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Thread: Why does Solid state memory cost so much more than HDD?

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    Senior Member Mithrandir's Avatar
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    Question Why does Solid state memory cost so much more than HDD?

    I was just thinking, how come Solid state memory such as those in usb memory sticks and the SSD in the recent EEE laptops are expensive. Traditional hard drives seem to have so many parts to it that it must cost more. Or am I missing something in that SSD uses certain materials that are scarce or relatively expensive.

    Personally, I think the future will be SSD but the cost seems to be an issue.
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    Does he need a reason? Funkstar's Avatar
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    Re: Why does Solid state memory cost so much more than HDD?

    I think it is more to do with production volume and the technology used than the actual cost of materials.

    The equipment and chips fabrication plants are expensive to design and build so each chip produced has to go towards paying for that.

    I'm sure it isn't as simple as that though.

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    The King of Vague Steve B's Avatar
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    Re: Why does Solid state memory cost so much more than HDD?

    dont they use really high quality silicon too, which is expensive to produce? for the NAND flash SSDs they do anyway.

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    Re: Why does Solid state memory cost so much more than HDD?

    One thing I'd suspect is yield rates. One reason laptops are so much cheaper than they used to be is that yield rates on screens used to be so poor. If you make 10 and have to bin 4 of them, it drives up costs. Yield rates now are vastly better.

    But I'd guess a lot of it is economies of scale, and the hard drive market is, or at least was, rather strange. When you're producing anything, there's an element of costs that are fixed regardless of production levels, and an element that varies with production. Currently at least, hard disks are produced in vastly greater numbers, so those fixed costs per unit of production are much lower.

    Suppose you have £1,000,000 of fixed costs and sell 100,000 units. You have to recover that million quid out of those sales, so you need £10 per unit in the price just to do that. But suppose you sell 10 million units. Now, each unit only has to pay 10p towards those costs.

    On the other hand, there's a base cost level for hard drives that's never going to drop much below what it is now. You have to produce the motor, the platters themselves, bearings, the metal enclosure, the interface connections on the back, and so on. That determines a minimum feasible cost of a hard drive, regardless of capacity, and I'd bet it's pretty high compared to an equivalent minimum production cost of solid state, given comparable quantities.

    <name drop mode on>

    But the hard disk market is a pretty weird market anyway. I was talking to Finis Conner some years ago (look up Alan Shugart, Finis Conner and Seagate if you want to know who he is) at his San Francisco HQ, and he told me that there are capacity "sweet spots" for hard drives - that being the next capacity point at which manufacturers all release drives. For example, when 120MB was the largest drive, the next drive might be 220MB, or 240MB. Going for 240MB might make it comparatively expensive compared to 220MB, so if you go for 240MB and everyone else goes for 220MB, you won't sell many. But conversely, if you go for 220MB and everyone else manages 240MB at a sufficiently similar price, you probably will sell even less. And, he told me, get that calculation wrong once and your company loses money that year. Get it wrong twice on the trot and you're out of business.

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    Jay
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    Re: Why does Solid state memory cost so much more than HDD?

    due to the fact that they use THE best silicon yeil rates are lower. This will all change in time. Ijust hope they can up the write speeds.
    □ΞVΞ□

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