Seagate: We won't do flash, it doesn't pay

The world's largest hard drive maker Seagate is planning to bring out an enterprise solid state drive (SSD) to market for the first time by mid-2009 - but it has no plans to get into the mobile flash memory business, saying there's not enough cash to be made there.

Speaking to journalists on a visit to London, Seagate CEO Bill Watkins said: "The problem is you can't make money out of it [mobile flash memory]… I don't need to get into a market I can't make money out of. I can get into that market any time - all I have to do is show up with a product and price it. The problem is, I can't show up with a product that's any better or significantly better than what they're getting now so I have to match their price.

"And right now if you look at it whether it's Micron or Samsung or SanDisk - they're selling at a loss. To do the product is not a big deal but to make money at it - it's important to us."

He added: "When Samsung can't make money at this… it's a tough market."

The enterprise solid state drive market, however, is a business Seagate is eyeing up. "We've always been interested in solid state. It's a phenomenal technology - way over hyped but we think it's interesting," said Watkins.

Solid state drives have been gaining ground in the laptop market, with analyst IDC recently predicting the market will grow at a compound annual growth rate of 85 per cent from 2008 to 2010.

However the tech is still likely to remain a fraction of the traditional hard drive market, with IDC expecting solid state shipments to hit about 28 to 32 million units in 2010, compared to estimated hard disk drive shipments of 600 million units.

Watkins revealed Seagate's first solid state drive will be a "combo" offering - a hybrid of both SLC (single layer chip) and MLC (multilayer chip) flash memory technology. Using a combination of the two types of tech is the only way to offset the pros and cons of each, according to Watkins - with SLC being more expensive than MLC but also more reliable.

"We're putting in a lot of money into what we think will be the next technology after MLC - that technology would be something like a spin around magnetic RAM, it could be a phase shift type of process. I won't go into [details] because it's kind of proprietary but a lot of us are looking at different technologies at chip level," he added.

The company will not, however, be setting up its own fabs. "What's important to us in solid state is we're not going to get into fabs. There's only going to be at the end of the day two or three fab companies in the world," the Seagate CEO noted.

The company is also looking at designing some low cost drives for the netbook market, according to Watkins.

Asked about significant storage trends in the enterprise market, Watkins cited performance - "that's why the solid state is kind of an interesting play for us" - encryption and power consumption.

Here, flash tech could once again prove handy, according to Watkins, who described a scenario where a hybrid storage tech using flash could help datacentres cut power consumption.

"We can put a certain amount of flash - [say] 15GB flash - and we can offload power hungry functions onto the flash and not have to write, just do all the reading - and we think we can make significant power reductions," he said.

According to Watkins, businesses are keen on the idea of hardware encryption so they can have complete peace of mind about their sensitive data when the time comes to dispose of their hard drives. "We've taken disks with bullet holes and got data off them," he warned.