on November 2004 from the former paper version of Computer Data  Storage Newsletter.