Flash memory is the future

Western Digital has announced it is purchasing SanDisk for $19 billion, signaling it is ready to accept that flash memory is too important to ignore. Sales of HDDs are expected to drop about 6 percent this year to $30.9 billion, while flash memory sales are expected to increase 9 percent to $31.3 billion. SanDisk has long been a strong competitor in the latter category and currently holds about 14.8 percent of the NAND flash memory market.

HDDs are still important, of course. They are much cheaper than solid state drives and other flash memory, and are better suited for servers and high-capacity computers. As mobile continues to become more important, however, SSDs will continue to gain market share. Flash is already prevalent thanks to USB thumb drives and smartphones. Now, SSDs are becoming the storage option of choice for slim, highly mobile notebook computers such as the MacBook Air and Microsoft's Surface tablets and the new Surface Book laptop. As it stands, SSDs were only used in 15 percent of new notebooks last year. Western Digital appears to have recognized that this won't be the case forever, though.

Western Digital's acquisition of SanDisk is just the latest in move toward increased consolidation in the semiconductor industry. Mergers and acquisitions in the industry have topped $100 billion this year by one estimate from Dealogic, according to the Wall Street Journal. The SanDisk acquisition is the second largest after Avago Technologies' acquisition of Broadcom for $36.6 billion. With Western Digital already the largest HDD supplier and soon to be the "broadest supplier of data-storage components," according to the Wall Street Journal, there could be "new pricing pressure in the storage market." Betting on the future of flash storage remains a smart move, but the industry is increasingly looking for ways to boost profit margins in an industry with slowing growth.

See a comparison table of selected USB flash drive suppliers on GlobalSources.com