FWIW, I have made no secret of the fact that I believe that Sandisk, as the only pure play in NAND, belongs in any "semi growth portfolio."
The piece below is from the Sandisk thread, and is one reason for that belief. Another reason is that Sandisk is the technological leader in NAND.
The Solid State Drive Handbook — The Transformation of Storage
DANIEL AMIR- Lazard
SSD is a big theme. In this report, we take a deep dive into the Solid State Drive (SSD)
market. We see storage and particularly SSD as one of the major themes on Wall Street
for the next few years. This report provides a guide for investing in the space. We
anticipate that the storage market will go through a dramatic shift from HDDs to SSDs
that will lead to new players emerging. In this report we focus on NAND producers,
controllers, drive makers and module companies in the PC, enterprise, and mobile space.
SSD are seeing a CAGR of 40% through 2015E. Based on our analysis we expect the
SSD market to grow 40% annually through 2015. We believe that by 2012 SSDs will
consume 14% of the NAND market. The key point for wider adoption is a decline in GB
ASPs. We believe ASPs will reach $1/GB in 2H12 for consumer applications which will
be the tipping point for wider adoption in integrating SSD into notebooks.
Enterprise SSD is here now. We believe that the enterprise market has reached a stage of
wider SSD adoption as both are gravitating toward better performance, smaller form factor
and lower power devices. While we are seeing different plays on the market, e.g., SATA,
SAS, PCI Express etc., we believe there is significant potential for system vendors. The
critical part for success in enterprise is the ability to perform error correction at the
controller level. Leading hardware players like EMC, HP, IBM, and NetApp are pushing
the market toward SSD adoption in both servers in data centers and storage. We expect the
enterprise SSD market to grow 250%+ in the next three years to nearly 7M units in 2013.
PC SSD is where the volume exists. We expect the PC SSD market to grow 300%+ in
the next three years to 60.7M units in 2013. We see Apple leading the way with the “ultra
slim” notebook category. The demand by the consumer for instant-on, lower power,
mobility and smaller form factor should lead to wide success of SSD in PCs as NAND
prices come down. We expect this to occur in 2012. In addition, we see the adoption of
“cloud” as a driver for SSD, rather than a hurdle, as it is likely to lead to less local storage
(no need for 1TB HDD) and more adoption of SSD (a 128GB SSD drive).
Mobile embedded NAND units to reach 1B by 2014E. We see the rise of NAND in
handset and tablets as another indicator of SSD success. While embedded NAND is
technically not exactly a SSD, we include it in our report as we see the transformation of
embedded NAND into form factors like eMMC increasing in the next few years. This will
also help adoption of SSD into the PC and enterprise space. We see these two areas
consuming more than 40% of the NAND supply capacity in 2012.
Investment derivatives in our space. SSDs are relevant to many of our names. Overall,
we believe that in the long term the vertical business model such as that of Micron (MU-BUY),
SanDisk (SNDK-BUY), and possibly Intel (INTC-NEUTRAL) will lead these
companies to be successful, as having the NAND component will be critical for driving
costs down. We especially see SanDisk as potentially well positioned following the
acquisition of Pliant as it has the building blocks in both the PC and enterprise side to be
an important player. However, in the near- and medium term we believe the market is ripe
for many niche solutions especially in the enterprise space with companies such as Fusionio,
STEC, Anobit, and possibly OCZ if the Indilinx acquisition is successful. We also
believe there is a significant market for NAND SSD controller vendors such as Marvell
(MRVL-BUY) leading the way followed by LSI (LSI-NEUTRAL) and niche controller
players such as Silicon Motion (SIMO-BUY) or SandForce. |
