Demand for storage never stops

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20 April 2005 News

The computer market is by far the largest for mass storage ICs. Computers account for over 70% of total revenue, however new opportunities from other market segments are gaining momentum as OEMs begin replacing designs using Flash memory, with 'Tiny' drives. These magnetic drives are less than 25 mm in size and, like Flash, will continue to retain information when the power is switched off. Another trend continuing is the use of hard drives in consumer video components.

According to Susie Inouye, research director and principal analyst at Databeans, the tiny drive replacement trend is driven by the 'cost per gig' ratio and as storage capacity requirements increase, the memory stick solutions become more costly. Hard drive cost per gig has plummeted from over $15,00 to less than $0,75 over the past five years, making this solution very compelling for the consumer market.

Handheld devices are storing a lot more information these days. Sony's new PSP, a product competing with the Nintendo's Gameboy, not only plays games, but plays movies and music. Phones are storing more information too. In September 2004, Samsung released a camera phone with a 1,5 GB internal storage disk drive. There is also the Apple iPod, a product that has become what the Sony Walkman was in the '80s. New products like these present a growing opportunity to tiny drive OEMs and the mass storage IC suppliers.

Mass storage IC revenue contributed by tiny drives will be the fastest growing segment in the storage IC industry. Revenue share from this segment, which currently comes in at less than 5%, will constitute 21% by 2010, according to Databeans research.

Other opportunities continue for mass storage IC suppliers. The 3,5" drives, which are used in DVRs and settop-boxes are continuing to ship into this space. Most consumer electronics hard drives are 3,5" products similar to those used in desktop PC environments. Currently, the fastest growing consumer electronics product category for digital mass storage ICs is DVRs. Cable providers are buying most of these, and there will be more opportunity for suppliers as the standard drive capacity increases from 20-40 GB to 80-160 GB.

For more information contact Susie Inouye, Databeans, [email protected]

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Demand for storage never stops

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