If you use a smartphone or a digital camera, you are probably already a big user of flash storage cards.

NAND (negated AND) technology allows for persistent electronic data storage that isn’t erased when power is lost. Furthermore, since it is a fully solid-state electronic data storage technology, it doesn’t suffer the drawbacks of moving parts and bulkiness associated with hard drives.

Since NAND flash storage components are small and rugged, they are perfect for small mobile devices such as smartphones. With the use of a memory card, a user’s data are also easily ported from one device to another.

These natural advantages of flash memory have driven sharp growth for the flash industry.

Demand is being driven not only by smartphones, however. Tablet computers have also become a major source of demand for flash storage, and notebook computers are beginning to replace hard drives with flash as well.

IHS iSuppli, a technology market analysis firm, projects the NAND flash memory market to grow 150% over the next four years.

Although I expect flash memory technology will eventually be replaced by something better, it will still be the nonvolatile memory mainstay in mobile devices for years to come.

The smartphone market, for example, is the fastest-growing consumer product category in history. Since smartphone adoption is growing so quickly, and since most smartphones incorporate flash card slots, a lead supplier of NAND flash card controllers — the circuits that manage the flow of data in and out of memory — would be a company well worth investing in.

Semiconductor fabricators are able to squeeze increasing numbers of electronic elements into a given area of silicon real estate. Thanks to improving fabrication technology, flash memory chips are also growing smaller, and the amount of data they can store is growing larger. This leads to lower prices for flash memory. Lower prices, in turn, mean that flash memory is being integrated into more and more products. And every time flash memory is used, a controller circuit is needed.

Smaller, denser flash sounds great, but it doesn’t come without drawbacks. Every time flash fabrication technology shrinks, which happens about once a year, the performance of the memory degrades. For example, flash memory circuits with smaller elements aren’t as good at storing data for a long period of time as larger ones. They are, therefore, less reliable. This means more-advanced memory controllers are needed with superior error correction in case an element on a chip fails. It also means memory controllers require predictive algorithms to identify which memory elements are likely to fail next.

This is a good thing for companies with proprietary technology that want to advance the mobile device industry in a big way.

High end products are already moving toward the rapidly growing nonmobile SSD (solid state drive) market. Apple was the first company to introduce a laptop computer that replaced the traditional hard drive with a solid-state drive. Now Intel’s new “Ultrabook” platform will drive further adoption of the new data storage technology.

Hard drives have become a major bottleneck in computer performance. Processor and memory speeds have continually improved. Unfortunately, the speed at which we can access data off a rapidly rotating disk has not kept pace. SSDs, however, fill the performance gap left by hard drives. SSDs haven’t been widely used before, because the cost has been prohibitive. That is now beginning to change with SSD drives becoming available.

Other storage devices on the market are hybrids combining both a hard drive and a solid-state drive in the same housing. These are hard drives with a NAND cache. In these hybrid drives, the storage controller monitors which data a computer needs to access the most and keeps the data on the faster NAND memory. It also looks ahead to predict what data will be required next, and moves it to the cache ahead of time. Hybrid drives are an attempt to combine the high-speed performance of solid-state memory with the lower costs and greater capacity of hard disk technology.

Last year, one company in our Technology Profits Confidential portfolio entered that market with SSD controller solutions. A lot of its early units are being used in industrial applications and high-end networking equipment. The company is also targeting SSD drives in PCs. There are already hybrid storage devices integrating the company’s advanced controller technology available at major retailers.

Ad lucrum per scientia (toward wealth through science),

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Ray Blanco

While other eighth graders were out playing soccer, Ray Blanco was in his basement learning how to build what’s called a “Wilson Cloud Chamber” – a supercooled device for detecting particles of ionizing radiation. Now, he is an expert in advanced robotics, avionics, genomics, and biotechnology. Blanco was raised in Miami, FL, after his family fled Cuba in the 1960s. He is co-editor of Technology Profits Confidential and contributes to Breakthrough Technology Alert.

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