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Samsung Electronics hopes that falling prices for flash memory chips will mean solid-state memory can eventually replace hard drives in laptop computers and other devices, a top executive says.

The South Korean company recently made its first step towards this goal with the announcement of a prototype 16GB drive based on flash chips.

Flash memory has several advantages over hard-disk drive storage: it consumes less power, it has higher resistance to shock, it's more reliable because there are no moving parts, it can read and write data faster, and it's silent in operation. But there's a major hurdle to mass-market adoption: it's much more expensive.

Prices to Drop?

Samsung is betting that price difference will erode if double-digit percentage price drops in the flash memory market continue and so the market for flash-based storage will broaden, says Hwang Chang-Gyu, president and CEO of Samsung's semiconductor business. He spoke to reporters in a briefing at the company's main chip production complex in Giheung, South Korea, south of Seoul.

Hwang cites flash memory price drops of around 40 percent in the last year as evidence that flash is quickly getting much cheaper.

"This will be big once people enjoy how much faster and convenient it is to use solid-state disks rather than hard-disk drives," Hwang says. "We're starting with 16GB and expanding to 100GB in a couple of years."

Samsung hasn't announced the price of the 16GB drive yet, but the target markets for the product--military and industrial computing--are typically willing to pay a premium for technology. The drive is packaged in a case the same size as a 2.5-inch hard drive so it can be used as a direct replacement for these drives. Samsung has also announced 8GB and 4GB versions that will be a similar size to 1.8-inch drives.

The company has good reason to be championing flash memory. It's the world's number one producer of flash chips with revenue more than double that of second-ranked Intel, according to iSuppli. In contrast it ranked fifth in market share in the hard drive market in 2004, according to IDC.