Historic 3 year old Post Flash-Back post #1. Any comments?
To: Steve 667 who wrote (763)
From: Jerome Wittamer Thursday, Sep 18, 1997 5:15 PM ET
Reply # of 16252
Steven,
You wanted me not to hold, OK, here we go:
First I want to tell that I'm no tech expert nor investment pro, I'm just someone who's passion has been flash memory companies for years. I've made contacts with people in the industry and thouroughly analysed their prospectuses, earnings,...blablabla
As I underlined in my previous post Sandisk may indeed be well placed in the publicly booming market for digital cameras : it is THE number ONE with no or very little competition.
But this is technically understandable since NAND based flash file management technology, i.e. CF technology boasts quicker write (not read!) cycles, in one word it's got the speed which is critical to an application such as DCs (although we're talking about almost negligible time difference compared to Linear technology). In addition, Sandisk did great marketing for its product (though not using fair practices).
But it is also a lot more expensive than NOR based flash file management technology, i.e. File Translation Layer (FTL) such as used in Intel's Miniature Card. Indeed, ATA Cards or CF cards if you prefer have an ATA controller, which is pretty costly.
There are fundamental architectural differences between FTL and ATA.
These are:
Hardware: A FTL FlashDisk includes only the Flash components and
optionally some very low cost glue logic. ATA includes in addition to
the Flash Components, an ATA controller which includes a CPU, ROM, RAM
and a significant amount of additional interface circuitry.
Software: A FTL FlashDisk includes S/W which manages the Flash media and emulates a read/write storage device over the media. This software layer is called the FTL. The ATA architecture requires a S/W layer which is simpler than the FTL driver, and implements low level access to the ATA FlashDisk. This S/W layer is usually called an ATA driver.
Since ATA requires an additional CPU inside the FlashDisk in order to
work, there is a significant cost penalty to using ATA.
The cost of the ATA controller overhead (including controller, crystal
oscillator and additional components associated with the ATA interface) is in the range of $20 to $40 (depending on whether you listen to promises or you actually have to buy), and that's at very high volumes.
This is compared to less then $2 for FTL technology. This cost
difference would translate to $30 to $60 difference in the product
price.
According to market research, about 70% of the FlashDisk market is in
the <$100 per unit retail price. That's less than $50 for the cost.
The conclusion is obvious:
1. A FTL FlashDisk will always cost less than an ATA FlashDisk
2.At the low to mid densities where most of the market is (today 4MByte, by the year 2000- at least 20MByte), the cost of a FTL FlashDisk is approximately HALF the cost of a ATA Flash Disk.
Today, FTL supports and is supported by ALL Flash components on the
market, including NOR technology from Intel, AMD, Sharp, Fujitsu,
Mitsubishi and many others. It also includes NAND technology from
Samsung, Toshiba and National Semiconductor as well as all the rest of
the current Flash component manufacturers. ATA is not supported by NOR vendors but Intel. That makes quite a difference.
CONCLUSION :
There is a clearly superior technology out there but it's not been as succesfully marketed as CF. Intel is currently trying to push it more then ever before. The war IS over in the digital camera marketplace, Sandisk WON, but as underlined in my prior post : small margins are hard to swallow, hopefully for Sandisk licence fees are coming in at fast pace. Next year margin should start going up.
Digital cameras (and hand-held organizers) are just one application and not the biggest one, there are plenty of other applications out there carrying fatter margins : networking products, telecommunications, portable field instruments, hand-held terminals, HPC and medical instruments that require ultra-reliable solid-state technology.
Did anyone see any design wins from Sandisk in these applications?
Though it does have design wins in some of these applications but its market share compared to the M-Systems/Intel Card is nowhere.
So now you know who the other player is (small but...nothing is what it seems).
This message lacks a lot of information but it's not possible for me to write everything here tonight, if you want more info, post me.
For Rex :
MAR 20, 1997, M2 Communications - INTEL CORP has revealed that its removable Flash Memory Miniature card is been used in Hewlett-Packard's PhotoSmart digital camera. Through the use of Intel's flash memory miniature card, PhotoSmart customers are able to carry as much digital film as they wish while home PC users will be provided with instant gratification through the card's direct-to-the-PC transfer capability.
Good investing,
Jerome |
