Although sales of solid-state drives (SSDs) for notebooks have suffered a major setback in 2009, the enterprise market is more than compensating for the lack of growth causing overall SSD market revenues to rise by a factor of seven for the year, according to iSuppli.

"The dramatic rise in the cost of NAND flash memory in the second quarter caused prices for SSDs to jump, making them uncompetitive with hard disk drives (HDD) and derailing their acceptance in notebooks," said Michael Yang, senior analyst for storage and mobile memory at iSuppli. "NAND flash is the critical component of an SSD, accounting for about 90% of its value (sic). However, for enterprise data centers seeking to expand their capabilities while lowering their overall power consumption, SSDs remain an attractive option."

On the strength of rising demand from the enterprise segment, iSuppli estimated that total SSD revenues in 2009 will soar to US$883 million, up from US$127 million in 2008. Unit shipments will increase to 5.8 million units, up from 1.4 million in 2008.

While this is a robust upsurge on year, SSD vendors are anticipating that 2010 and 2011 will be exceptionally strong growth years as data centers and IT computing infrastructures ramp up their adoption, according to iSuppli. Furthermore, corporate adoption should pave the way for an eventual resurgence in the acceptance of notebooks by driving down overall system prices.

iSuppli forecast that the total market for SSDs will climb to US$10.8 billion by 2013, rising at a CAGR of 142.8% from US$127 million in 2008. The unit forecast calls for shipments reaching 65.2 million SSDs by 2013, with the CAGR rising by 115.6% from 1.4 million units in 2008.

The success of SSDs in the enterprise segment has bolstered the position of suppliers that tout the benefits of the technology compared to traditional HDDs. These advantages include increased input/output operations per second (IOPS), power usage reduction and smaller footprint, and all these factors lead to significant cost savings, iSuppli said.

While the accelerated ramp-up of the enterprise sector is important to SSD vendors, further development in features, benefits and marketing campaigns are needed in order for the PC segment to see increased SSD adoption, iSuppli noted.

"What's needed is an SSD company that understands how to relate to the PC consumer, and one that can put together a campaign attractive to users beyond just the price tag," Yang said. "When that happens, this market will surge upward."

Source: iSuppli, compiled by Digitimes, October 2009