Memory market to balance out in 2009

Too many companies producing memory chips have caused prices to fall

The memory market is expected to reach some sort of equilibrium next year, as consolidation helps to correct some of the imbalances in the sector, according to memory maker Kingston Technology.

"As the impact of the economic downturn starts to hit home, it is likely that some of the smaller players in the memory market will have increasing difficulties and may not survive," said John Tu, president and co-founder of Kingston Technology.

"Too many companies producing memory chips have caused prices to fall over the last months and consolidation should help the industry correct itself."

Tu foresees demand for Flash memory continuing to grow, particularly for high-capacity, high-performance Secure Digital cards as users adopt high-definition video and photographic devices.

"Secure Digital High Capacity currently has a ceiling of 32GB, but this format may change during 2009 to enable the production of higher capacities," he said.

However, the increased demand for Flash memory will further drive the need to protect data stored on any removable storage device.

"The rise in the number of high-profile data loss scandals has shown that data is at risk when the proper procedures are not in place and the right technology is not used to ensure that data isn't so vulnerable," said Tu.

"The next year will see the demand for hardware-encrypted USB Flash drives to increase as well as the capacities that are on offer."

Although Tu expects increased demand for removable Flash memory, he does not see solid state drives (SSDs) becoming fully mainstream next year, despite their popularity for use in netbooks.

Although vendors will continue to invest in the technology, he believes SSDs are still too costly when compared to traditional hard drives.

Tu maintained that the technology will continue to mature, having gone through some reliability growing pains this year, and that a higher level of industry standards will emerge as SSDs gain traction.

Virtualisation will continue to be a hot topic, according to Tu, and will remain at the top of the IT manager's agenda.

"With regards to memory, IT managers are likely to start looking at ways to get increased return on investment and improved total cost of ownership from their virtualisation projects," he said.

"This is likely to come from increasing the memory capacity for virtual servers. Higher memory capacity also enables improved virtual machine performance and scalability."

Green IT will also continue to be a talking point, but the focus will shift even further to the associated cost savings rather than the direct environmental impact.

"Spiralling energy costs are impacting everyone, so if companies can use lower energy IT equipment it won't be solely for ecological reasons but because it is good for the bottom line," he concluded.