Cost of NAND flash spikes

The cost of NAND flash rose dramatically over the last half year, making solid state drives less attractive to the netbook market.

A report by iSuppli says average pricing for 16-gigabit density multi-level cell flash memory jumped from $1.80 in the fourth quarter of 2008 to $4.10 in the second quarter of this year — an increase of 127.8 percent. NAND flash memory accounts for 90 percent of SSD cost, according to iSuppli analyst Michael Yang.

The price increase can be blamed partly on a weak market. To account for low demand, manufacturers cut capacity, which in turn boosted costs even as SSD sales remained weak, iSuppli says. Ars Technica also suspects that market speculation — the same kind that manipulates oil prices — along with increased consumer interest in SSD played a role in jacking up prices.

Down the line, iSuppli expects NAND flash prices to decline, but even in 2010 the market research group doesn’t see a return to Q4 2008 levels. All of this puts SSD on hold as the replacement for hard disc drives, because high prices will remain a concern for the forseeable future.

One winner, according to Ars, is Samsung, who took heavy losses at the end of last year in large part because of falling LCD and flash prices. The company is now expecting to beat analysts’ expectations for the next quarter, and the rebound in flash prices are a likely factor.

That is, of course, no consolation to the consumer, who’s merely trying to decide whether fast access, low noise and extra battery life is worth the additional expense.