CES 2008 has now come and gone. This show was quite a contrast to CES 2007.
Citigroup (CITI) put it well in describing this year’s SanDisk CES as “modest.” Last year was anything but. The SanDisk CES theme for 2007 was five new products for five mega-markets. As 2007 played out, the story turned out to be a case of over-promising and under-delivering.
Far better to under-promise and then over-deliver. SanDisk seems to have figured this one out.
Eli took advantage of the limelight this year to tell the SanDisk story in simple broad strokes. Product introductions were unassuming.
New SanDisk Products announced at CES
The graphic below illustrates the seven new products that CITI chose to illustrate.
No headline material in the above products. Personally think SanDisk has decided to play its more exciting cards later. Why not? Mr. Market doesn’t seem to care right now anyway.
At CES Eli even got some potentially negative near-term news out: SanDisk’s MLC Solid State Disk (SSD) will be a 2009 story at least in terms of significant revenues:
Q: How close are you to developing a controller for the MLC?
Eli: Because we understand the complexities of MLC and the issues of MLC probably better than any other company, I think that we are taking a little bit longer time than just rushing out with an announcement.
Its a tough challenge. The SSD requirements for a notebook computer or a server are far more challenging and demanding. We are very confident that we’ll have very reliable MLC-based SSD products.
I think that right now we’re looking at the second half of this year sampling. We think that 2008 will still be a developmental sampling year and 2009 will be a much more significant year.
FWIW, my take is that SanDisk has decided that its going to take 43nm NAND to hit acceptable price points for SSDs. Probably a good call. Apple’s recently announced MacBook Air features an optional 64 GB SSD for a $999 top-up. A bit pricey to be a hit.
Would not be surprised if next year in 2009 that same 64 GB SSD is down to $499. It should be downhill from there as SSDs gradually take over the laptop market on ever lower pricing. Apple is known for being ahead of the curve, and in this case that curve is SSD adoption.
Will be shocked if next year’s SanDisk CES doesn’t show off best-priced, best-performing MLC SSDs. SanDisk may end up being relatively late to the MLC SSD party but sometimes fashionably late works. In this case I expect it will.
At CES, Eli also (wisely) decided to tone down the SanDisk anti-Apple rhetoric:
Q: On software, as we go through the show, this year, last year and probably next year, software is becoming more and more important in consumer electronics if you listen to Bill Gates yesterday or Jobs, at MacWorld, they all talk about the heart of the system is the software.
What is SanDisk’s strategy? How many software engineers do you have and how many do you plan to hire over the next few years?
Eli: We don’t want to play against Microsoft, or Apple, where they are very strong. We understand our strengths. We want to work with partners that bring their strengths in the software to provide an environment and an ecosystem and an infrastructure that allows their software to shine.
Of course to the extent that ultimately we have to have mastery of portions of that, we will either have it, or develop it or acquire it.
So what isn’t SanDisk telling us about the product pipeline for 2008?
Vaulter is likely sampling at notebook PC OEMs today and likely will appear in laptops in the second half of 2008.
The announced 12GB MicroSDHC card, not shown in above CITI graphic, may be x3. Figure we should know one way or the other by analyst day. Maybe as soon as Q4 results. In any case, x3 is one of the many significant, (currently) unappreciated SanDisk stories for 2008.
The video-centric Sansa, to compete with the iPod touch, is likely a 2H 2008 story. From a most interesting December 2007 interview with NBC U president of digital distribution, Jean-Briac:
Will NBCU’s deal support portable devices when Fanfare supports them?
They (SanDisk) are looking to launch Sansa View — an iPod-like portable device for September rollout next year.
September 2008 fits the timeframe for the rollout of the first products incorporating Google’s Android OS. SanDisk needs a slick OS with integrated applications to take on the iPod touch. The fit with Android would be seem to be good.
When Eli said, “We want to work with partners that bring their strengths in the software to provide an environment and an ecosystem and an infrastructure that allows their software to shine,” he could be thinking Android.
