[Peace&Chips] SSD Soars with AI Impact... Anticipation for QLC NAND Demand

Enterprise SSD Market Growing with AI Demand
QLC Meets Data Center High Capacity Needs

Samsung Electronics Mass Produces QLC-Based V9 in Q3
SK Hynix Expands Business Through Solidigm

Due to the impact of artificial intelligence (AI), the demand for memory semiconductors is gradually increasing. While the demand for high-bandwidth memory (HBM) installed in AI accelerators alongside graphics processing units (GPUs) first stood out, recently, solid-state drives (SSDs) based on NAND flash have been gaining attention as they are used in data centers, which serve as the foundation for AI expansion.

SSDs are large-capacity auxiliary storage devices. They belong to the category of alternatives that perform the same role as hard disk drives (HDDs), commonly referred to as "hard drives." While HDDs store information using mechanical parts (magnetized rotating disks), SSDs are characterized by storing data digitally in memory. They consist of NAND and controllers (system semiconductors that control the SSD).

SSDs have gradually increased their usage in the market by overcoming the drawbacks of HDDs such as noise, heat generation, and slow speed. Although the higher price compared to HDDs has been an obstacle to the expansion of the SSD market, the price gap is gradually narrowing, and with the recent emphasis on power efficiency, the demand for SSDs is increasing.

In particular, as the amount of data processed in data centers has surged due to AI expansion, the demand for enterprise SSDs has become prominent. According to market research firm TrendForce, the sales revenue of the enterprise SSD market in the first quarter surged 62.9% from the previous quarter to $3.7581 billion. There had been forecasts that SSDs would also benefit from the AI effect, and this has been proven by the figures this year.

Among enterprise SSDs, products based on QLC (quad-level cell) NAND are showing remarkable demand. NAND is classified according to how many bits of information can be stored in the smallest unit of data storage, the cell. If one cell stores 1 bit, it is called single-level cell (SLC); 2 bits, multi-level cell (MLC); 3 bits, triple-level cell (TLC); 4 bits, QLC; and 5 bits, penta-level cell (PLC).

NAND flash types classified according to the number of bits stored per cell /
[Image source=SK Hynix Newsroom]

In the case of QLC, compared to other NAND types, it stores more bits per cell, thus supporting more capacity in the same area. It is also relatively cheaper. For various reasons, it is inevitably a product suitable for data centers where large-capacity demand is increasing. However, as the number of bits stored per cell increases, performance decreases and product lifespan shortens. The technology is also considered challenging.

Currently, the companies capable of offering QLC NAND-based SSDs are Samsung Electronics and Solidigm, a NAND subsidiary of SK Hynix. Samsung Electronics and SK Hynix (including Solidigm) are major players in the enterprise SSD market, recording market shares of 47.4% and 30.4%, respectively, in the first quarter. Both companies express optimism about the growth of related business opportunities. In particular, Solidigm, which had accumulated losses until last year and was considered SK Hynix’s "pain point," has become a profit driver this year.

Samsung Electronics has announced that it will mass-produce the latest 9th generation V-NAND based on QLC in the third quarter. After the first-quarter earnings announcement, Kim Jae-jun, Vice President of Samsung Electronics’ Memory Business Division, predicted in a conference call that "the bit sales volume of server-oriented (enterprise) QLC SSDs will increase sharply to three times the level of the first half in the second half."

SK Hynix is also actively pushing forward its business with Solidigm at the forefront. Kim Seok, head of NAND marketing at SK Hynix, said in the first-quarter conference call, "To implement ultra-high-capacity eSSD (enterprise SSD), QLC-based products are necessary rather than the current market mainstream TLC," adding, "We plan to respond to demand with Solidigm’s QLC-based high-capacity eSSD solutions of over 60 terabytes (TB)."

Editor's NoteSemiconductors, often called the rice of modern industry. Although it is a term we hear every day, it is difficult to explain. Peace & Chips will make the complex concepts and overall trends of the semiconductor industry easy to understand. Just place your spoon and enjoy.