Welcome to the Age Of Flash Memory.

Byline: B.J. Lee

The iPod Nano is already behind the cutting edge--and that's good news. What makes this slender device so cool, of course, is Apple's use of so-called flash memory chips, which can hold songs and other data even if the battery runs out. Hard-disk drives in the bigger iPods do the same thing, of course, but they're bulkier and, because they have mechanical parts, are prone to crashing in the same way PC drives do. Apple put 16 2-gigabit flash memory chips in each iPod Nano--enough to hold 1,000 songs. But the 2-gigabit chips are already obsolete. After the Nano hit the shelves, Samsung introduced a single flash-memory chip that holds 16 gigabits--eight times more than the iPod chips. In light of the new chips, the Nano appears to be a harbinger of a new generation of slender, portable devices based on flash memory.

Flash memory has been around for years--it's what holds the data in most cell phones, digital cameras and MP3 players. In recent years, though, flash chips have been too expensive and too small to hold the kind of data needed in PCs. But the chips have adhered well to Moore's Law--that computers double in speed and capacity every 18 months. Samsung, for instance, introduced 4-gigabit chips two years ago and 8-gigabit chips last year. Its new 16-gigabit chips have features (wires and transistors) that are only 50 nano-meters wide, one two-thousandth the thickness of a human hair. The smaller the feature size, the more memory can be crammed onto each chip. Placed on a single printed-circuit card, 16 of these 16-gigabit chips can store 8,000 MP3 music files or 20 DVD movies.

As a result, prices of flash memory have dropped about 50 percent (per unit of memory) for each of the past two years. A 1-gigabit chip now sells for about $6 wholesale. Thanks to the Nano, demand will only continue to rise. Samsung knocked 30 percent off the price of its 2-gigabit chips for Apple--which plans to buy 40 percent of Samsung's output of these chips for the Nano--largely to spur adoption of its particular type of flash technology, called NAND, which is faster and holds more data, at the expense of the NOR technology promoted by Intel, which can handle data more easily. Samsung's gamble on ...