Sun, Rivals Seek New Uses for Flash-Based Storage

By DON CLARK.WSJ.03/10/09

Chips called flash memory that have transformed many consumer products are beginning to shake up corporate computer rooms, with Sun Microsystems Inc. emerging as a surprise innovator.


The computer maker, though it lags rivals in data-storage hardware, has been pushing a redesign of servers and storage systems to take advantage of flash-memory chips. In its latest gambit, Sun is trying to popularize a tiny circuit board that can squeeze more flash chips, saving money, space and electricity.

But other companies are pushing rival flash-based products, which are emerging as one of few bright spots as corporations scale back their technology buying because of the recession.

"It's been growing extraordinarily fast, so it's a major focus area for us in 2009," said Bob Wambach, senior director of high-end storage marketing at EMC Corp., which added flash-based storage systems in January 2008.
[sun microsystems flash memory] Stec Inc.

Flash-memory chips became a mainstay of portable devices like iPod music players because they retain data when electrical current is switched off. They are also faster than disk drives; flash-based alternatives called SSDs, for solid-state drives, allow computers to boot up and retrieve files quickly.

Speed improvements in disk drives have been slower. So companies that need high performance have faced costly options.

They include expensive drives that spin at very high speeds, and arrays of drives that store data near the outside edge of disks so it can be fetched quickly.

Companies such as Stec Inc. and Texas Memory Systems Inc. began offering storage modules based on flash memory for military and commercial customers with specialized needs. Such products have gotten more affordable, as competition among chip makers to serve the much larger consumer market has caused prices to plunge. EMC uses such "enterprise" SSDs, as they are called, as does Sun in storage systems it introduced in November.

The price of flash-based technology remains high. Jim Handy, an analyst at the research firm Objective Analysis, estimates that a 500-gigabyte hard drive costs makers of storage systems around $50, where an enterprise SSD that stores 32 gigabytes would cost them $3,000. Factoring in the speed difference, however, the flash-based technology is less expensive in terms of the cost of handling transactions per second, he estimates.

Another concept is to use flash memory as a kind of accelerator. Backers of the approach include Fusion-io and Violin Memory Inc.; Texas Memories is offering a similar product Tuesday.

But some customers worry that flash chips can fail if data is written and erased too many times. Addressing that issue was a major focus of Michael Cornwell, who helped Apple Inc. develop flash-based devices such as the iPod and joined Sun in 2007.

Mr. Cornwell, Sun's lead technologist for flash memory, approached chip makers that include Samsung Electronics Co. to modify their products. The companies estimate the collaboration brought a five-fold increase in the endurance of Samsung's flash chips.

Rather than simply replacing hard disks, Mr. Cornwell favors new combinations that exploit DRAM and two kinds of flash chips -- one best at reading data, and another at storing it -- along with high-capacity disk drives. He estimates such a "hybrid" storage pool fetches data 3.2 times faster than conventional alternatives and save electrical power.

Sun also plans to produce compact servers with no disk drives. "We have some really compelling designs coming out," Mr. Cornwell said.

Sun is proposing that other companies follow its lead in installing flash chips on circuit boards measuring about 69 millimeters by 30 millimeters, less than a third the size of a typical drive-sized SSD. This "open storage module," also allows air to flow more efficiently to cool servers, Mr. Cornwell said.

Gene Ruth, an analyst at the Burton Group, notes that other companies have their own ideas about the best way to exploit flash technology. But the right combination could produce "a killer product that will change the industry. And I think that Sun has a leg up there," he said.

Write to Don Clark at don.clark@wsj.com

DRAM prices spike after Qimonda bankruptcy.

DRAM prices spiked last week over supply concerns after Qimonda filed for bankruptcy protection.
Dan Nystedt (IDG News Service) 02/02/2009 12:06:00


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DRAM chip prices spiked last week over supply concerns after chip maker Qimonda filed for bankruptcy protection in Germany, and prices will likely continue to climb, Gartner said Monday.

The price of the most popular 1Gb (gigabit) chip rose as much as 16 percent compared to a week earlier, the market researcher said in its Semiconductor DQ Monday Report. DRAM prices across all capacities increased 8.7 percent on average compared to a week earlier.

Prices will likely move higher this week, warned Gartner analyst Andrew Norwood.

"The full effect of [the Qimonda] news will not be felt until the brokers and traders in Asia respond to the news," he wrote in the report.

The biggest spot market for DRAM is in China, where the bulk of the world's desktops and laptops are assembled. But last week was a public holiday for China and much of the rest of Asia, where people celebrate the Lunar New Year. When traders in the region return to work on Monday, they may send prices higher.

DRAM chips are produced in such volume that a spot market exists for them, where traders buy and sell them like commodities such as oil and gold. Similar to how a disrupted pipeline or fighting in a sensitive area may cause oil prices to rise, major shocks to the DRAM market, like Qimonda's bankruptcy filing, can cause DRAM prices to spike. Around three-fourths of all DRAM go into PCs.

Over the longer term, DRAM prices are likely to trend downward again.

The DRAM market continues to face significant oversupply, so much so that even if Qimonda stopped production immediately, which it has not, there is plenty of DRAM available to meet all needs, according to market researcher IDC.

"The market's situation was created by significant over-investment in capacity during 2007 and early 2008 — periods of demand that often exceeded expectations — that has led to significant oversupply today," IDC said in a report last week.

Falling demand for computers and other electronic devices amid the global economic downturn has also reduced demand for DRAM.

IDC predicts the global DRAM market will shrink 12.1 percent this year to US$22.84 billion because of oversupply and bloated inventories. Revenue in the market declined 17 percent last year to $25.98 billion.

The DRAM market will not recover until the second half of 2010 when global demand for electronic devices recovers, IDC said.