SSDs are among the fastest growing technology areas in electronics. Growth of 40-80% per year in units has been typical since 2006. Questions about "when will they completely replace HDDs" are common for technical and business people alike.
As with most technology areas, Manufacturing is a huge factor in business success. Some topics in SSD Manufacturing:
1) Most SSD OEMS outsource some or all of their SSD manufacturing. Outsourcing to contract manufacturers is prevalent in the electronics industry. SSDs are no different. Flexible capacity, ability to achieve low costs through volume, minimal capital spending, time to market are all great reasons to outsource SSD manufacturing. EMS/ODM providers include top systems and memory module companies.
2) Many SSD OEMs utilize 3rd part controllers and designs. Controller companies like Silicon Motion, Phison, Marvell, Maxiotek and the former Sandforce can provide controllers and reference designs. While most companies strive to develop internal controllers, 3rd party controllers and designs are widespread in consumer and client SSDs. These controller companies work with NAND vendors to develop advanced error correction and features and may outperform internal controllers made by NAND manufacturers. They definitely have the development and time to market expertise.
3) Consumer and Client SSDs are under tremendous price pressure. A simple look at NAND ASPs compared to Client SSD ASPs will show that SSDs are under margin pressure. There is not much, if any, margin added by the non-NAND portion. How do we deal with this reality? Outsource to minimize engineering and manufacturing cost. It is difficult to spend millions on engineering in a segment with minimal margin uplift.
4) Form factors are changing and difficult to predict. All form factors generally move to smaller solutions ... but predicting exactly when is difficult. Most companies balance the future form factor (M.2/BGA) volumes with the conservative old form factor (2.5"). Outsource companies can provide all form factors and even design custom ones with minimal engineering cost.
5) The above comments apply well to Intel, Sandisk, WD, Micron, Toshiba, Lite-on, Kingston, etc. Two companies are obviously different. Samsung has large enough scale and engineering resource to support controllers, internal manufacturing on a wide variety of designs. As long as they can execute and not run out of resources as form factors and interfaces change, that is great. Second, Apple is famous for custom interfaces and form factors and these pop in Macbook teardowns. They always look for internal processor support to meet needs. The strategy for custom engineering and the high margins on their products allow this.
For more specifics and numbers on SSD manufacturing and what strategy is best, contact us today
Mark Webb
MKW Ventures Consulting LLC.
www.mkwventures.com
SSD Manufacturing
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