M-System (FLSH) vs. SSTI
M-Systems' (FLSH) DiskOnChip Millennium (DOC-M) is the world's only single-die flash disk, which makes it an optimal nonremovable data storage solution for internet appliances such as set-top boxes, smart phones, web phones, car PCs, personal digital assistants (PDAs) and network terminals. It is the lightest, smallest, least power consuming, and most cost-effective flash disk solution on the market.
At 8 MB, DOC-M has the capacity to store a typical internet appliance's operating system, applications and data files. Because DOC-M is rewritable, files can be easily updated as internet standards and applications evolve. Next year's single die 32 MB DOC-M will provide the additional capacity needed to support color displays and additional features.
M-Systems has reason to remain confident that it will maintain its #1 position despite of recently announced competition from Silicon Storage Technologies' (SSTI) ATA-Disk Chip. M-Systems' DOC-M is not only better performing, but more cost effective, since it enjoys the advantages of volume NAND flash pricing and superior product integration. Likewise its economies of scale and industry-wide motherboard support are unmatched by any competitor.
DOC 2000, DOC-M and the Competition
To understand M-Systems' strengths vs. the competition it is important to understand the differences between M-Systems' own DOC 2000 and DOC-M.
The DOC 2000 is made up of a mini-motherboard with an 8 MB flash chip (or chips), low cost logic and a few passive components, all assembled into a module.
Flash disk module solutions such as SSTI's need essentially the same components as DOC 2000, but with a more expensive and complex microcontroller instead of the low-cost logic used by M-Systems. DOC 2000 does not need a microprocessor because M-System's software is usually embedded in the Operating System (OS) allowing a direct interface with the product's CPU.
While DOC 2000 enjoys this advantage vs. the competition, DOC-M ups the ante. DOC-M takes all the discrete pieces of DOC 2000 and integrates them onto one piece of silicon.
DOC-M's single-chip flash disk consists of 8 MB of NAND flash memory, 512-bytes of RAM (providing an execute-in-place capability for the boot code)and a controller for EDC/ECC (error detection code/error correction code) logic. Combined with M-Systems' TrueFFS software, this single chip functions as a fully bootable hard drive.
Cost Advantages
Competing microprocessor-based flash disk solutions, such as SSTI's, are at a significant disadvantage to DOC-M when it comes to price. An 8 MB DOC-M sells for roughly $15 to $17 in volume. Published volume pricing for an 8 MB SSTI ATA-Disk Chip is $22, making it roughly 30% to 45% more expensive than DOC-M.
This price gap is going to be tough to close.
Roughly 95% of the cost of materials for DOC-M is the cost of the NAND flash itself. M-Systems is the world's largest NAND flash producer's largest customer (as well as Toshiba's strategic partner). SSTI's core business does not use NAND flash (although their ATA-Disk Chip does). Since it is thus not a large NAND flash customer, SSTI does not enjoy volume pricing.
As a single chip solution, M-Systems DOC-M has neither the assembly costs nor the added component costs of competitor's multi-chip packaged devices.
Economies of Scale and Customers
As the leader in flash disk shipments, M-Systems also enjoys economies of scale. In the second quarter of this year, M-Systems shipped $17.8 million of DOC to a variety of customers such as Microsoft, NCR, Samsung, Toshiba, Daewoo, Groupe Bull, PictureTel, Acer, Boca Research, Cabletron, Boundless Technologies, Crosstainment AG, CTX Opto-Electronics, Netier Technologies, Network Computing Devices, VXL Instruments, WebSurfer and others.
This impressive list promises to grow longer. In the last 12 months, M-Systems has been rolling along with an 80% win ratio among prospective customers requiring local data storage. 20% to 25% of those wins are with major accounts.
SSTI appears to still to be in the starting blocks. Company press releases have yet to acknowledge any customers for their ATA-Disk Chip.
Embedded Motherboard Support
One cost and time effective approach to product development and manufacturing in the internet appliance and embedded solutions marketplace is to use off-the-shelf motherboards. Due to its market success, DOC has industry-wide support from embedded motherboard manufacturers.
Currently, a DOC socket is designed into more than 500 different types of these boards from a variety of manufacturers. Designers choosing these boards, already have DOC pre-designed into their products.
M-Systems' DOC socket is the smallest, most cost effective interface, costing less than 5 cents. Other module solutions require a relatively expensive connector that can cost 10 times more.
While there may be motherboards with sockets built for the ATA-disk chip solutions, they have yet to be publicized. The ATA-Disk Chip will not work in DOC sockets.
Challenges of Success
With demand for DOC-M is at record levels and rising, M-Systems is scrambling to keep up. Although guaranteed monthly allotments from Toshiba will soon be increased, capacity may become inadequate.
M-Systems has been hinting that a second source (besides Toshiba) for the next generation DOC-M may be announced this year.
If this comes to pass, it will be welcome news for three reasons. First, supply constraints will be addressed. Second, M-Systems dependence on Toshiba as its only DOC-M source will be minimized. Last (and certainly not least) it will, in all likelihood, mean another very significant strategic partner for M-Systems.
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