NAND flash has soared as the prices for its components plummet. As a result of tremendous investment, fierce competition, and technological advances, NAND flash components have driven capacities into the gigabyte range as prices currently range in the tens of dollars. As a result, a wide array of applications has emerged, with more expected in the future. The NAND flash market is inextricably linked to the consumer electronics market because NAND flash memory enables cheap storage in incredibly small sizes. With the digital revolution and proliferation of digital cameras, removable flash card and USB flash drive applications have dominated NAND consumption—currently representing almost 60% of NAND megabyte consumption.
Flash card adoption has exploded, expanding beyond established applications such as digital cameras and camcorders and into mobile phones, video game systems, and GPS navigation systems. As a result, unit growth will explode from 2002's total of under 100 million flash card units to approach 1 billion units in 2010.
STORAGE GETS SMARTER
USB flash drives have largely been seen as replacements for floppy drives, but they are evolving from "simple" storage to "smart" storage. The announcements of smart drive initiatives such as U3, PowerToGo, MojoPac, and PortableApps all aim to give users a "portable personality" enabled by software and hardware enhancements that allow a plethora of applications to be run and loaded directly from the drives.
In 2005, the portable media player category was galvanized by Apple's introduction of the Shuffle and nano. By replacing the 1-in. drives in its music players, Apple showcased the inherent benefits of solid-state technology and the small form factors it enables. The portable media player category has witnessed stellar growth and rounds out the third major category of NAND flash with 27% megabyte consumption in 2006.
While these three applications represent most NAND flash consumption today, many other applications have emerged in just the last few years. These applications use NAND flash in-system. Some digital cameras, portable and stationary game consoles, GPS navigation systems, and mobile phones use in-system NAND flash for data storage. Some set-top boxes, CRT, LCDs, printers, and so on also use NAND flash in-system for firmware and font storage. Currently, 37 application categories consume NAND flash, and this will grow to over 50 categories by 2010.
VIDEO AND COMPUTERS
Handsets will drive demand in 2007, followed by video and computing in 2008 and beyond. Next year will be a strong year for gigabytes of NAND flash used in-system in handsets for targeted music phones. This trend will certainly accelerate in the back half of 2007 now that Apple has announced the iPhone.
Video capabilities transcending portable media players, digital camcorders, digital cameras, and even handsets will drive the market starting later this year as 16 Gbytes and then 32 Gbytes become increasingly affordable for consumers. Computing applications, specifically NAND flash used to improve system performance in PCs, will begin traction in 2007.
NAND chip-set solutions for caching in PCs will have only a minor effect in NAND consumption in the second half of 2007 as user understanding proves a challenging hurdle to overcome. The attention to complementary NAND usage in PCs will serve to prime the market for solid-state drive (SSD) adoption in 2009 and beyond as falling prices enable compelling solutions for notebook PCs.
However, user adoption still will be limited to select markets and won't be widespread. NAND flash will complement hard-disk drive (HDD) technology and will not displace HDD for mainstream uses due to growing storage needs.
NAND flash prices will continue to fall precipitously, driven by massive investment and new technology such as 3-byte/cell and 4-byte/cell technology. Prices will fall again in 2007 before relenting somewhat in 2008. Even so, the annual average price per megabyte decline from 2005 to 2010 is expected to be –52%, resulting in a gigabyte costing less than $1 in 2010. As NAND prices fall, new application opportunities will develop, some of which we can't even imagine yet.