Flash memory prices will continue to drop over the next month or more, according to one securities firm that says Apple's iPhone 3G and other new, hot hand-helds are about the only thing that is likely to stabilize NAND memory's cost. Avi Cohen, head of research at Avian Securities LLC, is reporting that spot pricing for both DRAM and NAND memory chips are contining to drop week-over-week, as most large resellers continue "to stay away from making large-scale DRAM purchases.
"There's been an over supply of NAND for almost a year now. Everyone keeps hoping for that over supply to end," Cohen said. "NAND pricing has fallen off a fair amount and taken the memory manufacturers down with it."
Prices for both MLC [multi-layer cell) and SLC [single-layer cell) NAND is down 10% to 20%, Cohen said, who expects prices to continue eroding for next 2 to 6 weeks before some stabilization occurs. Currently, an 8Gbit NAND memory chip -- used for high--density MLC solid state disk -- is selling for about $2.30, according to Avian Securities LLC.
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Cohen said industry "sources expressed" optimism that Apples 3G iPhone, which was released this week, will have some impact on solid state memory pricing, but not until the second build of the product goes out sometime around mid-July.
Cohen noted that Apple doesn't produce enough product to meet initial demand in a first release but after measuring uptake, it normally fulfills demand by increasing production -- creating a surge in sales.
Nokia is also expected to release two flagship handhelds in the August/September time frame -- the N96 and the E71, which should also give a boost to the arm of NAND manufactures and further help to stabilize NAND prices, Cohen said.
"On DRAM we remain skeptical even as we head into the better seasonal period," he said.
NAND solid state disk (SSD) memory, or flash memory, is still vastly more expensive than traditional spinning hard disk, but Cohen said while it won't be on price parity over the next five years, SSD will reach a point in about 18 months when it will be as attractive to buy as traditinoal hard disk drive storage - particularly for portable devices.
"What will happen is for portable devices NAND will be good enough to have 160GB at a relatively attractive price point - say $100 - but you'll still be able to get a 500GB hard drive at the same price," he said. "But you don't need a 500GB drive on your notebook."
While users may have to sacrifice capacity in buying SSD over hard disk drives, they'll eventually gain vastly superior speed, reliabilty and battery life, he said.