back to article Flash prices FALL

Flash chip prices are falling thanks to over-supply and slow markets in Europe and the USA. NAND contract prices eased in the second half of November, as reported in Digitimes. How come? The recent Thai floods paralysed the hard drive supply chain - and this was supposed to stimulate demand for NAND flash, as manufacturers …

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  1. Anonymous Coward
    Anonymous Coward

    Lemme get out my fingers and do some of that tricksy math.

    So that once and a half over price hike in hard disk drives is now being offset by a... four to six percent drop in flash prices? Doesn't look like that quite makes up for it, now does it?

    1. Trollslayer
      Thumb Down

      One point of the article is to show the two markets are separate and not linked in the way people expected.

      Not tricksy at all.

      1. Tim of the Win
        Thumb Up

        Capacity per price differences are so high, you're right, they don't compete at the moment.

        Replace a 1TB drive with a 64GB alternative or just take the price hit until supply resumes?

  2. Anonymous Coward
    Anonymous Coward

    Oversupply?

    So, two points:

    1-HDD and SSD markets are totally unrelated. Ok, got it.

    2- It's hard to predict a real oversupply if a market has potential repressed demand. "If SSDs were cheap, I'd buy them by the truckload" is the line of thought. If nobody buys, the price doesn't drop (economy of scale), if the price doesn't drop, nobody buys it. Now if the prices really drop, and drop HARD, other consumers that never thought of SSD will start to take a look at it. That's your lower, repressed demand, right there.

    I know that because I'd buy a flash drive with, say, 500GB, if it was only 30% or 50% more expensive than HDD. It isn't.

    Somebody tried to predict the demand of a line of trains to the suburbs around here; initial survey said they should double the trains availability, so they doubled the trains capacity (more speed, less intervals, more trains). Guess what, the movement TRIPLED, because the mouth-to-mouth advertising said "now the trains are working faster and more reliably, it is better than bus", that's what you would hear.

    I'm no economist, but I know that if the prices drop, SSDs will sell, since they are better than HDDs in some aspects. Aspects that matter to end consumers, mind you.

    Let them oversupply at will. Everybody wins.

  3. Anonymous Coward
    Anonymous Coward

    The general viewpoint when the WD warned of the shortage is that people would start to buy the 128Gb and 512Gb Flash units when the price per Gb shifted towards Flash chips over Spindles.

    And the price per Gb DID shift towards flash quite quickly but only in the sub 128Gb range. Which is great for netbooks and tablets, but not great for the big box shifters and Desktop users that need 128Gb or better for their (*cough* MS *cough*) systems Bloat.

  4. Chris Schmid

    Price economics...

    As an economist, a few thoughts on this topic...

    First, let's agree that demand for HDD is rather unelastic, meaning no big substitution effects will appear in the short/mid-term.

    Desktop users might prefer SSD over HDD for some aspects but price prevents this from happening at the large scale. SSD manufacturer are aware of the ruining race-to-the-bottom of HDD manufacturers which all have low to zero margins and are extremely exposed to the market. Making disks alone is a very unprofitable business. So, SDD manufacturers will do nothing about entering a price war as HDD manufacturers did, consequence is prices will likely stay substantially higher than HDDs.

    Now, let's look at the HDD situation. It is a market with a few players left only, everybody at large scale. Before Thailand happened, they were in a race-to-the-bottom, eroding margins and forcing market concentration. Now, this external shock makes prices rice. Demand is unelastic, which means after a short while where comanpies can resist buying new disks, they will be forced to buy disks, and HDD disks, even as prices are high, because:

    - the majority of disks is sold to corporations

    - it is an illusion to think corporations can exchange HDD for SDD as easily as the desktop user exchanges its laptop for a new one with SDD.

    Now, HDD manufacturers realize that they will be able to sell similar quantities of disks at a substantially higher price level. They realize they can make better profit and maintain higher margins. The market will try to force them to reduce prices, but the BIG question is: With propably no new HDD competitors left and SDD adoption not foreseeable in the near future, will the HDD manufacturer oligopoly really enter AGAIN in a race-to-the-bottom where they don't want to be? This external shock is a opportunity for HDD manufacturers more than SDD players to get back to healthy margins and a profitable business...

  5. Efros

    SSD v HDD

    at the moment only competition I see is in boot drives, 64GB is about right for that, any large storage and it's going to be a long time (even with the current price increases) before SSDs will compete with HDD on cost. Power consumption may have to be taken into account but not really an issue for home users. Only SSD I own is a boot drive in my HTPC, serves its purpose very well, I may invest in a 128GB SSD for my laptop in the near future, but no rush.

  6. Anonymous Coward
    Linux

    I wanted an SSD Drive

    But I got a penguin instead.

    None the less, recent talk about relative changes made me take a look at the current prices for *storage* sized units, rather than boot "drives". One would /still/ have to be seriously rich to keep pics, music, movies, etc, on SSD

  7. Anonymous Coward
    Anonymous Coward

    I have to admit....

    ...that after replacing many old HD desktops with SSD machines in a company I work for as a consultant, I would never go back and buy a HD machine for users, unless the SSD price goes up quite a bit. On the server and storage side is a different story, but on the desktop side the migration to new machines got so many positive feedbacks that people are not very concerned with an increase on the average unit price. Note that this company is small (around 40 people). Larger projects my not be as viable just yet.

    I am would LOVE to see SSD prices fall to less than half of what they are.

  8. Southern
    Meh

    Question...

    Forgive my ignorance, but is this likely to lead to cheaper SSDs or other flash-based products for us consumers or have I missed the point?

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