Why Are SSDs Still So Expensive?

The above question recently appeared on the Yahoo! Answers site and it’s a perfect lead-in to a further discussion of Jim Handy’s keynote at the Bell Micro SSD seminar in Milpitas, California earlier this month. The simple question on Yahoo! Answers was phrased this way:

Why are the solid state disk drives still so expensive?

They are on the market for years and still so expensive. SSD of a reasonable capacity (256GB) costs as much as $800 or more. Aren’t they going to drop the prices?

Although the question appears to have been posed by someone not closely familiar with the ins and outs of hard-disk drive (HDD) and solid-state disk (SSD) technologies, markets, and pricing, it’s a frequent question posed by many in the industry. We’ve become so accustomed to large, regular drops in price/capacity for both mechanical storage (“rotating rust”) and semiconductor memory that we’ve collectively developed a sense of entitlement. If we can’t buy it today, we think, surely the price will drop and we’ll be able to afford it soon.

However, when we compare the price/capacity of SSDs against HDDs, we’re comparing one moving target against another. Moore’s Law governs the price of SSDs because the largest cost component in an SSD is NAND Flash memory (see below). Moore’s Law has been a monster force in the semiconductor industry, pushing prices ever lower for more than four decades. However, the HDD vendors are constantly working with their own price-reduction curve, which has proven to be just as robust as Moore’s Law. By pulling a veritable menagerie of rabbits out of various technological hats, HDD vendors have dropped per-bit pricing for HDDs about as fast as semiconductor vendors have cut the price/bit of NAND Flash memory.

Take a look at this graph from Handy’s keynote:

Handy HDD SSD Cost Differential

From the gross slopes of the two curves, you can see that HDD cost/capacity has remained about 20x lower than NAND Flash memory cost/capacity throughout this decade. Note that in 2006, there was a serious downturn in the slope of the curve for NAND Flash. Extrapolating that new slope led some to predict that NAND Flash cost/Gbyte would cross over that of HDDs by 2008 or 2009. That just didn’t happen. The increased rate of price decline was economically unsupportable and caused huge turmoil among NAND Flash vendors. (For extensive analysis of this situation, see this blog entry on Denali Software’s Web site.)

Now please understand, the expectation that NAND Flash cost/Gbyte would zoom past the HDD cost/Gbyte curve wasn’t just wishful thinking. NAND Flash per-bit costs did overtake and then zoom past that of DRAM, which was once the semiconductor industry’s king of cost/bit. That event happened in 2004 as shown in this slide from Handy’s keynote.

Handy NAND Flash and DRAM Costs

So the expectation that NAND Flash cost/bit would zoom past HDD cost/bit wasn’t at all far-fetched. It just didn’t happen. HDD vendors happily continued to cut the cost/bit of rotating storage, to the very great benefit of consumers and enterprise users everywhere.

Handy’s simple silicon anatomy of an SSD shows why the SSD’s cost/bit is closely tied to the cost of NAND Flash.

Silicon Anatomy of an SSD

From a silicon perspective, Handy’s illustration shows 34 key semiconductor devices in his example 64-Gbyte SSD. Two of the devices are a controller chip and a DRAM buffer. Total cost for those two devices: $6. The other 32 devices are NAND Flash chips. Total cost for those devices: $64 for 64 Gbytes of storage (not counting spare capacity). The cost of the NAND Flash devices is more than 90% of the silicon cost of an SSD. The SSD’s price is largely set by the cost of its internal NAND Flash.

That’s why SSDs aren’t likely to replace HDDs for bulk storage in the foreseeable future. As long as the HDD industry has a road map leading to higher capacity and lower cost/bit storage, and it does, then the HDD will keep the throne as the storage capacity king.

SSDs can beat HDDs in raw performance by one or two orders of magnitude, as measured in IOPS. There’s nothing on the HDD road map that can change that situation. For applications that can measure the value of storage speed, and there are many such applications for enterprise-class storage, SSDs provide sufficient value to justify their higher price/bit. For most consumers, people who are selecting laptops for example, the choice between a 160-Gbyte HDD or a 32-Gbyte SSD for the same price is obvious. The consumer will choose more capacity (to store more music, more pictures, more video, and more movies) every time.

Now take a look at Handy’s curves for DRAM and NAND Flash cost/bit once again:

Handy NAND Flash and DRAM Costs

Note that the cost/bit of NAND Flash is now roughly 10% that of DRAM. That means that as a DRAM backup medium, NAND Flash doesn’t add that much to the cost of the DRAM it’s backing up. Unlike the comparison of NAND Flash and HDD capacity, which tilts far in favor of the HDD, NAND Flash densities are much better than DRAM bit densities and that gap is growing thanks to multi-level cell (MLC) storage. These economics are behind the idea for AgigA Tech’s AGIGARAM modules. For a small cost adder, volatile DRAM can be made bulletproof when paired with NAND Flash memory. For more detail regarding this idea, see the earlier 3-part series in this blog (here, here, and here).

Saturday, December 12th, 2009 at 20:35

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