According to the reports from EETimes China and Blocks &Files, Western Digital (WD) is said to be considering spinning off its NAND and SSD business, which could be valued similarly to Solidigm.

Reportedly, WD plans to split into two separate business units: one focused on producing hard disk drives (HDDs) and the other on NAND flash memory and SSDs. This strategy is expected to enhance operational efficiency within each unit, allowing them to concentrate on their core strengths and ultimately achieve greater market value.

According to the report, WD CEO David Goeckeler will lead the NAND and SSD unit, while Executive Vice President of Global Operations Irving Tan will take on the role of CEO for the HDD business

Citing calculations by an analyst, the report notes that  the standalone value of WD’s NAND and SSD business could range from USD 10 billion to 22 billion. This suggests that spinning off these businesses could lead to a higher market valuation for the company.

The report states that the market has not yet fully recognized the value of WD’s NAND business, and that the combined independent value of the two companies post-split will be at least USD 30 billion, with the potential to exceed USD 40 billion.

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• [News] WD and FADU to Co-Develop Enterprise SSD Technology
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(Photo credit: Western Digital)

On June 26, American memory manufacturer Micron announced its financial results for the third quarter of the 2024 fiscal year (ending May 30, 2024) after the market closed: revenue increased by 82% year-over-year (17% quarter-over-quarter) to $6.811 billion; Non-GAAP diluted earnings per share (EPS) were reported at $0.62, better than the $0.42 of the second quarter of the 2024 fiscal year and the diluted loss per share of $1.43 in the third quarter of the 2023 fiscal year.

Micron further estimates that for the fourth quarter of the 2024 fiscal year, revenue and Non-GAAP diluted EPS will be $7.6 billion (plus or minus $200 million) and $1.08 (plus or minus $0.08), respectively.

Per a Bloomberg report on June 26th, some sources expect Micron’s fourth-quarter revenue to exceed USD 8 billion.

Micron CEO Sanjay Mehrotra stated in a press release that the improving market conditions and strong price and cost execution drove the financial outperformance. Reportedly, Micron’s total fiscal Q3 revenue was USD 6.8 billion, up 17% sequentially and up 82% year over year.

Mehrotra also noted that Micron’s market share for high-margin AI-related product categories such as HBM (high-bandwidth memory), high-capacity DIMMs and data center SSDs continue to rise. Meanwhile, Micron is also gaining share in data center SSD, reaching new revenue and market share records in this important product category.

Mehrotra stated during the earnings call that strong AI-driven demand for data center products has led to tight capacity for advanced processes. Therefore, despite steady recent demand for personal computers (PCs) and smartphones, Micron expects prices to continue rising throughout 2024 (January to December).

Micron CEO Sanjay Mehrotra further addressed, “In the data center, rapidly growing AI demand enabled us to grow our revenue by over 50% on a sequential basis.” He then pointed out, “…we can deliver a substantial revenue record in fiscal 2025, with significantly improved profitability underpinned by our ongoing portfolio shift to higher-margin products.”

Looking ahead to 2025, the growing demand for AI PCs, AI smartphones, and data center AI creates a favorable environment, giving Micron confidence in achieving substantial revenue records in the 2025 fiscal year. This is expected to significantly boost profitability as the product mix continues to shift towards higher-margin products.

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(Photo credit: Micron)

Recently, Korean SSD controller manufacturer FADU announced a partnership with Western Digital to co-develop the next-generation enterprise SSD technology called “FDP (Flexible Data Placement).”

FDP is a standard technology proposed by the Open Compute Project (OCP) and is a newly approved NVMe specification (TP4146) initiated by companies such as Samsung, Meta, and Google. It aims to reduce write amplification while simplifying the integration of the entire software ecosystem.

According to a report from WeChat account DRAMeXchange, this technology not only enhances SSD performance but also significantly extends SSD lifespan.

By markedly reducing the phenomenon of “Write Amplification,” FDP can improve SSD write performance by 2 to 3 times and optimize data placement within SSD storage space. This phenomenon, when the recorded data volume is much larger than the actual client data volume, will greatly extend SSD lifespan, making it a highly regarded technological innovation in massive data exchange environments of large-scale data centers.

• WD and FADU Pioneer the Establishment of a New Standard for Memory Efficiency

Founded in 2015, FADU is a fabless startup primarily developing advanced NAND flash technologies to meet the explosive growth of data storage needs in hyperscale, enterprise, and cloud data centers. FADU is committed to producing high-performance SSD controllers and designing chips for data centers.

FADU aims to increase its market share in the SSD controller field to 30% by 2026. FADU’s CEO, Jihyo Lee, stated at an IPO briefing in July 2023 that global data centers used 50 million SSD controllers at that time, and the demand might double to 100 million in the next 2-3 years.

As a globally renowned memory manufacturer, Western Digital achieved revenues of USD 1.71 billion in 1Q24, a 2.4% increase from the previous quarter. However, due to a limited product line, Western Digital’s revenue in the Enterprise SSD sector for the quarter was USD 133 million, only up by 18.1% QoQ.

It’s worth noting that in 2Q24, the overall consumer market not yet recovers and the outlooks for PC and smartphone market for the year are conservative. Against this backdrop, Western Digital intends to accelerate Enterprise SSD product development to expand future growth momentum.

Western Digital is also aggressively pursuing shipments of high-capacity storage products, with plans to mass-produce 162-layer QLC SSDs. To accelerate the production of PCIe 5.0 SSDs, the company is collaborating with third-party controller manufacturers, breaking its tradition of in-house IC development. This strategic move underscores Western Digital’s efforts to expand its product range and support steady growth in enterprise SSD revenue.

For this collaboration, FADU and Western Digital predict that widespread adoption of FDP technology will not only help bring down total cost of ownership (TCO) but also establish a new standard for memory efficiency.

