Time to buy a new SSD? Maybe not. Flash prices are tumbling and by this time next year will be less than half what they are now.
Market dynamics Flash prices are driven by supply. A multi-billion dollar fab comes on line and prices drop. Which is just what is going to happen next year.
There are 2 sets of prices to watch. Contract prices move slower than spot prices, but the two tend to move in tandem.
Flash dichotomy But lately that hasn't been true of NAND flash. While cheap thumb drive prices have fallen off a cliff in the last 12-20 weeks - they'd been at ≈$2/GB for about a year and just tumbled to ≈$1.40/GB - vendors results show stable prices.
As flash market guru Jim Handy of Objective Analysis put it in an email:
The manufacturers' earnings statements and their statistics (WSTS - the World Semiconductor Trade Statistics) all show prices remaining stable, while the brokers show a steady decline that began in May. This inconsistency really cannot be explained . . . .
Spot price drop Let's look at the difference between contract prices - what big vendors who need an assured supply pay - and spot prices - what most thumb drive vendors pay for whatever is available.
DRAMexchange.com has a large spread. Contract prices are almost $2/GB for 8GB NAND while spot prices are less than $1.50. USB thumb drive prices are a good proxy for flash prices since most of their cost is flash.
No new plants have come on line lately, traditionally a major reason for massive price reductions. Smart phones, iPads, iPods and SSDs seem to be selling well. (Apple's Q3 results will tell us more as they buy half the world's NAND flash supply.)
But the spot market demand isn't what it used to be. Why?
The Storage Bits take I see three likely causes. In no particular order:
Mr. Handy predicts that new fab capacity next year will drive prices lower:
. . . the capital spending that kicked in during the second half of 2009 will create such an oversupply in the second half of 2011. I wouldn't anticipate any significant price declines before then. By this time next year price per gigabyte is likely to be closing in on 50 cents.
That means consumer SSDs will be less than $1/GB - maybe less that 75¢ - down from $2+ today so every gamer will be able to afford one. That will drive SSD volumes for years.
Comments welcome, of course. Not all thumb drives are created equal. The Corsair Voyager GT USB 2.0 flash drive is notably faster than most.