Solid State Drive (SSD) is a data storage device that can retain information, similar to a Hard Disk Drive (HDD). The difference between the two is in structure, performance and durability.
The HDD was originally in introduced by IBM (NYSE: IBM) in 1956, and includes several magnetic disks (platters) which are connected to a spindle. Each platter has a read-and-write head “flying” above the disk surface. Modern HDDs, while still using the same concept, use advanced nanotechnology, which allows an increase in storage capacities without increasing the physical sizes of the drives. Western Digital (NASDAQ:WDC) is today’s largest HHD manufacturer.
SSD’s, on the other hand, have no moving parts. Instead the drives include microchips designed to store information. As of 2014, most SSDs use NAND-based flash memory, which retains data without power. SSD’s are more resistant to shock, run quietly and faster. The price for an SSD drive is significantly higher than of a HHD drive. This may change soon however as the drives become more popular.
SanDisk (NASDAQ: SNDK), enjoyed an increase of more than 90% in sales of SSDs since last year. SSDs now account for 30% of the company’s revenue. Further increase in both client and enterprise SSDs is expected, as well as pressure from competitors.
Micron (NASDAQ: MU) already increased their focus on SSD’s, after a 50% increase in sales since the beginning of the year. The stock price of Micron jumped more than a 150% in one year and counting.
In addition, Seagate (NASDAQ: STX) is looking to increase its presence in the race by aggressive acquisitions of smaller specialist manufacturers. Seagate completed the acquisition of Xyratex in March this year, a company that provided enterprise-class data storage solutions. Soon after, Seagate announced the acquisition of the flash business from the networking semiconductor and chip manufacturer Avago Technology (NASDAQ: AVGO) for $450 million. Seagate reported their financial results for the latest quarter on July 17, with a small drop in revenue. Both acquisitions will be crucial for Seagate, as the company expects demand to bounce up by the end of the year.
Price will be the differentiating factor of the competition unfolding. Which manufacturer has the edge is difficult to say, people want the largest amount of storage they can get for the cheapest price they can find. SSDs are one of the most effective upgrades for an older PC, and enterprise-class drives are expected to become more common as well, and according to sale numbers since the beginning of the year, it is happening faster than some have predicted.