Earlier this month, Samsung (NASDAQOTH:SSNLF) started shipping review samples of the 850 Pro, its new solid-state drive that promises drastically faster write speeds, greater endurance, and reduced power consumption compared to existing products. Lying behind this is a significant advance in flash technology that points to a major, ongoing shift in the storage industry. Let's take a closer look at the 850 Pro, and what it might mean for Samsung and its main flash competitors, Micron (NASDAQ:MU) and SanDisk (UNKNOWN:SNDK.DL).
A bit of background
In the flash industry, cost and performance improvements have traditionally been made by shrinking the size of the chip. This approach has worked well for years, but it is quickly coming to an end. Each new attempt to shrink the die is becoming technologically more difficult, and, as a result, economically less feasible. It is estimated that at most two further generations of smaller chips are possible, and by 2016, the shrinking trend will have reached its limit.
All is not lost, however. Rather than continuing to squeeze more transistors onto a smaller die, flash producers have been working on technologies to additionally stack transistors on top of each other. In this way, they can keep improving flash performance, while at the same time using larger, more reliable, and less expensive production nodes. Flash chips produced in this way are called 3D NAND, or in Samsung's case, vertical NAND (V-NAND).
The 850 Pro
Enter Samsung's 850 Pro, the first consumer 3D NAND solid-state drive. The 850 Pro is based on Samsung's second generation of 3D NAND technology, which entered mass production earlier this year. So far, the new drive has only shipped to reviewers, but it should become available for purchase on July 21st.
According to Samsung, the 850 Pro features twice the write speed, twice the endurance, and 20% lower power consumption than comparable products using conventional flash. Uniformly positive reviews support this, and show the 850 Pro topping a number of different performance benchmarks.
So far, the only drawback seems to be the suggested price, which is between $30 and $130 higher than comparable planar NAND drives, depending on the capacity. However, there doesn't appear to be any core technical reason why 3D NAND should remain significantly more expensive than planar NAND. As 3D NAND technology matures, die yields will improve, and the price is likely to come down.
What this means for the competition
Two of Samsung's primary competitors in the flash production market, Micron and SanDisk, have also been looking to solid-state drives as a major area of growth. Both Micron and SanDisk are developing 3D NAND, but they are not as far along as Samsung, and have not released any 3D NAND products yet. Neither company expects to have significant 3D NAND production until the second half of 2015, or possibly even until 2016.
The current, planar form of NAND flash will remain relevant as 3D NAND is being developed and released, and as its price continues to decrease. It is possible that SanDisk and Micron will be ready with their own 3D NAND by the time that the new technology begins to clearly overtake the old. However, it seems quite likely that Samsung has a head start of at least a few quarters, and that it will benefit accordingly from 3D NAND in 2015 and 2016.
Samsung has started mass production of a new form of flash memory called 3D NAND, which is expected to replace the current versions of flash in the coming years. This month, Samsung is releasing the first consumer 3D NAND solid-state drive, which tops competitors' products in performance and which has received highly positive reviews. While SanDisk and Micron are also working on 3D NAND, Samsung will probably benefit thanks to its technological lead.
Srdjan Bejakovic has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.