A couple of weeks ago, I spoke to IR at SanDisk. She mentioned that Cisco was replacing hard drives on routers with flash memory. Another interesting question is when they will handle back up power via the phone line, but that's another area.
Still, I think the common use of information storage in things like computers will remain on hard disk drives, but clearly the greatest growth challenges are for mobile applications and the assorted network connectivity that will be applied to everyday devices. Hard drives just don't meet this challenge.
The issue today with flash is production constraint. If they could produce more, we would see a great wave of new applications. I saw a video camera from Sharp that would record over 2 hours on a 64 meg cf card the size of a postage stamp. The camera was hardly bigger than a pack of cigarettes.
In 2 years, they'll have 4 gig chips. No moving parts. Small. No battery needed to back up. Work like a Palm Pilot, instant on, instant off.
These things don't damage the need for disk drives. It's more a question of business models. The market for flash is more stable because there is a patent holder. They have a production constraint and a demand that goes off the map. Compare that to a market where no player has IP that makes any product advantage in a world where capacity out ways demand, and new capacity can be brought on line at will.
So, that leaves you playing mood swings in a bombed out sector where there is possibly a chance to see a demand imbalance. It seems to me that until this changes, there's not much reason to bring out the pom poms.
Does anyone find it interesting that there was no end of year rise? Lets face it, the market has too many high growth stories to park good money in these stocks.
Regards,
Mark
PS FRAM memory might even be doing better. Here's a story where a card in your wallet can be detected and cause a turnstyle at a metro to charge you for a ride. Here you don't even need a MPU. Just a plastic card with a chip that doesn't even need to leave your pants. |
