© luchschen dreamstime.com Analysis | July 25, 2014
SSD Controller IC industry restructure benefits Marvell
On May 29, 2014, Seagate Technology (Seagate) announced it acquired LSI’s Accelerated Solution Division (ASD) and FCD (Flash Components Division) assets from Avago Technology (Avago) for US $450 million.
Originally, FCD was responsible for LSI’s SSD controller R&D division, and formerly a SandForce research team. The division’s main clients include suppliers in enterprise SSD, PC OEM SSD and retail SSD. “Despite major restructuring in the SSD controller industry, US chip manufacturer Marvell will keep top position in the short to medium terms, whereas Taiwanese SSD controller manufacturers will show increased momentum,” said Alan Chen, Senior Manager, DRAMeXchange. He forecasted impact from the industry restructure as following: 1. Enterprise SSD market: In-house Controller IC solution adoption becomes trend Enterprise SSD market demand has been on the rise over recent years due to growth in mobile devices and cloud computing. Because Enterprise SSD customers have very high requirements for storage device performance, data encryption and preservation, as well as customized specifications, manufacturers are merging or making purchases of other companies to increase their competitiveness in addition to strengthening controller chip and Firmware capabilities. Seagate’s purchase of Avago’s ASD and FCD departments is to strengthen its server storage product competitiveness, and therefore is likely to put less emphasis on the PC OEM and Retail SSD markets in the future. The largest SSD Enterprise manufacturers as of now are Intel and Samsung, which mainly use in-house control chip solutions to meet high customization demand from clients. Thus, Chen believes that in the future Enterprise SSD providers will mainly use in-house controller chips and that Seagate’s Avago purchase will have limited impact on the Enterprise SSD controller chip market. 2. The PC OEM SSD Market: Marvell to Maintain Strong Leading Position At present the main providers of PC OEM SSD products are Samsung, Sandisk, Intel, Toshiba, Liteon IT, Micron and SK Hynix, which hold over a 90% market share. In terms of controller chip solution strategies, Samsung completely uses in-house chips while Sandisk, Intel, Toshiba, and SK Hynix outsource orders in combination with in-house made products. Micron and Liteon IT outsource all of their chip orders. LSI and Marvell hold over a 90% share for receiving outsourced orders, hence following Seagate’s purchase of FCD, manufacturers began cooperating with Marvell in order to avoid purchasing controller chips from Seagate as well as lower operation risk. Marvell is also the only manufacturer that has PCle controller chip mass-production experience. With Apple already using PCIe in its notebook applications, other vendors are expected to begin upgrading their SSD interface specifications from SATA III to PCle. Therefore, Marvell is expected to maintain a strong leading position in the market in the short to medium terms, according to Chen. 3. Retail SSD Market: Taiwan Makers to Play a Major Role Retail SSD is also another market for Avago FCD, which currently holds over an 80% share, and module customers are heavily seeking out the company’s controller chip solutions. The share is expected to be further divided among Jmicron, Phison and SMI, whose SATA III controllers, according to Chen, are already good enough to compete against Avago FCD’s products in the retail SSD market. Many of the industry's module suppliers have already been known to use the Taiwanese manufacturers’ cost effective solutions before the acquisition of Avago’s ASD and FCD departments took place. With the number of module clients anticipated to surge as a result of Seagate’s acquisitions, the Taiwanese makers have a good chance of seeing further shipment growth in the future.