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In the solid-state disk business, the first quarter of the calendar year is normally the so-called “off-season,” in which the market cools down a little after a busy year. Then each quarter ramps back up as production of personal computers, desktop PCs, tablets and other devices gets into gear.
True to form, in Q1 2018 the global SSD market recorded notably fewer stock-up orders from PC makers compared with Q4 2017, according to industry analyst DRAMeXchange. So, as markets inevitably do, SSD suppliers cut prices to enhance original equipment manufacturers’ willingness to adopt their new 64/72-layer 3D-SSD products.
Many of these are made by Intel-Micron in the form of 3D Xpoint memory storage chips, which are now starting to ramp up in production.
For Q1 2018, the average contract prices of mainstream client SSDs for PC OEMs are estimated to drop by 3 percent to 5 percent in the SATA-SSD sector and 4 percent to 6 percent in the PCIe (Peripheral Component Interconnect Express)-SSD sector compared to the previous quarter.
For the 2Q18, SSD suppliers will continue to expand their capacity of 64/72-layer 3D SSD, but the growth momentum of demand remains weak, resulting in slight oversupply of SSD. DRAMeXchange said in a media advisory that it expects the contract prices of mainstream SSD products to continue to decline in the second quarter.
Alan Chen, research director at DRAMeXchange, said in the advisory that PC OEMs are now buying more conservatively than they did in 2H17, due to soaring SSD prices.
“As the result, the average adoption rate of SSD in notebooks was only 45 percent in 2017, lower than original expectation,” Chen said. “This figure is expected to go beyond 50 percent this year as the SSD prices drop.”
In addition, the decline in SSD prices also will drive the mainstream capacity of SSDs in the PC OEM market to 256GB. Forthcoming 512GB products will not become the mainstream until 2019 or 2020 because the prices of that specification will not be able to reach a satisfactory level for buyers this year, Chen said.
The penetration rate of PCIe SSDs will rise quickly, driven by wider support by platforms and lower costs, Chen said.Suppliers that include SK Hynix, WD/Toshiba, Micron and Intel, have all put 64/72-layer SSD products into mass production since 1Q18, so the penetration rate of 3D-TLC architecture in client SSD market has a chance to reach 70 percent in 2018, he said.
For the long term, NAND flash manufacturers are currently developing 3D-QLC Flash technology, which can achieve higher capacity in single chip with more competitive costs. It is expected to enter mass production in the second half of 2018 at the earliest. Once this technology goes mature, SSD devices will be more cost-effective, and it will be faster for SSD to replace HDD, Chen said.
Intel started to ship 3D Xpoint SSD products to the PC OEM market in 2017 and also launched new products of 280/480GB in the channel market. However, these products thus far have only been adopted in the high-end business market and gaming PC market due to the low performance-cost ratio.