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STEC, Inc. Message Board

  • warrioger warrioger Aug 12, 2010 8:46 AM Flag

    Seagate and Samsung team up on solid state drives

    Thu Aug 12, 2010 8:30am EDT

    * Seagate and Samsung will jointly develop SSD controllers

    * To work together on enterprise-class SSD devices

    * Enterprise SSD market seen growing to 6 million units

    By Alex Dobuzinskis

    SAN FRANCISCO, Aug 12 (Reuters) - Seagate Technology (STX.O) and Samsung Electronics Co Ltd (005930.KS) have agreed to jointly develop a key component of solid state drives, to tackle a small but growing segment of the storage industry.

    Seagate, the No. 1 hard-drive manufacturer by revenue, and Samsung, Asia's largest electronics company by sales, agreed to develop controller technologies for SSDs.

    The two companies said on Thursday they hoped to play off each others' technological strengths via a partnership aimed at tackling the corporate market for so-called SSDs, considered faster and more rugged -- but far costlier -- than traditional drives.

    Such devices are increasingly common in notebooks and tablet computers such as Apple Inc's (AAPL.O) iPad, but make up only a fraction of enterprise-class storage, an area with higher profit margins.

    "They are sending a signal to their major (original equipment manufacturers) to be prepared" for a new class of enterprise-quality SSD devices, said John Monroe, research vice president of data center systems with Gartner.

    Controllers are key to how SSDs perform, managing banks of flash memory in such a way that the devices do not deteriorate over time -- a common problem with the drives.

    Seagate already sells SSDs for enterprise customers under its Pulsar line, released in December 2009.

    Whatever comes out of the partnership with Samsung will be an improvement on that line, said Dave Mosley, executive vice president of sales, marketing and product line management.

    "It's probably a 2012 product, not tomorrow," Mosley said. "There may be possibilities earlier than that, depending on how the (intellectual property) develops."

    Seagate and Samsung would not say how much they are investing in their partnership.

    Total shipments of enterprise-grade SSD devices are expected to surpass 700,000 units this year, compared to more than 50 million shipments of hard disk drives for that market, Monroe said.

    But shipments of enterprise-grade SSD devices are expected to grow to 6 million units by 2013 or 2014, he said.

    Until now, Seagate has partnered with privately owned SandForce Inc on controller technology for its SSDs. Mosley said it is still to be determined if Seagate will continue to work with SandForce in the future.

    For its SSD line, Hitachi Ltd (6501.T) partnered with chipmaker Intel Corp (INTC.O) to develop controllers.

    Seagate's archrival, Western Digital Corp (WDC.N), the No. 2 hard drive manufacturer by revenue, has not introduced any SSD devices for the enterprise segment nor disclosed any deal with other companies to develop controller technology. (Reporting by Alex Dobuzinskis: Editing by Gary Hill)

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    • The premise is that NAND manufacturers will be competitive because they actually make the NAND that goes into enterprise SSD's. That logic seems flawed to me. By that measure they should have been able to trip and fall their way into dominance of any of these other NAND centric markets. In reality, they haven't dominated any of the value add end markets they supply. If they get lucky fine, if not, no biggie.

      So, what are they doing in SSDs? The fabs are so expensive that they only pay if the market grows big and fast. I think they are seeding market growth and their own market share in a commodity business where they all need and want the market to grow big and fast.

      They don't really want to pick winners - they want the market to grow. At the moment, STEC represents a bit of a bottle neck. The market can grow faster if there is more SSD competition. Therefore, partner with everyone that represents a source of competition. Thats how I see it.

    • I'm not sure what you're saying here. Are you saying the NAND manufacturers passed up the chance to make/market their own MP3 players, cell phones, etc.?

    • No, thank you.

      The NAND manufacturers have watched every previous market opportunity pass them bye - music players, cell phones, military SSDs. I'm pretty sure that they will knock this one out of the park.

      Next thing you know, Intel will be making computers.

    • Would you like Seagate's stock price right now? :)

    • Yes they did:
      http://www.wdc.com/en/company/releases/PressRelease.asp?release={0e640fb5-2931-4bc0-8595-7a6abc20fb5a}

    • Sandforce isn't cutting it for Seagate?
      Hitachi and Intel are now sampling a drive 2.5 years after Zeus 1.0
      Samsung and Seagate will have a drive in 2012. right.

      8,500% market growth rushing towards us and they don't have a product yet?

      STEC is rolling out Generation 4.0
      STEC's price/book is 2.4X

      Some kind of value isn't being reflected in STEC's share price.

      • 1 Reply to anahernez
      • Good news, I think:

        1) As Ana writes, clearly STX needed more than SandForce to compete with STEC in the enterprise space.

        2) STX sees the Enterprise opportunity as being significant enough to ditch Sand Force and seek another partner. Same with Samsung--the potential market is large enough to justify a joint venture.

        3) This also validates what Manouch and others have been saying for quite some time: Developing and enterprise SSD that performs to the rigorous specs of OEMs is not easy. STEC has been working on it for a decade or more. Sure, STX is bigger, INTC is bigger, Hitachi is bigger....but they haven't produced ANYTHING yet.

        Others here have speculated that PCIe would rule the day, or that just a couple of SSDs would be used in lieu of large banks of drives...thereby crushing STEC's market. Again, this release suggests that STX and Samsung, at least, see the market as being decently large to justify their investment.

 
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