In essence it’s because both the HDD industry and the semiconductor industry have set goals for themselves to achieve 30% average annual price reductions. If they are both on the same trajectory, and if there’s an order of magnitude difference between HDD and SSD prices today, then there will be an order of magnitude difference in the future as well.
The 30% average annual decline in SSD prices has a convenient name: Moore’s Law. Although there’s no physical, economic, or other restriction behind Moore’s Law (so it’s not really a law at all) it serves as a guide for the industry. Chip makers set their sights at doubling the number of transistors on a chip every couple of years, and this equates to average annual price decreases of 30%.
The HDD business also sets goals for itself, mapping out the industry’s planned areal densities (bits per square millimeter of HDD surface) several years in advance. This is managed by IDEMA (International Disk Drive Equipment & Materials Association), and is called the ASTC (Advanced Storage Technology Consortium).
ASTC has recently posted its 2016 technology roadmap, which is shown in this post’s graphic and can be downloaded as a pdf document. This roadmap illustrates how the HDD industry plans to increase areal density by 30% per year, effectively cutting prices by a similar amount, since disk drive prices for the leading capacity tend to remain around $50. The graphic tells us that this will be achieved by migrating to shingled media, then HAMR, then BPM.
What do these acronyms mean? ASTC has a useful FAQ page that, among other things, explains BPM (Bit Patterned Media) and HAMR (Heat Assisted Magnetic Recording) technologies and why future HDDs will need to use them.
The bottom line is that HDDs and SSDs are being driven to cost-reduce at similar rates, and this will prevent SSD prices from crossing over HDD prices through at least 2025, and probably longer.
My company, Objective Analysis, helps our clients to understand such outlooks and assists them in developing strategies to succeed in markets with predictable events like these. Please contact us to explore ways that we can help your company achieve its goals.