Consumers around the world increasingly use the cloud to manage and store everything from personal photos and videos to data about their daily exercise routines. In addition, real-time data created by connected devices like autonomous cars and home heating systems now fuel an emerging Data Age and an Internet of Things (IoT) economy that has the potential to dramatically change — and improve — our daily lives. Of course, this comes with a significant infrastructure cost behind the scenes: an insatiable, global appetite for data storage.
As demand for storage continues to grow worldwide, we participate in many discussions and offer much advice around the balance, interplay, and most effective roles played by two key storage technologies: hard disk drives (HDD) and Flash-based solid state drives (SSD). Based on our research, here are two key insights about these evolving data storage technologies that we believe will have the greatest impact on consumers as well as the cloud data centers and businesses who store and secure their personal data.
HAMR and 3D NAND Will Help Us Store More Data in Less Space
According to the Advanced Storage Technology Consortium, HAMR (heat-assisted magnetic recording) will be the next significant storage technology innovation. Hard drives with HAMR use lasers to heat the disks inside them to very high temperatures — up to 450° Celsius — as they record data. This helps increase the area available to store data also called the disk’s “areal density.” We believe this boost in areal density will help fuel hard drive product development and growth through 2025.
On the SSD side, we’re seeing intense focus on increasing the density of storage devices that use NAND flash memory — a type of storage technology that doesn’t require power in order to retain data. Device performance, reliability and R&D costs have been key challenges to pursuing this goal, so NAND manufacturers are now pursuing a novel 3D structure in which a NAND device’s memory layers are stacked on top of each other to boost overall density. This structure doesn’t yet offer a direct increase in density with an increased number of stacked layers. For example, a 32-layer device only offers a two- to three-fold increase in density, when factoring in the more complex and costly manufacturing process. Yet, despite the challenges, a 32-layer 3D NAND device provides a strong foundation to expand and enhance this technology to keep pace with the world’s growing storage needs.
The Balance Between Demand and Manufacturing Costs
Manufacturing NAND flash drives remains capital-intensive. According to Forward Insights, total NAND industry annual revenue is expected to grow from $30 billion today to $40 billion in the coming decade, and NAND manufacturers have typically reinvested 30 percent of their revenue into capital expenditures — dominated by semiconductor wafer fabrication needed for NAND flash drives. With NAND flash currently representing 10 percent of total semiconductor revenue, NAND manufacturers may be expected to make a proportional investment in the 3D-NAND space.
Given the growth rate, 3D-NAND fabrication investments might equal as much as $90 billion from now through 2025. According to data from various industry analyst reports, there are 12 manufacturing facilities building 2D-NAND wafers in the world today, capable of generating 138 exabytes of storage per year — of which 55 exabytes will be directed towards SSDs. (The remaining exabytes will go towards consumer devices such as mobile phones, tablets, wearables and a range of other applications.)
The investment to build a new medium-sized 2D-NAND manufacturing facility capable of creating 5 exabytes of storage per year is $4 billion to $5 billion. If we fast-forward to 2025, a medium-sized 3D-NAND manufacturing facility capable of creating 80 exabytes of storage per year will take an investment of $8 billion to $10 billion. So, based on information from industry sources, these conservative assumptions about new wafer manufacturing facilities and upgrades to existing facilities, along with estimates that at least 50 percent of NAND wafers will go to non-SSD applications, we’d estimate approximately 400 exabytes will be available for SSDs in 2025.
So what does this mean for the average consumer?
With the continued advances in hard drive areal density with HAMR, and given the comparative development and manufacturing costs, hard drives will continue to offer a lower average cost per gigabyte. And that’s a good thing for enterprise and consumers depending on rapid data storage growth, because most of our projection scenarios show hard drive demand in 2025 will be about 10 times higher than demand for SSDs.
The bottom line: both hard drive and SSD technologies will remain critical to addressing the world’s increasing data storage demand, with the growing storage market in 2025 likely splitting 80-90 percent hard drives and 10-20 percent SSDs. Consumers – as well as the companies that store their data – will continue to leverage a mix of these technologies depending on their specific needs to access, secure and manage that information to enhance our daily lives.
Seagate Senior Director Brendan A. Lafferty is responsible for developing next-generation read-write transducer technology for new storage products.
Seagate Senior Director Steven Cate is responsible for direct silicon manufacturing operations.