How Cheap is Flash?

Fry's Advertisement: 32GB Patriot USB for $17The Memory Guy was a little surprised to see the advertisement in this post’s graphic.  It was from an April 8 newspaper ad for Fry’s Electronics.

It’s a little early to see NAND selling for this little: The original price of $21.99 for a 32GB USB flash drive comes to $0.69/GB, and the price after the rebate of $16.99 means that the price per gigabyte of the flash is only $0.53!

At the time the lowest spot market pricing for MLC flash on the InSpectrum spot price website was $0.53, and $0.47 for TLC.  According to DRAMeXchange MLC is selling for as little as $0.48.

That’s not a lot of margin for Patriot or Fry’s when you add in the cost of the controller, connector, housing, other components, and assembly!  If we assume (conservatively) that all this costs $0.75, and that the flash sold for $0.47/GB, the total cost would come to $15.79, giving a scant $1.20 for Fry’s and Patriot to haggle over.  Since our estimate was conservative, this $1.20 is likely much larger than these companies’ combined take-home.

Note that Fry’s limits sales to one per customer.  The two companies may be selling these at a loss as a promotion.

Even so, Objective Analysis expects flash prices to decrease even further.  The market is in an oversupply, and the cost to manufacture 20nm MLC NAND flash is around $0.35/GB, which puts IMFT and SanDisk/Toshiba in a very good position, but should be painful for Hynix, and especially Samsung, who have fallen behind their competition in process scaling.

Objective Analysis has published a report: Understanding the NAND Market, that explains how NAND flash price dynamics work, and gives insight to the market.  This report can be ordered for immediate download on the Objective Analysis website.