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SSD Vendors Collaborate to Cut R&D Costs, Speed Deliveries

As manufacturing costs soar, major players in the emerging solid-state disk and NAND technologies markets have entered into partnerships to share costs and speed development. But do these arrangements bring benefits to the market, or do they introduce risk factors for future product development and protection of intellectual property?

"Partnering in the SSD and NAND areas has been very beneficial for us," said Brendan Collins, vice president of product marketing for Hitachi, which has partnered with Intel on SAS and Fibre Channel SSDs. "Partnering reduces manufacturing costs, but it also cuts our research and development expense." Collins did not specify how much Hitachi's R&D expense was reduced.

Micron Technology cut its R&D expense (as well as its manufacturing costs) by nearly 50 percent by sharing development work with Intel on 34-nm NAND and with Nanya Technology of Taiwan on DRAM, says Bill Lauer, senior director of marketing for Micron. "Research and development runs into hundreds of millions of dollars, so to be able to cost-share R&D is a pure cash flow benefit for us."

Collaborating on product development also allows companies to work from their areas of core competency. "The Intel-Hitachi relationship is a prime example," says Jess Janukowicz, SSD research manager for industry researcher IDC. "Here you have a NAND supplier in Intel teaming with a storage company like Hitachi. This brings a different set of skills to the market. Intel brings the process technology and manufacturing expertise, and Hitachi brings the customer needs and solution sets. This combination brings value. I don't know if there is any downside to these kinds of partnerships."

Nevertheless, there is a risk. What happens when partnerships dissolve?

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