Amidst the AI wave, the importance of high-capacity, high-performance storage products is becoming increasingly prominent. HBM is undoubtedly the most sought-after product currently, with demand outbalancing supply and market value continuously rising. Meanwhile, new memory technologies are constantly emerging, heralding the coming of an era of 3D DRAM. Besides, SCM potential is about to be unleashed, and PCIe 6.0/7.0 is poised to be launched.

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• [News] Memory Giant WD out of the Red in 1Q24 Driven by the AI Wave, 2Q24 to Keep Improving

(Photo credit: WD)

The sweeping AI wave not only keeps AI chips in the market spotlight but also ushers in a new round of opportunities for the memory market. Recently, Citibank announced that SSD will replace HDD in the AI field, citing SSD’s faster speed, which are more suitable for AI training. It is reported that data centers of top US tech companies are shifting from HDD to enterprise SSD.

From consumer electronics to enterprise markets, and now in the era of AI, the battle between SSD and HDD is underway once again .

• Can SSD Fully Replace HDD?

Industry sources point out that SSD surpass HDD by nearly 10 times in terms of access speed, while HDD boasts the advantage of lower cost.

According to a previous report from Nikkei Asia, in recent years, as NAND Flash prices declined in a downward cycle, the cost gap between SSD and HDD has begun to narrow, enabling SSD to gradually replace HDD in some fields. For instance, in consumer PC storage devices below 2TB, HDD have been phased out and replaced by SSD.

This seems to indicate that SSD has significantly outpaced HDD, but it is still difficult to say that SSD will completely replace HDD. After all, compared to consumer products, data centers have higher performance requirements for SSD. Furthermore, from a cost perspective, enterprises face significant pressure if they want to fully substitute SSD for HDD.

The current AI boom has provided opportunities for the development of both HDD and SSD, with a surge in demand for high-capacity products leading to price increases.

Industry sources reveal that HDD manufacturers reduced supply due to poor market conditions last year. With the arrival of the AI wave, supply of HDD outbalanced demand in 2H23, driving prices higher. From 3Q23 to 1Q24, HDD prices have increased by 10-20% overall. The latest reports show that Western Digital has recently notified customers of continuous price increases for HDD products. Industry sources expect HDD market prices to continue to rise in 2Q24, with increases ranging from 5% to 10%.

Likewise, SSD market is also facing supply shortages, especially in the enterprise SSD segment. TrendForce predicts a strong increase of about 13-18% in NAND Flash contract prices in 2Q24, with enterprise SSD contract prices expected to increase by 20-25% QoQ, representing the highest among all product lines.

At present, SSD and HDD are expected to coexist and progress together. However, looking ahead to the future, some memory manufacturers hope that SSD can continue to advance and even replace HDD.

In 2023, Shawn Rosemarin, Vice President of Research and Development Department of Pure Storage, stated that HDD would be completely phased out within 5 years. HDD consume too much power; 3% of global electricity used for data centers, and one-third of this power consumption comes from storage systems, the majority of which are mechanical hard drives. The cost difference in operating such large-scale deployments is striking. If the storage device is shifted to SSD, power consumption will be reduced by 80-90%.

However, HDD manufacturers have countered this statement. Rainer Kaese, Senior Manager of HDD Business Development Department at Toshiba, believes that HDD will continue to exist for some time. In the long run, they will continue to be cheaper than SSD, and data center engineers will develop more efficient HDD to meet stricter power consumption requirements.

The debate between these two sides reveals the respective strengths and weaknesses of SSD and HDD. As manufacturers continue to enhance performance, reduce costs, and lower power consumption, the competition between SSD and HDD is expected to continue in the future.

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• [News] Western Digital Customer Letter Confirms HDD Supply Shortage! NAND Flash and Hard Drive Prices Continue to Rise
• [News] SSD Prices Keep Rising

(Photo credit: Western Digital)

The demand for large-capacity HDD products driven by the artificial intelligence market has caused overall HDD prices to surge. According to the latest updates, American memory giant Western Digital confirmed for the first time on April 8th that there is a supply shortage for both HDD and SSD. They issued formal customer letters notifying of ongoing price adjustments for NAND Flash and hard drive products.

Western Digital stated that the demand for both flash memory and hard drive products has exceeded expectations, leading to supply constraints. These challenges in the electronics industry’s supply chain further affect availability. This quarter, they will continue to adjust prices for flash memory and hard drive products, with some changes taking immediate effect.

These updates apply across the company’s entire product portfolio, and Western Digital indicated that pricing adjustments will be frequent in the future. Additionally, the company’s ability to handle unplanned demand and orders is quite limited, so any order changes require early notification. They also anticipate that unplanned demand may lead to extended delivery lead times.

TechNews’ report further point out that, combining current market reports, the overall price increase for HDDs has accumulated between 10% to 20% from the third quarter of 2023 to the first quarter of this year, due to memory manufacturers implementing production reduction strategies aimed at quantity-based pricing.

Industry sources cited by TechNews’ report anticipate that the tight supply situation for large-capacity HDD products will continue into this quarter and potentially extend throughout the year. Specifically, HDD prices are expected to continue rising in the second quarter of this year, with an anticipated increase of 5% to 10%.

As per TrendForce’s  data for 3Q23, Samsung maintained its position as the top global NAND flash memory manufacturer, commanding a significant market share of 31.4%. Following closely, SK Group secured the second position with a 20.2% market share. Western Digital occupied the third position with a market share of 16.9%, while Japan’s Kioxia held a 14.5% market share.

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• [News] AI Market Growth Rescues HDD, Driving Half-Year Price Surge of 20%
• [News] SSD Prices Keep Rising

(Photo credit: Western Digital)