You can't make devices that deal with motors and rare earth magnets and spinning platters coated with ruthenium and other rare materials at insanely exacting tolerances, encapsulated in hermetically sealed Helium bubbles for cheaper than you can photolithographically lay out a bunch of NAND gates in cheap bulk semiconductors. There really isn't any word for it other than absurd. And the fact that NAND chips are in literally EVERYTHING means they are commoditized. Which means economies of scale make them cost almost nothing to manufacture. And yet... it still costs you 4x or more to get an SSD rather than several pounds of spinning metal? Nah, that's not how things work without help.
Why stop with microwaves? Why not make platters out of pure gold and the read/write heads out of synthetic diamond? Maybe integrate a cryogenic cooling system and store the data in a Bose-Einstein condensate? At this point it seems people will believe even that is cheaper than some NAND chips run off a line like printouts.
Western Digital's gross margins are 40%, while Micron's gross margins are around 46%. This suggests that the margins of both NAND chips and Spinning Hard Drive rust are roughly equivalent at current market prices (at least, within a magnitude or so).
Large-scale manufacturing turns out to be efficient. At the moment, prices suggest that Hard Drives are indeed far more efficient to make.
If your hypothetical were true, then we'd expect Micron's gross margins to be larger. From my understanding, the high-tech NAND gates have a relatively low yield. Yields on bulk semiconductors are no where near as good as the yields of Hard Drives.
If Google can make their own processing unit just for running ML, why aren't they also making their own SSDs to drastically decrease storage costs and improve storage performance?
There are only a handful of fabs making the required NAND chips. Spinning up a new fab takes years and hundreds of millions of dollars, not to mention some serious technological and manufacturing know how. So it's really not easy for someone to just up and enter the NAND market.
I don't exactly doubt that price fixing is happening, but my understanding of current high SSD and even RAM prices at the moment is that there is a serious demand that outstrips the current fabs abilities. Mobile devices are eating up a lot of the NAND output.
In the case of GPUs they can turn a defective GPU into a lower tier GPU by disabling malfunctioning components, which means that it isn't a total loss. I doubt NAND chips can be salvaged in the same way. Since they are so simple, there's nothing to recover. It goes straight into the bin.
NAND does actually have a degree of flaws it can tolerate as they are made today in consumer SSDs. I am not certain, but SLC Enterprise SSDs made for database servers and the like might get the best yield chips I'd guess. On consumer grade devices, there is an amount of 'slack' space that the chips actually can accomodate that is used for relocating data from damaged areas, wear levelling, some bookkeeping, etc. So if you buy a 1TB SSD, there might be enough actual storage on the chips to hold 1.1TB if all of it was made available. I'd not be surprised if particularly bad runs come out and get binned as 512GB devices because large portions of the chips are unreliable.
Kinda like how ladders are rated: they say 300Lbs .. it'll probably take more than double that - but if it breaks when you overload it, the manufacturer can point to the rating and say, "you exceeded its spec"
So, yes, SSDs will improve. But they exist in a different tier/market segment until they can close that cost gap.
WD might expect the price-fixing will continue for several more years, though. The corrupt South Korean administration dropped their investigation into price-fixing in the NAND market several months back. I don't know what impact that will have on the general international effort to prove the collusion that seems so obvious.
I just want a 20TB SSD for $500. It's 2017 and no, that's not too much to ask. They're friggin parallel grids of NAND gates with a bunch of multiplexor/demultiplexors bolted on. All photolithography. I don't need them to be those tiny little M.2 sticks, go ahead and give me one in a friggin 5.25" case. At this point they've gone about a mile past where I got fed up with this crap.
Another important factor to remember is that your HDD will give you 200 MB/s of sequential data. If you have a random pattern it's going to drop to 10 MB/s or less. (15K RPM SAS drives can do around 150-170 random IOPS, assume 32 KB per operation and you're looking at 6 MB/s.) SSD will push out 10x+ that rate for random IOPS. A 100 TB HDD sitting behind 200 MB/s is painful but sitting behind 5 MB/s is insane. There's a place for such devices, but it's not serving your OLTP databases or kafka message queues.
And 60 TB in 3.5": https://arstechnica.com/gadgets/2016/08/seagate-unveils-60tb...
No spinning rust drive comes close.
My perception of the future is maybe a 20TB SSD for $2000 vs 15TB HDDs for $500.
Why not both?
WD bought SansDisk for a reason. WD is likely going to be investing in both Hard Drives AND NAND Flash in the near future.
I'm curious what the other factors are beyond just the cost per TB/PB in each rack. Like reliability over very long time scales... beyond the cost factor and into archival territory. Or in an emergency or destructive scenario (i.e. do platter drives fair better in a fire than SSDs)
It's hard to actually rewrite spinning rust 2000 times a year. That's exceeding 100% utilization with completely optimal sequential write pattern on 7200 RPM drives. Say you can write 200 MB/s continuously. That's about 6 PB/year. With a 6 TB harddrive, that's only 1000 full overwrites a year.
Maybe 10k or 15k RPM drives can overwrite 2000 times a year, but those have vastly higher cost than 7200 RPM drives. At some point, you just overprovision the flash enough to bring the number of required overwrites down, and it's still cheaper than 10-15k RPM drives.
: Approximately average for enterprise drives: http://www.tomsitpro.com/articles/enterprise-hdd-testing,2-8...
They mentioned that they'd be hosting an event with innovation announcements months ago. Some traders would have been buying WD stock in anticipation of that event, and wagering whether or not that included MAMR, HAMR, etc, and what each of those possibilities would mean to the company outlook.
The event and the article describing the MAMR breakthrough were posted yesterday at 9:30 AM PT. Your 'window of opportunity' to respond to the article was the few moments it took to figure out which of your guesses about what they'd announce were confirmed or refuted at the event. Even then, you may have been reading it literally by eye, while your competition was parsing it with NLP, using a gigabit connection and server located near the wdc.com servers, or perhaps using ones near the stock exchange.
As a result of this preparation, concurrent with the announcement and market open, the stock 'jumped' from 84.27 to 86.22, and a somewhat remarkable volume of 917k shares were traded instead of their daily average of 144k shares, but have since moved around a bit and are gradually settling in:
In short: you're literally 24 hours behind the real market. Don't try to play it minute by minute based on Anandtech or HN publications.
But don't let that discourage you from buying companies based on what you believe their long-term outlook to be. Or maybe do that, and just buy into mutual or index funds instead.
But discussions like this on a news/analysis piece by a fairly technical new source combined with above average human intelligence will project a more likely outcome.
The stock may go up on this news like you mentioned. But it more often than not settles down. But if OPs time horizon is medium term(a few quarters) or more, then its worth investing on such news.