Aug 21, 2010 08:54 GMT  ·  By

Though solid state drives have practically surpassed hard drives in most areas, except that of capacity, they haven't exactly taken off as quickly as they could have because of their prices, and while iSupply predicts that NAND chips may finally reach the critical price point of $1 per Gigabyte, there are concerns that this reduction may come too late. For the entire fourth quarter, iSupply estimates the price of 1GB 3-bit per cell (TLC) NAND flash memory to average $1.20, dropping to $1 only at the end of the year.

Compared to the first quarter of this year, this will be a solid drop, as TLC sold for $1.80 per gigabyte, and 2-bit per cell MLC Flash for $2.05.

The only other time when MLC fell below the $1 threshold was in the fourth quarter of 2008, when it sold for 90 cents per gigabyte.

“When NAND pricing first fell below the $1 level at the end of 2008, many observers opined that its would sound the starting gun for solid state storage, allowing the technology to be cost competitive with Hard Disk Drives (HDDs) in PCs for the first time,” said Michael Yang, senior analyst for memory and storage at iSuppli.

“However, during the following quarters, pricing rose because of strong demand and constrained production capacity, limiting the appeal of SSDs to low-volume servers in data centers and preventing widespread adoption in high-volume business and consumer PCs," he added.

According to the market analysts, NAND memory will have to drop in price by 40 cents by 2012, otherwise it won't be able to compete with hard drive storage.

This would imply that a 100GB SSD be priced at $50, and this would make them far more appealing on the PC and corporate computer markets.

"With NAND pricing having returned to per-GB pricing levels not seen in two years, there's likely to be a lot of new buzz created for the solid state storage market at the end of 2010," Yang said.

"However, traditional HDDs gained a lot of additional ground during the past few years in terms of rising capacity and falling prices. In fact, HDDs have gained so much ground that SSDs now are in danger of never regaining their competitive footing."

As for the short term, if market conditions actually enable the $1 price point, the NAND Flash memory industry will score a record $5 billion in revenues in the third quarter.