Orders for solid state drives (SSDs) have slowed in the first quarter (Q1) of 2018 compared with the fourth quarter (Q4) of 2017, which isn’t unusual during the traditional off-season in Q1, according to DRAMeXchange, a division of TrendForce. However, SSD suppliers are cutting prices in Q1 to help drive adoption of 64/72-layer 3D SSDs in notebook computers.
PC OEMs cut their original purchasing plans in the second half of 2017 due to rising SSD prices, which lowered the adoption rate of SSDs in notebooks to 45 percent, according to Alan Chen, research director at DRAMeXchange.
As SSD prices fall in the first half of 2018, Chen expects the adoption rate to increase to more than 50 percent. At the same time, the PC market will move toward 256-GB products. Chen said 512-GB products will not become mainstream until 2019 or 2020 when prices “reach the sweet spot.”
In Q1 2018, the average contract prices of mainstream client SSDs for PC OEMs are forecast to fall by 3 percent to 5 percent for SATA SSDs and by 4 percent to 6 percent for PCIe SSDs, compared with the previous quarter.
Chen said this marks the end of continuous price hikes for SSDs over the past year.
“Prices for SATA SSDs and PCIe SSDs rebounded since 2016 and peaked in 2017 due to tight supply,” said Chen. “Over the past year, the prices have increased by over 20 percent. As for Q1 2018, both 3D TLC-based SATA and 3D TLC-based PCIe SSDs will see a price drop.”
At the same time, SSD suppliers have continued to add production capacity. “SSD suppliers have added NAND flash capacity since 2017, meanwhile, they are also in the transition to 64-layer products to meet the demand,” said Chen.
SSD suppliers will continue to expand their production capacity of 64/72-layer 3D SSD products in Q2 but demand remains weak, resulting in a slight oversupply, according to Chen.
As a result, contract prices will continue to fall for mainstream client SSDs in the second quarter (Q2) of 2018, said Chen. But by how much prices will drop is undetermined at this time.
Higher PCIe SSD Adoption
Although PCIe SSDs offer higher performance than SATA III SSDs, they’ve had a lower than expected adoption rate of 30 percent in 2017 due to their higher prices, said Chen.
But that’s about to change in 2018. The adoption rate of PCIe SSDs is expected to reach 50 percent this year for several reasons. “This is because Intel CPU platforms have provided wider support to PCIe SSD; maturing 3D SSD technology has lowered the costs; and SSD controller chip makers have launched more cost-effective solutions,” said Chen.
“Furthermore, suppliers including SK Hynix, WD/Toshiba, Micron, and Intel have all put 64/72-layer SSD products into mass production since Q1 2018, so the penetration rate of 3D TLC architecture in the client SSD market has a chance to reach 70 percent in 2018,” he added.
Other trends include shipments of Intel’s 3D Xpoint SSDs and the development of 3D QLC Flash technology, which is expected to deliver higher capacity at a more competitive cost. Mass production of 3D QLC is expected in the second half of 2018 at the earliest, said Chen.
Intel started to ship 3D Xpoint SSD products to the PC OEM market in 2017 and also launched new 280/480 GB products in the channel, said Chen. However due to the “low performance-cost ratio,” these SSDs are only being adopted in high-end business and gaming PC markets,” he concluded.