August 22, 2007 2:42 PM PDT

Seagate to make flash-based hard drives

Posted by Michael Kanellos

Seagate Technology, the number one maker of magnetic hard drives, is going to make hard drives based around flash memory too, says CEO Bill Watkins.

"We are going to have a solid state drive, probably for enterprise first," he said during an interview on Wednesday. "We think we can make these drives better."

Seagate's decision is a significant turning point in the religious war in the storage market. The flash versus magnetic debate has been issue No. 1 in the storage world for the past two years. Magnetic hard drives have been a crucial component for servers, PCs and notebooks for years. Magnetic hard drives cost far less in terms of cost per gigabyte and typically hold more data than flash devices. At CompUSA, a 500GB desktop drive on sale sells for $109, or as much as two 4GB flash drives. The price disparity exists at wholesale too.

Flash memory makers, however, have been increasing the density of their products and lowering the price. In turn, flash has managed to chase magnetic hard drives out of the MP3 player market. Notebooks with flash drives began appearing this year. Some flash manufacturers say blade servers are next. Flash consumes less energy, say proponents, is more reliable and faster at retrieving data.

Rather than try to fight the trend, Seagate is going to cover all the bases. Besides, the storage component--flash chips or magnetic platters--are only one component of a drive, said Watkins. There are also chips, boards and lots of software.

"This has a million lines of code in it," Watkins said, holding up a hard drive. "The million lines of code make it a solution."

The flash-based notebooks on the market today, he said, are "ten years behind."

Seagate doesn't have flash-based drives in the wings at the moment. Right now, the Scotts Valley-based company is looking for a company to sell it flash chips.

Samsung is the number one producer of NAND flash in the world, but Samsung also sells hard drives. Still, there are many other vendors, including Micron Technologies, which don't make their own drives.

Flash drives will likely never dominate the storage market. There's just too much data out there, said Watkins. But flash drives might account for 7 or so percent of the drive market, he speculated.

The opportunity for flash drives will mostly be in the 400GB to 500GB space a few years from now. Currently, 64GB flashed-based drives for notebooks cost a few hundred dollars.

In 2012, 500GB might cost $50 while 50GB of flash might sell for the same, he said.

Seagate currently makes hybrid drives, which are regular magnetic drives with some flash included.

Interestingly, Seagate once owned a big piece of flash giant SanDisk.