On 5 December 2007 SanDisk filed for a trademark for the name Sansa Fuze. While the name Sansa Fuze could apply to any Sansa audio/video product, I’m guessing that this will be the player mentioned by Jean-Briac: the SanDisk answer to Apple’s iPod touch. Fuze could be short for fusion, or the combination/integration of music, videos, the internet, photos etc.
Another product possibility for 2008 is SanDisk’s Matrix three-dimensional layered memory technology slated for affordable, consumable, one-time-use memory cards. At analyst day in February 2007, Greg Rhine noted that pilots were beginning for the product and that we would see it in the marketplace in the middle of 2007.
I don’t know about anyone else out there, but I haven’t seen or heard about the product. SanDisk has been noticeably quiet about these one-time-programmable (OTP) cards since analyst day 2007: No press releases or mentions in conference calls. What happened is anyone’s guess.
My guess is that NAND prices dropped so fast in 2007 that the Matrix tech at 80nm, which was scheduled for the second half of 2007, was not competitive with NAND at 56nm. Why bother with OTP when reprogrammable cards are cheaper?
SanDisk’s plan has been to make the jump to 45 nm for 3D OTP in 2008/2009. Whether SanDisk can accomplish this in 2008, might be answered on analyst day. I would think that 3D @ 45 nm would have the edge cost-wise over NAND MLC and x3 at 43 nm. After all SNDK has said that it sees Matrix 3D as x4 to x8 equivalent. Whether the potential cost advantage of 3D OTP at 45 nm is enough for a low cost OTP card would seem to be anyone’s guess.
In a related matter, Eli has said a decision will be made in 2008 as to how to proceed with in-house 3D chip production. Right now SanDisk’s 3D chips are not being produced in the Toshiba/SanDisk fabs.
As discussed in the past, my guess is that SNDK has been waiting to make such a decision until it has a much better idea of progress being made with the technology. Probably the biggest unknown is potentially the biggest deal: read/write (R/W).
SanDisk’s Matrix 3D chip technology is something entirely different from NAND. It is not a variation of floating gate or charge trapping, but something referred to as antifuse. Instead of storing electrical charges, the chip has gazillions of microscopic fuses. When info is read to the chip, fuses are either blown or left alone, storing the info permanently (up to 100 years).
Current commercial Matrix 3D is only OTP. It stores data just fine, but only once. The chip is not re-programable. SanDisk has been working on turning this OTP into R/W. Judging from the patent applications in the pipeline, SanDisk has figured this baby out. My guess is that working prototypes exist. Whether SanDisk will be able to deliver a commercially viable R/W Matrix 3D product remains to be seen.
In any case, one of the interesting things about SNDK’s 3D R/W technology as described in patent applications, is that the same technology and chips purportedly will work for both OTP and R/W. Its all in the programming.
If the chip is going to be OTP a lot of current is used and the “fuses” burn away, storing info permanently. For R/W programming, less current is used and the fuses act like switches. Another interesting and promising angle is that more than one resistance state can be accommodated by the “fuses” thereby allowing more bits to be stored, like MLC. And of course all this works in 3 dimensions with many layers.
Another product likely in the pipeline for 2008 is the Microsoft and SanDisk U3 successor for USB flash drives and flash memory cards. By coupling computing power added to USB drives and memory cards with an onboard software platform, U3 promised a portable personalized computing environment.
In May of 2007, Microsoft teamed with SanDisk “to deliver a next-generation software and hardware solution to place application programs and personal customization on USB flash drives and flash memory cards, expanding on and replacing SanDisk’s existing U3 Smart Technology.”
The first of these SanDisk/MIcrosoft enabled products are expected to be commercially available starting in the second half of 2008. Microsoft is purportedly developing the software while SanDisk is working on new hardware integration, including the addition of TrustedFlash security technology.
Curiously, as promising as these unannounced products are, SanDisk doesn’t appear to need them to have a most productive 2008. The mobile monster appears to be in the house. I suspect that estimates for mobile card and embedded NAND demand have been underestimated and by the second half of 2008 SanDisk will be profiting accordingly. Time will tell.