Intel tests mass storage waters with new SSDs

San Francisco (CA) – A growing number that historically has not been associated with mass storage products such as hard drives is taking advantage of low NAND flash prices and increasing storage capacities to move into a new business segment that promises a virtually endless business opportunity: Intel is the latest company to jump into the solid state disk (SSD) market that still promises high margins, but grows increasingly competitive, especially as market leader Samsung is accelerating the pace. Intel will begin offering SSDs with up to 80 GB capacity in the fourth quarter, while up to 160 GB will become available in Q1 2009.

At first sight, Intel’s move into the SSD segment may seem to be about as sensible as was the company’s decision to build MP3 players in 2001. But a closer look reveals that the company’s background justifies this business expansion as an additional revenue source. In fact, the SSD announcement at IDF could mark the birth of a new mass storage giant that can compete with the big boys.

According to iSuppli, Samsung currently dominates the NAND flash market with a share of 42.3% and Q2 revenues of more than $1.4 billion. Toshiba and Hynix, ranked second and third, account for 27.5% and 13.4% of the market. Intel’s joint venture partner Micron follows in fourth and Intel is listed in fifth with 8.9% and 5.2%, respectively. The combined companies already represent the third largest force in the NAND flash market and both Micron and Intel were the only major NAND flash manufacturer to post significant revenue growth in Q2 – 85% and 96%, respectively. Toshiba was the only other manufacturer to achieve double-digit revenue growth (12%), while Samsung showed a moderate increase of 2.9%, albeit on a very high level.

It appears that Intel has a very solid business foundation to support further growth. While the company is still profiting from an agreement to ship NAND flash chips to Apple, a mainstream trend in the SSD market could become much more important for the company. Intel’s first two major products in this strategy will be the Extreme X25-E performance series as well as the X18-M and X25-M mainstream models.

The Extreme version will use single level cell (SLC) memory and offer a capacity of 32 GB in a 2.5” form factor before the end of this year. A 64 GB will follow in Q1 2009. Aimed at high performance computing, server and storage applications, the X25-E promises the highest read (up to 250 MB/s) and write speed (up to 170 MB/s) we have seen so far. The shock resistance is rated at 1000G and the reliability at 2 million hours MTBF. The power consumption is rated at 2.4 watts under (server) load and at 0.06 watts in idle state.

Before we compare these numbers to the competition, let us mention that the X18-M (1.8”) and X25-M (2.5”) models use multi level cell (MLC) technology, offer capacities of 80 GB this year and 160 GB early next year. The drives are rated at a read speed of 250 MB/s and a write speed of 70 MB/s. The power consumption is 0.15 watts under load and 0.06 watts in idle; the reliability is rated at 1.2 million hours MTBF.

While Intel claims that its specs are superior to many of its rivals (which, on paper, is true for the performance), there are a few numbers that don’t quite fit this claim. For example, the X25-E’s power consumption under load of 2.4 watts is high, even by hard drive standards. There are 2.5” hard drives in the market today that consume less power than this SSD drive.

In direct comparison, Samsung’s 1.8” 64 GB SATA SSD is rated at data transfer rates of 100 MB/s read and 80 MB/s write, but consumes much more power than the Intel mainstream drive (0.35 watt under load, 0.19 watt idle). The 64 GB PATA drive, which is rated at just 57 MB/s read and 38 MB/s write speeds is competitive with Intel in terms of power consumption – 0.17 watt under load and 0.05 watts in idle. Intel is clearly behind in terms of shock resistance, where Samsung offers 1500G, and reliability – even Samsung’s mainstream drives are rated at 2 million hours MTBF versus Intel’s 1.2 million hours.

A quick look across the market reveals that Intel should have very competitive SSDs on the market and should be able to lead the benchmarks in some disciplines. Even performance-focused products such as OCZ’s SSDs can’t match the performance at this time.

The big question remains pricing. We expect especially Samsung and Toshiba to price their 128 GB and 256 GB SSDs very aggressively and undercut current 64 GB drives from companies such as OCZ, which currently retail for more than $1000. Intel, however, could surprise the market not only with an unusual size, but also with mainstream pricing. Sounds like a reasonable strategy, especially since Intel claims to be offering mainstream SSD drives.