Major SSD firms have initiated price reductions to reflect falling prices for NAND flash chips. The move is also aimed at triggering a price war in the market in an attempt to squeeze out smaller peers, according to industry sources in Taiwan.

A number of channel retailers, which usually sell commodity memory products including flash drives and memory cards, recently began to offer SSDs, the sources observed. Some of the leading SSD producers are concerned about inferior products that might disrupt development of the market, and therefore have resorted to price-cutting measures to force the retailers to leave the market, the sources indicated.

Kingston Technology, Intel, OCZ and Crucial are identified as the ones lowering SSD prices.

In addition, SSD vendors hope to speed up the industry transition from SATA2 to SATA3 by narrowing the price gap between the two product segments, the sources noted. Prices for SATA3 SSDs are now only NT$300 (US$10) higher than those for SATA2 ones, the sources said.

The availability of SATA3 has been identified as a new demand driver for SSDs in 2012. Transition to the new, faster interface is expected to upgrade the mainstream capacity from the current 32GB and 64GB to 128GB and 256GB.